Madoff 'to plead guilty' on $50bn fraud

Published on Wednesday 11 March 2009 20:50

BERNARD Madoff, the American financier accused of an "unprecedented" $50 billion (£36 billion) swindle, is expected to plead guilty today to 11 charges that could put him in prison for the rest of his life.

A lawyer for the 70-year-old former Nasdaq chairman has told a New York judge that he intends to plead guilty to all 11 counts, including securities fraud and perjury.

Madoff is accused of running a gigantic pyramid scheme, defrauding billions from pensioners, charities, school trusts and even Holocaust survivors. He has remained tight-lipped in his preliminary court hearings, and has refused to talk to the media.

Court documents say Madoff's fraud began in the 1980s, running alongside his legitimate investment businesses.

Prosecutors allege that Madoff ran a classic "Ponzi" sales scheme – the high returns offered to investors were paid for out of the cash coming in from new investors. By weaving a web of bank accounts that zig-zagged the world, Madoff was able to produce false returns showing his scheme was apparently solvent.

Madoff used his high-profile social position to attract new clients he met at country clubs and charity dinners. At its peak, the total amount of money his clients were told they had was $64 billion, but prosecutors say the true amount of money in the fund will be a fraction of that.