Madoff’s plea deal is his last grand scam

Entering into a plea deal with Bernard Madoff is a horrible decision and a cop-out for prosecutors.

The reported plea deal is nothing more than his last grand scam designed to protect his wife’s ill-gotten assets and his kids.

Entering into a plea deal with Mr. Madoff is a grave mistake for five reasons:

• A deal sends the wrong message to other criminals. There is a reason prosecutors didn’t enter into plea deals with Houston-based Enron Corp. executives Kenneth Lay and Jeffrey Skilling or Clinton, Miss.-based WorldCom Inc.’s former chief executive, Bernard J. Ebbers. A public trial in New York with the corresponding worldwide attention would do more to prevent future Madoffs than anything that the Securities and Exchange Commission or the Financial Industry Regulatory Authority Inc. of New York and Washington could ever do. It is called a “public execution,” and it is highly effective from a deterrent prospective.

• The light cast by a criminal trial and the investigation that goes into it would go a long way toward en-suring that all the other participants in this fraud face the criminal charges they deserve. This scam was too massive for it to be solely or-chestrated by Mr. Madoff. Of course, he is hoping to get credit at sentencing for cooperating and thereby lessening his sentence. But the real reason for his cooperation is to try to ensure that his wife and kids don’t get indicted as well. Clearly, Mr. Madoff is telling prosecutors, and will continue to tell them post-plea deal as part of his “cooperation,” that his wife and kids had nothing to do with the fraud. Nothing would go further in refuting this than a trial with all witnesses testifying under oath. Additionally, in order for a plea deal to be meaningful in terms of discovering who else might be criminally liable, the one who is pleading guilty must be honest and forthright with prosecutors in detailing the roles of others. Mr. Madoff’s actions after his admission — such as sending millions of dollars’ worth of jewelry to family members — make it clear that he can’t be trusted in exposing who else should be criminally indicted, as he wants to protect those closest to him.

• If he enters into a plea, he in-creases his odds of getting a relative slap on the wrist as he places his fate into the hands of the judge, who has made favorable rulings. For example, the judge allowed Mr. Madoff to remain free on bail living in his $7 million mansion rather than incarcerated pending trial as he should have been.

• It seems clear from media reports that victims want a pound of flesh from Mr. Madoff that can be provided only via a criminal trial. Although not required, prosecutors usually do take into consideration the feelings and wishes of the victims. In this case, it appears clear that prosecutors aren’t doing this.

• Plea deals make a great deal of sense when there is an issue as to whether you can prove the underlying charges. This isn’t a concern in the Madoff scam. He has admitted to the scam and the level of brazenness such as no trades for any clients in at least the past 14 years make this case a prosecutorial slam-dunk. Plus, given the size of the scam, it is almost certain that should Mr. Madoff be found guilty at trial, sentencing guidelines would call for the long end of the sentence regardless of whether the fraud is $15 billion or $50 billion.

Andrew Stoltmann

Plaintiff’s attorney

Stoltmann Law Offices PC

Chicago