Wall Street swindler Bernard Madoff's brother earned the 10 years in prison he bargained for in a plea deal through his greedy role in Madoff's crimes and by failing to stop them, the government told a judge on Thursday.
Prosecutors said in a sentencing brief that a decade in prison for Peter Madoff, 66, is appropriate after the lousy job he did as chief compliance officer for his brother's investment business, which lost roughly $20 billion for thousands of investors who thought their money had grown to be worth more than $65 billion over several decades. The sentencing is scheduled to take place in Manhattan federal court Dec. 20.
The government said a lengthy prison term is important to send a message to others working at private companies like the now-defunct Madoff firm that they are misinformed if they think they are "'under the radar' and can avoid scrutiny or significant jail terms" if they commit crimes.
Bernard Madoff, who's in his 70s, revealed in December 2008 that he cheated thousands of investors for years, using money from new investors to pay returns to existing clients. He pleaded guilty to fraud and is serving a 150-year prison sentence in Butner, N.C.
Peter Madoff, who had worked for his brother since 1966, claimed at his June plea to conspiracy and falsifying records charges that he was a victim of his brother and was shocked to learn the business was a sham.
"My world was destroyed," he said. "I lost everything I worked for."
Prosecutors wrote that Peter Madoff had every advantage in life to succeed with a law degree, securities licenses and a close family but "chose to abandon hard work to pursue riches through ongoing criminal activity."
The government said he created false reports claiming he had performed regular reviews of the firm's trading when he had not, even signing several weeks of fictitious trading reviews in one sitting by changing pens and ink colors to conceal that the reports were created simultaneously.
"Regulators, investors and auditors relied on the false statements made by Madoff in his false compliance reports," prosecutors wrote.
They said he steered about $50 million from the enormous fraud to himself and his family over the last decade, enjoying a lavish lifestyle that included multimillion-dollar homes on Park Avenue in Manhattan, in Palm Beach, Fla., and in Old Westbury.
The government said at least one victim has asked to speak at Madoff's sentencing and others have complained in writing that he had not revealed the fraud.
The government noted that Madoff's own sentencing brief, which was not filed publically, did not acknowledge the impact of his crimes on victims.
Lawyers for Madoff did not immediately respond to a message seeking comment Thursday.