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In a courtroom surprise, it was revealed Tuesday
that Bernard Madoff will plead guilty Thursday to securities fraud,
perjury and other crimes, knowing that he could face up to 150
years in prison for one of the largest frauds in history.


      The revelation came as prosecutors unveiled an 11-count charging
document against the 70-year-old former Nasdaq chairman, and as his
lawyer, Ira Sorkin, told a judge that Madoff planned to plead
guilty this week without a plea deal.


      Madoff has been under house arrest in his $7 million Manhattan
penthouse since he was arrested in early December after authorities
said he confessed to his family that he had carried out a $50
billion fraud. In court documents filed Tuesday, prosecutors raised
the size of the fraud to $64.8 billion, an amount recounted in
apparently false statements from November 2008.


      Authorities reviewing the finances of Madoff's business say the
actual loss was more likely much less and that higher numbers
reflect false profits he promised investors. So far, authorities
have located about $1 billion for jilted investors.


      Sorkin, prosecutors and U.S. District Judge Denny Chin presaged
the drama likely to unfold Thursday as Madoff, wearing a gray
suitcoat over a black tie, sat quietly beside his lawyers.


      Madoff, who wears a bulletproof vest, arrived at court more than
three hours before the hearing as authorities tried to diminish the
chance he would face a confrontation with investors. Several
lawyers for investors showed up as spectators, but the courtroom
was largely packed with members of the media.


      Asked by the judge if Madoff would plead guilty Thursday, Sorkin
said: "I think that's a fair expectation." Chin asked Sorkin if
Madoff would plead guilty to all 11 counts.


      "Yes your honor," Sorkin answered.


      Assistant U.S. Attorney Marc Litt said there was no plea deal
and that Madoff could be exposed to the maximum penalty under
sentencing guidelines: 150 years.


      Chin said he would not sentence Madoff on Thursday, and he would
limit investors who want to speak at the hearing to those
challenging whether the plea should be accepted or whether Madoff
should be allowed to remain on bail pending sentencing.


      "There is no plea bargain here. Those victims who objected to a
plea bargain no longer have a reason to object," Chin said.


      At least 25 Madoff investors have asked to speak Thursday under
provisions allowing victims of crime to appear at a plea hearing.


      Attorney Jerry Reisman, who represents more than a dozen Madoff
investors, predicted that the plea hearing would be "a zoo."


      "I will tell you my clients are outraged by his being able to
escape with a guilty plea," he said.


      But Chin told prosecutors to limit the number of victims who
will speak in court and make sure they conduct themselves in a
"respectful and dignified manner."


      U.S. Attorney Lev L. Dassin said in a release that the charges
"reflect an extraordinary array of crimes committed by Bernard
Madoff for over 20 years. While the alleged crimes are not novel,
the size and scope of Mr. Madoff's fraud are unprecedented."


      He said Madoff faces 150 years in prison, mandatory restitution
to victims, forfeiture of ill-gotten gains and criminal fines.


      He also noted that the government has not entered into any
agreement with Madoff about his plea or sentencing and that the
filing of the charges do not end the matter.


      "Our investigation is continuing," Dassin said.


      In court documents, prosecutors revealed some details of how the
fraud was carried out, saying Madoff hired numerous employees to
serve as a "back office" for his investment advisory business.


      The government said many of the employees hired to perform those
functions had little or no prior training or experience in the
securities industry.


      Prosecutors said Madoff caused those employees to, among other
things, "communicate with clients and generate false and
fraudulent documents including, but not limited to, monthly client
account statements and trade confirmations that purportedly
reflected the purchases and sales of securities that Madoff claimed
had been conducted on behalf of (his) clients."


      Prosecutors say Madoff operated a massive Ponzi scheme in which
his clients' funds were misappropriated and converted to the use of
Madoff, his business and others.


      Chin said he will not sentence Madoff for several months after
Thursday's proceedings.


      Sorkin complained that federal authorities have not let lawyers
for Madoff study the financial records of his company so he can
show that some individuals or financial funds actually received
more in payouts over the years than they are claiming they lost.


      Chin said he understood that Madoff was not agreeing to the
extent of the losses.


      The revelations about Thursday's plea came at a hearing that was
supposed to center on Madoff's agreement to waive any potential
conflicts of interest involving Sorkin.


      Madoff, speaking softly, acknowledged that Sorkin might be
conflicted in his loyalties if his case ever went to trial because
Sorkin's family had invested more than $900,000 with Madoff and
because Sorkin once represented two accountants linked to Madoff in
a securities action.


      Madoff was charged with securities, investment adviser, mail and
wire frauds along with money laundering, making false statements,
perjury, making a false filing with the Securities and Exchange
Commission, theft from an Employee Benefit Plan and two counts of
international money laundering.


      In its court papers, prosecutors reserved the right to pursue up
to $170 billion in criminal forfeiture. However, the amount bares
little relation to how much Madoff is believed to have stolen or
lost. Instead, it represents the total amount of money that could
be connected to the fraud.

Gallery

Crime, Law and Justice

Courts

In a courtroom surprise, it was revealed Tuesday
that Bernard Madoff will plead guilty Thursday to securities fraud,
perjury and other crimes, knowing that he could face up to 150
years in prison for one of the largest frauds in history.


Bernard L. Madoff leaves  U.S. Federal Court

TIMOTHY A. CLARY/AFP/Getty Images

Bernard L. Madoff leaves U.S. Federal Court

Madoff's lawyer says client will plead guilty

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