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March 12th, 2009
12:12 PM ET

Financial Dispatch: Madoff off to jail

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/SHOWBIZ/books/02/11/sesame.street/art.sesame.street.sw.jpg]

Andrew Torgan
CNN Financial News Producer

Bernard Madoff, who stole billions from investment clients, was ordered jailed today after pleading guilty to all 11 criminal counts in one of Wall Street's biggest swindles ever.

"I operated a Ponzi scheme," Madoff told a packed courtroom after U.S. District Judge Denny Chin told him to explain his crimes.

"I thought it would end quickly, but it proved impossible," said Madoff, who stole from more than 4,000 victims through his investment firm. "I am ashamed for these criminal acts. I always knew this day would come."

Judge Chin remanded the 70-year-old to jail following his confession. He could face a maximum 150-year sentence. His sentencing was set for June 16.

CNNMoney.com writes that Madoff, despite his white-collar status and non-violent history, won't be whiling away his days in some cushy "Club Fed" style prison. He’ll more likely land in a minimum-security federal prison or, if he's lucky, a less-stringent prison camp.

The number of Americans filing initial claims for jobless benefits rose last week, while the total number of people continuing to receive benefits set a fresh record high.

First-time claims for unemployment insurance increased to 654,000 from the previous week's upwardly revised figure of 645,000.

And the number of people receiving benefits for more than a week increased by 193,000 to 5.3 million, the highest number on records dating back to 1967.

The foreclosure picture suddenly darkened again in February.

More than 74,000 homes were lost to bank repossession during the month, up from 67,000 in January, according to a report from RealtyTrac. Nearly 1.2 million homes have been lost since the foreclosure crisis hit in August 2007.

The total number of foreclosure filings, meanwhile, rose 6% during the month after falling 10% in January. Worse still, filings leaped nearly 30% compared with February 2008.

The results defied expectations. A decline had been expected due to the numerous foreclosure moratoriums in effect during the month.

Mortgage giant Freddie Mac said late Wednesday it’s asked the government for an additional $30.8 billion in funding to close a gaping hole on its books.

The company, which has been majority-owned by taxpayers since its takeover in September, announced the funding request as it reported a loss of nearly $24 billion dollars for the fourth quarter of 2008 and more than $50 billion for the entire year.

After its first two-day winning streak in more than a month, can Wall Street make it three in a row? Stocks got off to a tentative start this morning but soon found their footing.

The last time we had a three-day win streak was in late January – Jan. 26 to 28. The Dow closed on Jan. 28 at 8,375. Today we’re hovering around the 7,000 mark.

Retail sales showed a smaller-than-expected decline in February after posting an unexpected jump in January.

The Commerce Department said total retail sales fell 0.1% last month, compared with January's revised increase of 1.8%.

Gas prices dropped 7-tenths of a cent overnight to $1.931 a gallon. 10 states have regular unleaded gas prices of $2 and higher. 40 states and the District of Columbia have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.509). The cheapest gas prices are in Wyoming ($1.737)

The meltdown of global financial markets slashed the ranks of the world's billionaires by 30% in 2008.

Microsoft founder Bill Gates topped the list, even though his net worth dived to $40 billion from $58 billion a year earlier. Gates reclaimed his title as “World’s Richest Man” because two other billionaires lost more on paper than he did.

Berkshire Hathaway CEO Warren Buffett, who was No. 1 on last year’s list, sank to No. 2 as his net worth plunged to $37 billion from $62 billion. And Mexican business magnate Carlos Slim Helu slid to No. 3, with wealth of $35 billion, down from $60 billion.

America’s millionaires also took it on the chin.

The number of American households with a net worth of $1 million or more, excluding the value of their primary residence, fell 27% to 6.7 million in 2008 from an all-time high of 9.2 million the year before, according to a report from market research firm Spectrem Group.

But don't weep only for the 2.5 million fewer millionaires. The report, which is based on surveys of 3,000 affluent households, also showed the number of both multi-millionaires and aspiring millionaires plummeted last year.

Affluent households, defined as those with a net worth of $500,000 or more, declined 28% to 11.3 million from 15.7 million.

Even the very rich have not been immune. Households worth $5 million or more, excluding primary residence, fell 28% to 840,000 last year from 1.16 million households in 2007.

Finally, what began on Wall Street and spread to Main Street has now hit Sesame Street.

Sesame Workshop, the nonprofit organization behind “Sesame Street,” said Wednesday it will be cutting approximately 20% of its workforce due to “the unprecedented challenges of today’s economic environment.”

A company spokeswoman said 67 out of a total of 355 employees will be let go, and that those cuts will be made across the board in every department.

Elmo is said to be less-than-tickled with the development.


Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Wall St.
soundoff (19 Responses)
  1. Annie Kate

    With all the talk about how much the rich people lost what are the stats on how many people slid from the middle class back down to the lower tier on the economic ladder? How many more people are living in poverty? How many more are living check to check? I'm sorry but someone who is rich being less rich does not interest me....I'm more interested in where most of us are and are having to deal with.

    March 12, 2009 at 8:54 pm |
  2. Beverly-NYC

    After the government stripes the Madoff family of their ill gotten gains. I think they should all get minimum wage jobs and pay old Berni's stay in jail. His scam provided for their cushy life all these years, they can pay for his. As someon who works in the financial industry jokers like him make my life harder every day. I sure there will be some Madoff Rule from regulators any day now.

    March 12, 2009 at 5:54 pm |
  3. Judy Reed

    OK Back to the MOST important topic. Lets not get sidetracked. What is the government doing to implement the Pickens Plan to get us off our addiction to foreign oil?

    March 12, 2009 at 5:04 pm |
  4. Neo

    Please continue asking those in gov't and your commentators how we got to this recession? It's important to concentrate on the why so that it will always remain in the conscious what to avoid in the future. So much corruption is coming out ..... it's amazing. Sometimes I feel like I'm in the middle of a mafia movie, this can't be real.

    March 12, 2009 at 4:10 pm |
  5. Fran Petersen

    How much will Mrs Madoff pay for 2008 income tax? If Madoff's victims didn't lose their fortunes until 2009 will they have to pay income tax for 2008? Will the government forgive the debt? Will government sieze any remaining assests from the victims or their spouses? The US sure could use the income. Or, maybe the government will bail them out as well. I sure could use a bailout. How about you?

    March 12, 2009 at 3:22 pm |
  6. Lisa in CA

    Why is it surprising that foreclosures are up? If people are collecting unemployment, their pay is significantly less resulting in an inability to pay mortgages, credit card debt, etc. Until the banks are willing to reduce interest rates across the board, the foreclosures will only increase. I'd also be curious to see if there is an increase in personal bankruptcies as well. I guess it's better financially for the banks to take the write-downs and losses than to actually have people pay their credit card debt.

    Maybe with the second stimulus being discussed, Obama will finally consider starting with the bottom up, as once again, top down is proving not to work.

    March 12, 2009 at 2:19 pm |
  7. Maria Concha

    I just hope he actually gets to live in prison for the rest of his life for what he did. I also hope his family is stripped of the money this man stole.

    March 12, 2009 at 1:56 pm |
  8. Al Jensen

    This morning on CNN Loretta Weinberg described how her money manager sent envelopes of her money to Madoff. Did he really, or is he merely taking advantage of the situation by claiming that is what happened to her money? If if did do that, doesn't the senator have legal recourse of her money manager?

    March 12, 2009 at 1:50 pm |
  9. Patrick

    What Madoff knowingly did and his intentions were absolutely deplorable and he should rot in jail. I hope everything he has will be taken from his family. But I find it difficult to feel sorry for those who had so much, and out of greed, trusted someone to get them more. These people really have no one to blame but themselves for taking uncalculated risks and that is the name of the game...RISK! You lost. Welcome to reality. I feel more for those who have worked and labored for their earnings, living modest lives, not trying to get ahead by investing out of greed. Pure and simple people, it was greed.

    March 12, 2009 at 1:45 pm |
  10. joanna

    Mari

    He will be in prison – Federal Pen. – when he has his sentencing hearing in June. This is how it works for anyone – they go to county jail to wait for their sentencing. Also, I believe justice is being served – finally. He's not getting off here. His attorneys might be able to get his sentence reduced, but that would be about it. If this judge didn't sentence him to some prison time, there would be a public outcry. I'm thinking that judge knows that. It's about time we started treating white collar crime they same way we treat any other crime. Finally!

    March 12, 2009 at 1:33 pm |
  11. Toni, Asoria Queens

    jail isn’t good enough for this pond scum! If you remember the movie “Landlord” with Joe Pesci, where Pesci’s character is sentenced to stay in one of the slum apartments, for which he was a slumlord; in like fashion, Madoff & his greedy cohorts should be sentenced to the worst tenement housing,as a prison cell would be too cushy for him. He should be sourounded by the filth that typifies the same piece of filth that he has come to represent in greed and corruption of the worst kind. His house should be seized, bank accounts & all of his assets taken from he and his wife & given to his victims.
    He should be put on welfare, and given what they receive; live off of food stamps, and poverty wages. Let them start from ground zero. If he’s worth anything, he can redeem himself by becoming an honest citizen.
    2Timothy 6:9,10-People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destructions. For the LOVE of money is a ROOT of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.
    Money isn’t evil in itself.
    2Timothy 6:17-Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain…

    March 12, 2009 at 1:32 pm |
  12. Lisa

    He thinks that pleading gulity this will save his family. I highly doubt that. I think they are just as guilty as he is. How do we really know that his sons or his wife didn't know? They could be just saying that just to protect themselves. Also when were the assets obtained by the wife? If they were obtained with fraudglent money, then why wouldn't they be subject to seizure. We once had a cable company named Adelphia here that was publicly traded. The older man and his son were both found guilty and sent to jail. I hope for all of those people who were victimized by this scum of a family that they get back everything they have lost.

    March 12, 2009 at 1:19 pm |
  13. Sharon S

    This is my thoughts on what to do with this man, first of all I think his whole family is involved and all assets should be taken from all of them and distributed amoung those he stole from, secondly I think that as someone on an earlier blog put it they should bring the gallows back and hang him and his entire family so that all those including the whole country gets to see him hang!

    Because frankly I do not want to pay to keep this vile person alive!
    ]Why should the taxpayers be burdened with feeding and giving shelter to this worthless creature of society? I think the gallows would be a great thing to bring back or at least the death penalty!
    He will never see the outside world again so why pay to keep him alive!

    March 12, 2009 at 1:12 pm |
  14. jimj

    It's ABOUT TIME Talk about double standards- If I did what he did I sure would not be living at home- My butt would have been in JAIL from day one. I would be required to pay restitution- When will the Court make this man do that?

    March 12, 2009 at 1:08 pm |
  15. Saad, NJ

    Madoff has killed so many parent dreams, so many grandparent dreams, he has dented the future of so any children.... he is equally as bad as Osama Bin Laden or other ignorant individuals who take innocent lives.

    I am not a supporter of death penalty but the likes of above need to be sent to the life hereafter – whatever that is.

    March 12, 2009 at 12:59 pm |
  16. Baze

    The prime example of a greedy white man trying to ensure his top notch quality of life for generations to follow

    March 12, 2009 at 12:52 pm |
  17. Lee, Milwaukee, WI

    Can anyone really believe Benard and his story that he just deposited the money in a bank account at Chase. Why wasn't that a red flag to the SEC and government when he did that. This is just unbelievable.

    March 12, 2009 at 12:46 pm |
  18. Michael "C" Lorton, Virginia

    From Wall Street--to Main Street--and go directly to jail-–that's is what happens when you don play the "Monopoly Game" correctly--and when you pass "Go"--you don't even collect the $200-but then again you made 50 billion. What a hell of a "ride."

    March 12, 2009 at 12:28 pm |
  19. Mari, Salt Lake City

    What is so disturbing is that Madoff has been living in his posh apartment instead of being in jail!

    Our nation sadly has two systems of justice one for the rich & powerful and one for the rest of us!

    DO you think that I would be free IF I had stolen anything from anyone?

    Nope.

    This man needs to be in jail, in the regular prison system! No mercy.

    March 12, 2009 at 12:20 pm |

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