If Convicted, Madoff Faces Life in Prison

Life in prison.

That is the bleak prospect facing accused mega-Wall Street scammer Bernard Madoff, according to federal sentencing guidelines, if he is convicted of even a single charge of securities fraud in what is alleged to be the biggest Ponzi scheme in history.

With losses that may be running as high as $50 billion at Madoff's Manhattan-based securities business, the computation of his possible prison term in the event of a fraud conviction goes off the chart used by federal judges to compute sentences.

If convicted, the only thing that could save Madoff, 70, from dying behind bars is if he were to cooperate with federal prosecutors and recover substantial sums of investor funds, legal experts said.

"Given the amount of the alleged loss, the nature and extent of his cooperation will be the key to his effort to reduce the sentence," said former Manhattan federal prosecutor Carl Loewenson.

Madoff's cooperation will have to be substantial, amounting to not only aiding recovery of investor money but also helping prosecutors make cases against others, Loewenson added.

Defense attorney Ira Sorkin of Manhattan declined to comment yesterday, but in the past he has called the case a tragedy and said Madoff was cooperating with authorities.

Since 1986, federal courts have used the sentencing guidelines, which assign points for various aspects of a crime. Judges total the points and consult a special table to decide how much prison time is warranted. Totals exceeding 43 points result in life in prison.

The guidelines were largely mandatory until the U.S. Supreme Court ruled them advisory in 2005, though judges still routinely consult them.

In Madoff's case, any conviction for fraud that caused a total loss above $400 million would saddle him with a whopping 30 points. That amount would be on top of 6 points generally assigned to the crime of fraud. Other factors, such as Madoff's role as an investment adviser, could bring the total up to 50.

Christopher Bebel of Houston, another former federal prosecutor, agreed Madoff could avoid life if he helps prosecutors. But even then, Bebel said, prosecutors would likely ask for a minimum term of 10 years, which for a man of Madoff's age is effectively a life sentence.

Madoff was one of Wall Street's most respected investors when he was arrested Dec. 11, after he allegedly told his sons his investment empire amounted to a scam and was nothing more than a large "Ponzi" scheme that may have victimized hundreds of wealthy investors.

After being arrested on the basis of a federal criminal complaint alleging securities fraud, Madoff was released under house arrest on a $10-million bond. The Securities and Exchange Commission also filed a civil action, and today Madoff must give the agency a list of his personal and business assets.

Madoff has not entered a plea in the case. Federal prosecutors have until Jan. 12 to either indict him or hold a preliminary hearing.

Computing possible sentence

If accused Ponzi schemer Bernard Madoff were to be convicted of the single count of securities fraud affecting scores of victims, this is how his potential prison term would amount to a life sentence under federal sentencing guidelines. Offense levels totaling 43 or greater call for life.

Factor Offense level

Basic securities fraud 6 points

Loss greater than $400 million 30

Defendant was investment adviser

or broker-dealer 4

250 or more victims 6

Crime affected solvency or security

of 100 victims 4

Total 50

SOURCE: U.S. SENTENCING GUIDELINES, 2008 EDITION