…Meanwhile, back in the Bernard Madoff (hereinafter, the “Defendant”) drama, Magistrate Judge Ronald L. Ellis awaits written argument from the Defendant’s criminal lawyer as to why his client should not be incarcerated while awaiting trial for his artful recreation of the Boston – originated “Ponzi Scheme”.
The issues involved are an interesting combination of typical bail-related considerations as well as a novel twist to the “danger to the community” approach.
First of all, for those of you just waking up from about a month-long nap, the Defendant was arrested on December 11th on a securities fraud charge after the FBI said he confessed to swindling investors. Authorities say he told his sons he ran a $50 billion Ponzi scheme and had only a few hundred million dollars left.
The results of the fraud have been felt around the globe and across all strata of society.
He has been under house arrest at his multimillion-dollar Manhattan penthouse with an electronic bracelet and 24-hour guard.
But that status may be about to change.
On Monday, prosecutors asked the court for the Defendant’s immediate incarceration, saying he and his wife violated a court order by sending jewelry and antique watches worth more than $1 million to relatives and friends over the holidays. They argued that the action violated a freeze of the Defendant’s assets and demonstrated a danger to investors that he might dissipate assets. In effect, that by dissipating assets, he was continuing his thefts from his victims.
The judge asked lawyers on both sides during a bail hearing Monday to submit arguments this week to help him decide whether the Defendant should be jailed before trial.
The judge asked lawyers on both sides to research whether Congress had established over the years whether economic harm can represent a danger to the community. He said he wanted to know if there was a recent law that would indicate if a person could be considered a threat to a community by his potential to inflict economic harm.
“Let’s put it all out there for me to review,” he said.
Prosecutors delivered their answer in the form of a letter to the court on Tuesday, but the letter was not immediately made publicly available. The defense lawyer is to file written arguments to the court today.
On Monday, the Defendant’s lawyer argued in court that the expensive jewelry and watches that the Defendant is being blamed for sending out to relatives, thereby liquidating assets, were actually sent by the Defendant’s wife, who was not subject to a court order.
Counsel further argued that other heirlooms, including $25 cufflinks and a $200 pair of mittens, were also sent through the post office to his brother, a son and daughter-in-law and a New York couple vacationing in Florida. He said his client’s family sought the immediate return of the items when they were told they shouldn’t have sent them.
“If he was found to be selling narcotics, if it’s found that he threatened somebody, if it’s found that he was fleeing the community, then I think your honor should consider new bail conditions,” the lawyer told the judge Monday. “But that’s not the case here.”
Attorney Jerry Reisman, representing 13 Madoff investors, said he believes the Defendant should be sent to jail. He said his clients are “astounded” and “infuriated” that the Defendant remains out on bail and suspect he’s still taking steps to hide his assets.
Attorney Sam’s Take:
As any loyal reader to this daily blog knows, many things may be considered by the court when deciding upon bail conditions. We have also discussed the so-called “safe streets” arguments which generally lead to a dangerousness hearing in the Commonwealth wherein, if the court is convinced that a defendant poses a threat to the public, he is can be held without bail pending trial.
What the court and prosecution in the Defendant’s case are trying to do is examine whether “safe streets” equals “safe bank accounts”. Generally, even in a capitalist system, they are not the same. A defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt. The idea behind a dangerousness hearing is to weigh that defendant’s presumed innocence against society’s safety. Physical Safety.
For example, if someone is endangering my life, I can assault him. If he is forging my checks, I cannot.
On the other hand, as I have told you, my opinion is that defendants are often assumed guilty in reality, despite what our Constitution says. And so, contradictions flourish.
In the instant case, the Defendant is said to have confessed all. Additionally, according to law enforcement, he has been somewhat cooperative explaining what how the scheme had worked to authorities. However, there are more recent reports that this willingness to cooperate has ebbed. And so, the government is looking to incarcerate him and the judge is looking to potentially create new law equating personal safety with economic security (after all, the Defendant is not on the street emptying out others’ bank accounts…anymore).
It seems to me, though, that this stretch is really unnecessary.
The court has ordered that the Defendant not get rid of any assets. The reasons for that order are obvious. It does not matter if the items are heirlooms, money or a stamp collection. If the Defendant is found to have violated that court order, then he has done two things which can land him in jail awaiting trial without straining the limits of dangerousness.
First of all, he has violated the court order. He can be charged with contempt of court, an additional criminal charge, and he can be locked up for that. Second, by disobeying the court, he has sent a message that he does not believe he is bound by the legal system, and so is more likely to flee when the going gets particularly tough, and so bail is raised.
It may be that this is part of what the prosecution has already argued in their letter to the court. If not, it should be.
The argument that “my wife did it” or “Aww, it’s only a little valuable family heirloom we suddenly figured we would get rid of by sending it to family” are about as helpful as “my dog ate my homework”.
I am assuming that there are not many of you out there in the Defendant’s luxury position. However, should you find yourself in a similar circumstance, i.e. out on bail, it is best to be ultra-careful to not violate those court orders. While you are not in custody, you are considered on a type of probation.
It is easy to violate probation. And doing so means incarceration.
Any intelligent person, such as the Defendant, should know not to experiment with that. If there be doubt, contact your highly experienced criminal defense attorney and ask.
The full article of this story can be found at http://www.businessweek.com/ap/financialnews/D95I1NB01.htm