January 14th, 2009
10:11 AM ET

Financial Dispatch: Will Madoff even go to trial?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/CRIME/01/09/madoff.alexandra.penney/art.madoff.gi.jpg caption="Madoff is accused of running a $50 billion Ponzi scheme through his investment company. He is free on bail."]

Gene Bloch
Managing Editor
CNN New York

Will Bernie Madoff be allowed to remain free on bail in his $7 million apartment on Manhattan’s Upper East Side??

Today the federal government will get another crack at putting him behind bars. The alleged Ponzi schemer will make an appearance in federal court today for an appeals hearing on the bail issue. Federal prosecutors are fighting a magistrate judge’s decision Monday for him to remain free on bail. Prosecutors say Madoff violated terms of his home detention by mailing several valuable items, like jewelry, a Cartier watch, and mittens to friends and relatives…items valued at more than $1 million. The defense says Madoff did this innocently, not realizing he was not permitted to send the items, which they described as “gifts.” A revocation of bail would be welcome news to many who believe that it’s an outrage that someone accused of ripping off billions of dollars from individuals, banks, charities, foundations, and thousands of their beneficiaries would be given better treatment than some kid busted for a small amount of pot. We have live cameras outside his apartment and downtown at federal court.

Will the Madoff case go to trial? It’s entirely possible that it will not, as court documents confirm that his attorneys and federal prosecutors are discussing a potential plea agreement.

We’re keeping an eye on fresh signs on the economy. Retail sales in December fell 2.7%, more than twice as bad as expected as holiday stores struggled. That’s the sixth straight month of decline for retail, the longest stretch of declining sales in at least 4 decades. At 2 p.m. we’ll get the Fed’s Beige Book regional assessment of how well (or poorly these days) conditions are around the country. And at 1030a we’ll get the weekly numbers from the Energy Department on how much oil and gas is being stockpiled.

On the gasoline front AAA reports the national average price for a gallon of regular unleaded gasoline increased to $1.792 a gallon, up 2-tenths of a cent from the previous day’s price of $1.790.

In The Energy Fix today we take another look at ethanol. When corn prices hit record highs this summer, critics pointed a finger at ethanol, and argued food shouldn’t be used for fuel.

Now a new way of making ethanol could silence those critics. This week, the country’s top ethanol producer opened the first plant in the United States that uses corncobs to make the biofuel. The company’s CEO says 5 billion gallons a year could eventually be made that way and 85 billion gallons from other plant waste products. This comes at a time when the ethanol industry is struggling. A major producer filed for bankruptcy at the end of last year, and other companies have shut down plants.

Filed under: Economy • Energy • Finance • Gene Bloch • Oil • Wall St.
soundoff (5 Responses)
  1. JC- Los Angeles

    How about an exchange program with Guantanamo Bay? Send a questionably detained prisoner home and replace him with a Madoff.

    We could systematically remove all the leaders, executives and politicians who have helped destroy America and provide them with new confines in a sub-tropical locale never to harm again.

    January 14, 2009 at 11:25 am |
  2. Heather,ca

    He is a lying cheating scumbag. He is beyond a schmuck. He is a sociopath. He will keep doing what he is doing until he is stopped. He doesnt care. He knows he holds the cards. Only hes dealing from the bottom of the deck. There is no way that $50B is all gone. It could be in gold bars in any off shore bank. Maybe millions in gold or something.

    January 14, 2009 at 11:23 am |
  3. Joanne, Solvay, NY

    I opened my year-end statements from my 401K, IRA and annuities to find that after 20 years of savings...at least 20% of my gross income, I have lost half of my retirement savings. And...this money was invested in solid mutual funds. Madoff is a bad man, but the law is set up to protect ilk like him....not workers like me.

    January 14, 2009 at 10:48 am |
  4. earle,florida

    Ask yourself this? Have the CEO's of the automaker's been prosecuted for wrong doing? Have the CEO's of the failed Freddie Mac/Fannie Mae,been accused of criminal wrong doing with a" Billion Dollar Hedge Fund"built into the off-balance books? Finally not to bore you, but have the CEO's of America's failed Financial Banks, Insurance Co.'s,Brokerage /Investment Firms Executives even been mentioned in the same language as Madoff? I've always thought a crook was a crook no matter what poison they use for their kill!

    January 14, 2009 at 10:36 am |
  5. Annie Kate

    I don't believe Madoff when he says he didn't know he wasn't suppose to give away things while this case is ongoing. If he didn't know then he obviously wasn't very qualified to work in the market. Anytime something like this happens or someone goes bankrupt you cannot give assets away and any you have given away for as long as 3 years beforehand are subject to come back to the estate to settle with investors and debtors.

    On the ethanol there is another vegetation that can be used for making it and it wouldn't take anything away from crops – not even acreage – it grows everywhere in the South and is roundly cursed as a worthless weed – its kudzu. From an article I read its even better than corn for ethanol and it cleans up the landscape for a while too – and it will grow back for the next year for 2 or 3 years....its hard to kill kudzu...believe me I've tried.

    January 14, 2009 at 10:27 am |