In pleading guilty to criminal charges, Peter Madoff portrayed himself as a victim of a domineering older brother who he revered right up until an evening in December 2008 when his sibling revealed that his wildly successful investment business was a sham that lost its customers their nearly $20 billion investment.
"I was in total shock," Madoff said Friday as he described the confession by his older brother, Bernard. "My world was destroyed. I lost everything I worked for."
The 66-year-old Madoff, saying he was "deeply ashamed and terribly sorry," spoke angrily about his 74-year-old brother, who is serving a 150-year prison term after admitting his creation of the largest known Ponzi scheme.
"My family was torn apart as a result of my brother's atrocious conduct," he said. "I was reviled by strangers as well as friends who assumed that I knew about the Ponzi scheme."
He said his brother had made it clear that he would never become a partner in the business where he had worked since 1966, even as he was showered with tens of millions of dollars in salary, bonuses and other financial gifts. He made him the investment business's chief compliance officer.
Peter Madoff said he was so confident about his brother's smarts and success that he persuaded his wife, daughter, granddaughter and sister to invest millions of dollars that they eventually lost in the fraud.
AP
Peter Madoff leaves Federal Court on Friday, June 29, 2012 in New York after pleading guilty to criminal charges. Peter Madoff, the younger brother and business partner of disgraced financier Bernard Madoff pleaded guilty Friday to charges he doctored documents, but insisted he knew nothing about his brother's historic Ponzi scheme. Madoff, 66, entered the plea in a deal that permits him to remain free on $5 million bail pending his Oct. 4 sentencing. (AP Photo/John Minchillo)
Close He agreed to serve 10 years in prison and surrender all his assets as he pleaded guilty to conspiracy and falsifying records. He will remain free on $5 million bail until his Oct. 4 sentencing. Federal prosecutors said the investigation was ongoing.
Prosecutors portrayed the younger Madoff as a criminally incompetent chief compliance officer who filed fabricated compliance reports for more than a decade and purposefully deceived the Securities and Exchange Commission.
"He even signed many weeks of compliance reports in one sitting, intentionally changing pens and ink colors to disguise the fact that he had done them at once," Assistant U.S. Attorney Lisa A. Baroni told U.S. District Judge Laura Taylor Swain.
Madoff became choked up near the end of his statement after he described deciding with his brother which favored friends, clients and family members should receive the $300 million that remained in the investment company's accounts. The checks never went out.
Only weeks before, the clients had been told their investment had grown to more than $65 billion.
The plea was consistent with Bernard Madoff's own claims that his brother and two sons were in the dark about his misdeeds.
FBI Assistant Director Janice K. Fedarcyk said Peter Madoff played an "essential enabling role" in the scam by certifying fabricated investment results.
"Peter Madoff enabled the largest fraud in human history. He will now be jailed well into old age, and he will forfeit virtually every penny he has," U.S. Attorney Preet Bharara said. "We are not yet finished calling to account everyone responsible for the epic fraud of Bernard Madoff and the epic pain of his many victims."
Peter Madoff was credited with creating a computer trading system for the firm in the late 1970s and early 1980s that was considered groundbreaking at the time.
"I loved my job," he said.
A complaint filed in bankruptcy court alleged that the Madoff investment business had transferred more than $77 million to Peter Madoff.
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