Madoff Investment Scandal - Charges and Sentencing

Charges and Sentencing

The criminal case is U.S.A. v. Madoff, 1:08-mJ-02735.

The SEC case is Securities and Exchange Commission v. Madoff, 1:08-cv- 10791, both U.S. District Court, Southern District of New York (Brooklyn). The cases against Fairfield Greenwich Group et al. are consolidated as 09-118 in U.S. District Court for the Southern District of New York (Manhattan).

While awaiting sentencing, Madoff met with the SEC's Inspector General, H. David Kotz, who was conducting an investigation into how regulators failed to detect the fraud despite numerous red flags. Because of concerns of improper conduct by Kotz in the Madoff investigation, Inspector General David C. Williams of the U.S. Postal Service was brought in to conduct an independent, outside review of Kotz's alleged improper conduct. The Williams Report questioned Kotz’s work on the Madoff investigation, because Kotz was a "very good friend" with Markopolos. Although investigators were not able to determine when Kotz and Markopolos became friends, the Report concluded that it would have violated U.S. ethics rules if their relationship began before or during Kotz’s investigation of Madoff.

Former SEC Chairman Harvey Pitt estimated the actual net fraud to be between $10 and $17 billion, because it does not include the fictional returns credited to the Madoff's customer accounts.