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Madoff investors await his plea

For some alleged victims, an expected admission of guilt offers little satisfaction.

March 12, 2009|Walter Hamilton and Martin Zimmerman

NEW YORK AND LOS ANGELES — Today is the day that people who entrusted their money to Bernard L. Madoff have anxiously awaited.

Since the financier allegedly admitted in December to running one of the largest investment frauds in history, victims have clamored for him to be carted off to prison.

With Madoff expected to plead guilty today, a federal judge will decide whether the defendant will be led away in handcuffs or allowed to remain at his multimillion-dollar Manhattan apartment pending sentencing later this year.

Madoff's investors will be watching closely.

Dozens of alleged victims from the New York area are expected to converge at the Manhattan courthouse to lobby the judge. In California, Eva Soltes, a filmmaker in Joshua Tree who said she lost her life savings to Madoff, will be checking the Internet to see what happened.

"I think he should have been in jail to begin with," she said. "The idea of him living in a $10-million penthouse that should belong to the victims is appalling."

In a sign of how deep a chord the Madoff furor has struck, even people who never invested with Madoff say they want him jailed.

"He personifies the bad guy in the American financial world," said Jess Kalinowsky, a West Hollywood travel agent who was not a Madoff investor. "Average Joe Blow Americans do their jobs and then some guy at the head of the helm is screwing over the public and the little guy gets screwed."

Indeed, Madoff has become for many the public face of all that's gone wrong with the U.S. financial system.

Just as Charles Keating symbolized the savings-and-loan crisis and Ivan Boesky epitomized insider-trading scandals of the 1980s, Madoff has become a target of generalized anger at the collapse of the stock market and mounting job losses in an uncertain economy.

Madoff didn't cause the financial and economic crises. And despite the size of his alleged Ponzi scheme, he snagged only a relatively tiny slice of the country's investors. But he has garnered far more notoriety than other possible villains such as investment bank chiefs.

"He has become the poster child for the financial scandal of this era, just the way Boesky and others were," New York defense lawyer Brad Simon said.

Madoff's attorney said Tuesday that his client would plead guilty to 11 felony charges. Although he is certain to get much less than the maximum 150 years in prison, the sentence is likely to amount to a life term for the 70-year-old Madoff.

White-collar felons normally remain free until they are sentenced, and often for several weeks afterward until the date they must report to prison. But some experts think U.S. District Judge Denny Chin will order immediate detention.

Some investors say they'll find little relief in a guilty plea because they view it as a bid by Madoff to help his family.

"What he's doing is trying to protect his kids and his wife and maybe his brother," said Paul Allen of Thousand Oaks. "He figures he's 70 years old and if he has to spend the rest of his life in prison, his wife and kids won't have to suffer."

Allen, an 89-year-old retired garment industry executive, and his 86-year-old wife are struggling to make the monthly payment at the assisted living center where they live. Seeing Madoff behind bars won't make that payment any easier to come up with, he said.

Some people say they've simply resigned themselves to the situation.

"We all knew that he was going to go to jail for the rest of his life," said Bob Chew, 56, a Colorado marketing consultant who spends much of his time in Los Angeles. "There are people who want to kill him, but most of the people I talk to don't. They just want to get on with their lives. It's almost surreal."

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walter.hamilton@latimes.com

martin.zimmerman@latimes.com

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