Newsday
MADOFF STAYS IN PENTHOUSE, DODGES JAIL
JUDGE DOES NOT REVOKE ACCUSED SWINDLER'S BAIL
By Anthony Destefano
January 12, 2009

Accused Wall Street scammer Bernard Madoff will await trial in the comforts of his luxurious Manhattan penthouse apartment instead of a jail cell, a federal magistrate-judge ruled Monday.

Magistrate-Judge Ronald Ellis said federal prosecutors didn't make a convincing case that Madoff, 70, should have his $10-million bail revoked because he attempted to give away valuable jewelry to family and friends.

But legal sources familiar with the case who asked not to be named said prosecutors intended to appeal the 22-page decision. A spokeswoman for the U.S. attorneys office in Manhattan declined comment when asked about an appeal.

The ruling angered investors who feel Madoff should be sent to jail for allegedly bilking investors out of $50 billion.

"Although . . . it sounds like the decision was a correct one based on legal standards, everyone would like to see this guy rot in prison," said attorney Stephen Breitstone, whose firm, Mineola-based Meltzer Lippe Goldstein & Breitstone Llp, has said it is seeking relief for Madoff investors who paid taxes on "fictitious income."

"There is a thirst for blood that transcends just those who have been victimized," said attorney Stephen A. Weiss, who added that some of his several dozen Madoff investors "just want to have this guy's head."

While acknowledging the enormity of the allegations against Madoff - who was arrested last month on charges he ran a $50 billion Ponzi scheme and is loathed by investors - Ellis said Manhattan federal prosecutors failed to show that the disgraced investment guru was a danger to the public or was a risk to flee.

"The issue at this stage of the criminal proceedings is not whether Madoff has been charged in perhaps the largest Ponzi scheme ever, nor whether Madoff's alleged actions should result in his widespread disapprobation by the public, nor even what is appropriate punishment after conviction," Ellis stressed in his ruling.

Rather, Ellis said, the legal issue before the court is whether the government has carried its burden of demonstrating that no conditions or combinations of conditions can be set that will reasonably assure Madoff's appearance and protect the community from danger.

Ellis rejected the prosecutions' argument that the attempt to give away jewelry was sufficient cause to overturn the bail granted to Madoff last month. Ellis also noted the prosecutors had agreed with Madoff's attorneys on the earlier bail package, which confined him to his apartment, with electronic monitoring and a private security service watching his apartment.

But to address government concerns about Madoff, Ellis imposed additional restrictions, such as including a civil injunction obtained by the Securities and Exchange Commission and a requirement that all outgoing mail from Madoff's apartment be screened.

Ira Sorkin, Madoff's defense attorney, said, "The ruling speaks for itself. We intend to comply with the court's order."

Some legal experts not connected to the case expressed concern that Madoff may still try to flee or dissipate assets.

"My concern would still be that someone that bright and with those kinds of connections might find a way to do something," said former federal prosecutor Steven K. Frankel of Manhattan.

"The investors feel once again this guy has bought his way out of a situation which most other people could not," said Frankel.

Staff writer Tom Incantalupo contributed to this report

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