Neuberger & Partners LLP - Bernie Madoff | Video Transcript

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ANCHOR: And joining me tonight, criminal defense lawyer Joe Neuberger. We're also going to be joined on the phone by U.S. District Attorney Jacob Frenkel in Washington.

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

ANCHOR: And in a few minutes, we'll be joined by Doug Steiner. He's a Globe and Mail Report on Business columnist and a former Madoff client. And welcome to Legal Briefs. And Joe, let me start off with you right away just so we--we'll get this right off the table. The size of this type of scheme, this type of fraud, worst case scenario in Canada, what type of sentence would Mr. Madoff have been looking at here?

JOSEPH NEUBERGER: Something in excess of 15 years. Possibility of life, but in excess of 15 years.

Neuberger & Partners: Fifteen?

JOSEPH NEUBERGER: Fifteen?

Neuberger & Partners: 1-5?

JOSEPH NEUBERGER: Yeah, not 5-0, not 100 years, about 15 to 25 years, yeah.

ANCHOR: Jacob Frenkel, are you there in, in Washington?

JACOB FRENKEL: I am here, yes.

ANCHOR: Welcome to the show.

JACOB FRENKEL: Thank you.

ANCHOR: First of all, as a, as a prosecutor, were you surprised by the size of that sentence?

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

JACOB FRENKEL: Well first of all, as a former prosecutor, because if I, I think if I were still a prosecutor I probably wouldn't be able to speak. And--

ANCHOR: Right.

JACOB FRENKEL: --having been both with at the SEC and Enforcement Division and as a federal prosecutor, I will confess surprise. Yet at the same time on reflection, what, what the judge's real objective here was I think was to set the outer limit. Because for we--now defense lawyers or for career defense lawyers if in the United States the judge had established a sentence more along the lines of what Bernard Madoff's lawyer was trying to obtain--

ANCHOR: Which was 12 years I believe--

JACOB FRENKEL: Which was 12 years, and I remember even some saying well maybe the judge would, would stay within the federal sentencing guidelines and go up to, up to 25. We in the defense bar would readily be arguing at any sentencing.

[GRAPHIC: Bernard Madoff]

JACOB FRENKEL: Well Bernard Madoff only got 25 years, how could you possible consider a sentence of more than 10 years for our client you know given the disproportionate nature of the Madoff crime. I do think what Judge Chin really was trying to do here was set the upper limit and boy did he set the upper limit.

[GRAPHIC: Madoff's wife]

ANCHOR: And, and really maybe symbolic in more ways that one, right?

[GRAPHIC: Madoff and wife]

ANCHOR: I mean basically saying that at 150 years, he's, he's--even, even if he got 50 years, I mean he wasn't--he's not going to live that long. Really something more symbolic. I guess in Canada we call it general deterrence. In the U.S. it's, it's get the message out to that business community that white collar crime to the extent of this is, is going to be hit and hit hard.

JACOB FRENKEL: I think that's a dead on assessment. But I think that there was one other point that the judge was trying to make and that was that, you know, the victims unfortunately have no chance of being made whole.

[GRAPHIC: Bernard Madoff]

[GRAPHIC: Madoff in baseball cap]

[GRAPHIC: Madoff with cigar]

JACOB FRENKEL: Or, you know, many, you know, maybe not even get a fraction back from the work of the, of the receiver given the duration and nature of the fraud.

[GRAPHIC: Courtroom drawing]

JACOB FRENKEL: I think what the judge was trying to say in part, you know to the extent that the United States government has asked for the maximum sentence, I'm giving you that. You know, you, you want some satisfaction that this person, you know this criminal is going to receive 150 years. I'm going to give that to you, the victims, that's one of the few things I the judge can do for you today.

ANCHOR: Right. All right, Joe, let me, let--and let's get back to, to show so people can understand from a comparative basis. On the 27th of June he ordered Madoff to forfeit about $170 billion U.S. That amount is what the prosecutor said flowed through the main account used to operate the scheme. Again, would we ever see a forfeiture order like that here in Canada?

JOSEPH NEUBERGER: We could. We could. I mean there's many mechanisms which are in place now to seize assets, seize assets prior to charges being laid. There's the Civil Remedies Act. There's many sections of the code which can be used, the criminal code here in Canada, to be used to seize assets. We have not seen things as typical as they are in the United States because seizures and forfeitures that go on in the United States are far more in number than they are here in Canada.

ANCHOR: Right.

JOSEPH NEUBERGER: But we have the tools and mechanisms in place to do it, you just don't see it. Many fraud cases starts off civilly where banks are bringing actions to freeze assets and then to go after fraud artists essentially--

ANCHOR: Right.

JOSEPH NEUBERGER: --civilly and then criminal charges come later. But the ones that start by criminal charges don't always start off with the forfeiture or seizures or anything of that nature. But we have the mechanisms.

ANCHOR: All right. So we got here--Jacob, well let me ask you this so people can understand. The issue with respect to the forfeitures, we understand he--U.S. marshals are going to be able to sell Madoff's $7 million U.S. apartment, his primary residence. But the judge left something for his wife didn't he?

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

JACOB FRENKEL: Well he--it may be something, something token because in the civil litigation, you know that $2.5 million is going to be pursued aggressively. And I think, you know, just going back to what Joe was just saying, I think there are a lot of similarities in the tools that, that the government has available in Canada that we have here in the United States, but I think the, the, the, the U.S. reputation, for better or for worse, is that whatever tools are in the government's arsenal are used rather aggressively.

ANCHOR: Yeah, well you got to remember--

JOSEPH NEUBERGER: Absolutely true.

Neuberger & Partners: Jacob, I don't know if you ever follow Canadian sentencing, but a person in Canada convicted of first degree murder is eligible for parole after 25 years. We don't send people to prison for 150 years. For--as you said, for better or for worse.

JOSEPH NEUBERGER: Could I, could I just ask, I'm curious about what the, what an appeal might render. Will a court of appeal reduce that sentence?

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

JACOB FRENKEL: Joe, I think it's an interesting issue because I, I, I, you know, I think early on there was some talk about, you know, the, the 150 years potentially being reduced to 50.

ANCHOR: Right.

JACOB FRENKEL: I do think it's possible that the appeal could--I mean that there could be an appeal and the judge was very careful to articulate his reasons with the hope that this sentence would be sustained on appeal.

ANCHOR: Right.

JACOB FRENKEL: But at the end of the day, the worst that could happen, worst being in terms of an appellate court saying no, this sentence really was excessive, it's going to come back to Judge Chin. Big deal if he drops the one off the front.

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

ANCHOR: Yeah.

JACOB FRENKEL: You're still going to end up with a 50 year sentence.

ANCHOR: That's right. That's right.

JOSEPH NEUBERGER: Yeah.

ANCHOR: Yeah, and that's exactly it. You know what we should do here, Jacob, why don't you tell us quickly because I, I just realized that some people may not understand the ponzi scheme and what it is. What, what essentially was this fraud? Well did he have accomplices? Is this something he did on his own?

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

JACOB FRENKEL: Well I don't think anybody believes that he did this on, on his own or with this one Rockland, Rockland County accountant.

[GRAPHIC: Bernard Madoff]

JACOB FRENKEL: And I do think that the, the, the fact that Bernard Madoff, you know, has now been sentenced in some respects will clear the decks so that people can--will really return their focus to who else is criminally culpable and who else is civilly culpable. Your question is really what is the ponzi scheme?

[GRAPHIC: Madoff's wife]

[GRAPHIC: Madoff and wife]

JACOB FRENKEL: In essence, the act as government alleges is for, for more than 30 years Bernard Madoff was taking money from investor 1, telling investor 1 or 1 through 1,000--

[GRAPHIC: Madoff's wife]

[GRAPHIC: Madoff and wife]

ANCHOR: Right.

JACOB FRENKEL: --that I've invested for you in, you know, big name securities.

[GRAPHIC: Bernard Madoff]

[GRAPHIC: Madoff in baseball cap]

[GRAPHIC: Madoff with cigar]

JACOB FRENKEL: And, and have a wonderful options trading, you know, strategy that is continuing to generate profits even in down markets when in fact investor 1,010 and 1,020 when they put money in, those funds are going to pay--

[GRAPHIC: Courtroom drawing]

ANCHOR: The first one--

JACOB FRENKEL: --investors 1 through 1,000.

ANCHOR: Oh yeah. All right.

JACOB FRENKEL: And there never was investments underlying them.

JOSEPH NEUBERGER: Never investments.

[GRAPHIC: On the phone Jacob Frenkel former U.S. prosecutor]

ANCHOR: All right. We got to--I got to--I'm just going to take a break here gentlemen. We're going to put up the numbers, Legal Brief is always interactive.

[GRAPHIC: Legal Briefs Phone: 416.872.CP24 1.888.863.CP24 Fax: 416.593.6397 E-mail: LegalBriefs@CP24.com]

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