Battle just beginning for Madoff victims
Disgraced Wall Street financier Bernard Madoff arriving at a U.S. Federal Court in New York
TEXT OF INTERVIEW
STEVE CHIOTAKIS: The admitted mastermind of the biggest Ponzi scheme in history, Bernard Madoff, heads to court today in Manhattan for sentencing. Prosecutors want to give him 150 years. The defense is calling for 12. Marketplace's Sam Eaton is live with us here in the studio. Good morning Sam.
SAM EATON: Morning Steve.
CHIOTAKIS: So what are we likely to see at today's hearing?
EATON: Well Steve it should be a dramatic event on both sides. You have to remember that this sentence is Madoff's punishment for essentially swindling tens of thousands of investors out of about $65 billion. All to fund a lavish lifestyle for his family. The judge will likely hear from some of those victims today as they call for harsh punishment.
But Madoff also plans to speak out about the shame he felt and the pain he's caused. Madoff's lawyers are urging the judge to set aside all the emotion in the case as he decides the sentence, obviously not an easy thing to do. But it does look like Madoff, who's now 71, will spend most if not all of his remaining years behind bars.
CHIOTAKIS: So is this the end of the case, or is this a sense of closure for the victims?
EATON: Well there may be a small sense of closure for some, Steve, but for most the Madoff investors the battle to get at least some of their money back is just beginning. And it could take months if not years to resolve. The main battle here is that only about a billion dollars of the $65 billion that disappeared has been recovered so far. A government insurance program for failed brokerage firms, but the decision on how to divvy up the rest is already sparking fierce battles between investors.
CHIOTAKIS: So are these investors, Sam, essentially fighting over pennies then? I mean how can the settlements possibly approach the billions that have all but disappeared?
EATON: Well that's the $65 billion question Steve. So far the recovered funds will barely pay the claims that have been approved. And there's a mountain of pending claims behind those. And I should say not included in this group are the tens of thousands of people who invested in Madoff indirectly through so-called feeder funds. They're looking at potentially years before the courts decide their fate.
In the meantime, the court continues to go after Madoff's personal property. That includes several lavish homes, a $2 million yacht and about $80 million that his wife claimed is her own. The bottom line though, Steve, is that there are going to be a lot of disappointed people once all the dust settles.
CHIOTAKIS: All right. Marketplace's Sam Eaton joining us live in the studio. Thanks Sam.
EATON: Thanks Steve.