Tonight on AC360°, Madoff’s confession. Today the former Nasdaq chairman and Wall Street fat cat pleaded guilty to defrauding thousands of investors out of 65 billion dollars. He said he knew what he did was wrong and fully expected this day to come. Tonight he’s in jail, awaiting his June sentencing. He faces up to 150 years. Considering he’s 70 years old, he’ll likely die in prison. But confessing to the massive Ponzi scheme won’t bring his victims’ money back. We’ll be digging deeper into the story tonight. We’d love to hear your thoughts on Bernie Madoff. We want to keep the live blog on this one topic. So, please share your thoughts on Madoff’s guilty plea below.
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Bernard Madoff is in jail tonight. It may be small consolation for the thousands of people he defrauded, but it is something. The tiny cell he’s confined to is a far cry from his $7 million penthouse on Manhattan’s Upper East Side.
Madoff pleaded guilty today in front of a packed courtroom in New York. He also recounted details of his massive Ponzi scheme, including how and when it started. Madoff told the court he knew what he did was wrong, saying: "I realized that my arrest and this day would inevitably come."
The 70-year-old former Nasdaq chairman will be sentenced in June and could face up to 150 years in prison. So far, authorities have located only about $1 billion for Madoff’s investors, some of whom lost their life savings
Three of Madoff’s victims were allowed to speak today in court; Madoff did not look at any of them.
After the hearing was over, Burt Ross, a lawyer from Englewood, N.J., who lost $5 million in Madoff's swindle, told the Associated Press: "It's a little bit like seeing the devil."
Tonight on 360 we’ll have several reports on the Madoff story, including all the details inside the courtroom.
Also tonight, a truly chilling 360 Dispatch. Ed Lavendera reports on American teenagers working as hit men for Mexican drug cartels. Some are as young as 13 when they do their first hit. The cartels recruit these teens just across the U.S. border with Mexico, where cantinas and clubs are a draw for young Americans. In Ed’s report, you’ll meet two teens now serving long prison terms. Prosecutors say worked they for the Zetas, a group of former Mexican special military forces that do the dirty work for the notorious Gulf Cartel. One of the teens told investigators the Zetas are moving their operations deeper into the U.S.
Join us at 10 p.m. eastern for these reports and more.
CNN Senior Executive Producer
It was a little lie that was supposed to die young. That is Bernard Madoff’s version of how his investment company became the largest Ponzi scheme ever. “When I began the Ponzi scheme” Madoff told a U.S. District Court Judge in Manhattan this morning, “I believed it would end shortly and I would be able to extricate myself and my clients from the scheme. However, this proved difficult, and ultimately impossible, and as the years went by I realized that my arrest and this day would inevitably come.”
If you believe Madoff’s account in court today (and, remember, it was only five pages long, so it’s a tiny slice of the story) he developed his scheme because he felt pressure to satisfy investors who had already committed their money to him. Large investors with high expectations. It began, “to the best of my recollection,” in the early 1990s. I felt compelled to satisfy my clients’ expectations, at any cost.” And so, he lied. “I therefore claimed that I employed an investment strategy I had developed, called a ‘split strike conversion strategy,’ to falsely give the appearance to clients that I had achieved the results I believed they expected.”
SPLIT STRIKE CONVERSION STRATEGY
“Split strike conversion strategy” may sound like it’s from the imagination of a Major League Baseball coach or a minor league con artist. But it’s a real investment strategy used by legitimate money managers. It combines putting money into large big name stocks, and hedging those investments by also betting against some of those very same stocks. There’s more to it than that, of course. What struck many professional investors as unlikely was not that such a strategy could produce profits, but that it was consistently earning Madoff such stunning profits - 15 percent returns year after year he had claimed.
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U.S. first lady Michelle Obama greets U.S. Secretary of State Hillary Clinton at an awards ceremony to announce this year's recipients of the Secretary of State's Award for International Women of Courage at the State Department March 11, 2009 in Washington, DC.
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
v. 09 CR 213 (DC)
BERNARD L. MADOFF
HON. DENNY CHIN,
LEV L. DASSIN
United States Attorney for the
Southern District of New York
MARC O. LITT
Assistant United States Attorneys
DICKSTEIN SHAPIRO LLP
Attorneys for Defendant
BY: IRA LEE SORKIN
DANIEL J. HORWITZ
NICOLE P. DE BELLO
MAURO M. WOLFE
ALSO PRESENT: STEVEN GARFINKEL, FBI
KEITH KELLY, FBI
JULIA SCHULTE HANISH, USDOJ, FBI
THEODORE V. CACIOPPI, FBI
MR. LITT: Marc Litt for the United States. With meat counsel table are Lisa Baroni, an Assistant U.S. Attorney,
and four FBI agents: Steven Garfinkel, Keith Kelly, Julia
Hanish, and Ted Cacioppi. Good morning, your Honor.
MR. SORKIN: Good morning, your Honor. On behalf of
the defendant Bernard L. Madoff, the law firm of Dickstein
Shapiro LLP. Mr. Madoff is sitting to my left. To my right is
Daniel Horwitz of my firm. To Mr. Madoff's left is Mauro Wolfe
from my firm, and to Mr. Wolfe's left is Nicole De Bello from
my firm. Good morning.
THE COURT: Good morning.
Mr. Sorkin, your client is still prepared to plead
guilty today as we discussed on Tuesday?
MR. SORKIN: Yes, your Honor.
THE COURT: Mr. Madoff, if you would stand, please,
and the deputy clerk will administer the oath.
MR. SORKIN: Your Honor, before you begin the
allocution, we have provided the government and the court
reporter with a copy of the allocution that Mr. Madoff will
read, and we have a copy if the Court wishes to see it as well.
THE COURT: Yes. Thank you.
MR. SORKIN: May I hand it up?
THE COURT: Yes.This statement is intended to cover all 11 counts?
MR. SORKIN: Yes, your Honor. After your Honor goes
through, he will give a statement which we believe will cover
all the elements. Thank you.
THE COURT: Mr. Madoff, do you understand that you are
now under oath and that if you answer my questions falsely,
your untrue answers may later be used against you in another
prosecution for perjury or making false statements?
THE DEFENDANT: Yes, I do.
THE COURT: Try to keep your voice up so that I can hear you, please.
THE DEFENDANT: Yes, I do, your Honor.
MR. SORKIN: Can we get some water, your Honor?
THE COURT: Yes.
MR. LITT: I would note that the defendant has not yet been arraigned on the information.
THE COURT: All right. That's true. Technically, we did the first part of it. We never did the final part. Let me just ask the final question.
Mr. Madoff, the other day you waived indictment and you consented to being charged by an information of the government, correct?
THE DEFENDANT: Yes.
THE COURT: And how do you now plead to the information, guilty or not guilty?
THE DEFENDANT: Guilty.
Gabriel Cardona and Rosalio Reta should have been enrolled in classes at their Laredo, Texas high school - but these two teenagers were living a very different life from going to gym, math or history classes.
These two American high school dropouts were contract killers — on the payroll of drug cartels in Mexico. Investigators say they were paid $500 a week, just to sit around and wait for orders from Mexico to kill. Depending on the target they could bring in anywhere between $10,000 and $50,000. They would drive around in a $70,000 Mercedes Benz, flash cash, guns and live with little fear of any consequences for their actions.
CNN Chief Business Correspondent
Dow is up 8.2 percent. In three days. Pretty big deal. The Dow is actually positive for the month of march right now. And the Dow closed 3.46 percent higher than yesterday's close.
Look who's back! Spendy's back.
February Retail sales numbers were DOWN 0.1%, BUT if you exclude auto sales, which continue to be terrible, the number is actually UP 0.7%. This makes it the second month in a row that Americans are spending more.
Let me break this down a bit.
*Gasoline sales UP 3.4%
*Clothing/Accessories UP 2.8%
*Electronics/Appliances UP 1.2%
*Health/Personal Care UP 0.6%
*Autos DOWN 4.3%
This is now TWO months of increases. Not a trend, yet. But a little hope. Slightly. Very. Little.
Today we also got some bad news on first time claims for jobless benefits, with more than 5 Million people now continuing to claim unemployment insurance.
Hopefully you’ve noticed (and are enjoying!) some recent changes at AC360.com… Our staff is joining Anderson and Erica on the Live Blog each night. Our Facebook page is better than ever – make sure to become a fan! And there are more changes in the works!
In a few hours I’m heading to Austin, TX for the South by Southwest Interactive conference. It’s the biggest and best (that’s the only way Texas does anything, right?) internet/media/blog conference around. Everyone will be there to talk about the best of the web now and where everything is heading. Google, Facebook, all the big Internet names and all the small names that will be huge this time next year. One name in particular I’m looking forward to: Nate Silver, creator of FiveThirtyEight.com.
I’ll be blogging in between panels, talks, and the evening “networking events.” More frequently I’ll be Twittering, so follow me! KellyDanielCNN. Twitter launched at SXSWi two years ago, so it only seems fitting that I finally start updating my dormant Twitter page.
So, before I hit the road at 4:45AM Friday (not a time I can say I’m particularly fond of, unless if it’s accompanied by pancakes, eggs, and good friends after a long night), what would you like to see on AC360.com? What should I be on the lookout for at SXSWi?
The Pew Research Center
For the public, the continuing financial crisis has been overtaken by a jobs crisis. The proportion of Americans citing jobs or unemployment as the nation’s most important economic problem has more than quadrupled – from 10% to 42% – since early October and job worries now far surpass concerns over the financial crisis.
People’s perceptions of the availability of jobs in their areas have worsened as the unemployment rate has increased. Fully 80% say that jobs are difficult to find in their local communities – up seven points since December and 16 points since early October. Overall views of the national economy, already quite negative at the end of last year, have declined further; 30% say the country is in a depression, up from 20% as recently as December.
As has been the case since the financial crisis began, a sizable minority of Americans (40%) say they expect economic conditions to be better a year from now. But the proportion expressing that optimistic view has declined by six points since early October, while the percentage saying they expect things to be worse or the same a year from now has increased from 46% to 56%.
The latest national survey by the Pew Research Center for the People & the Press, conducted Feb. 4-8 among 1,303 adults reached on cell phones and landlines, finds that an increasing proportion of workers expect to face some form of job or benefit cutbacks in the year ahead. More than three-quarters (77%) of working adults say it is not likely they will actually be laid off in the next year, but 21% say a layoff is very or somewhat likely, up from 15% in January 2008. The percentage saying it is at least somewhat likely they may be asked to take pay cut has nearly doubled since the beginning of last year – from 13% to 25%.