Bernard Madoff Brother Peter Released From U.S. Custody

Peter Madoff, brother and longtime chief compliance officer of convicted Ponzi schemer Bernie Madoff, was released on Thursday from federal custody after serving most of a 10-year sentence.

His brother’s “sham compliance program” allowed Bernie Madoff to defraud investors of $19 billion in the biggest Ponzi scheme in history, a judge said at Peter Madoff’s 2012 sentencing. Though he helped run the firm for four decades, Madoff denied knowing it was a scam until just before it collapsed. He admitted helping his brother dole out the firm’s last $300 million to insiders after he learned of the fraud.

Peter Madoff, 74, was released Thurday from home confinement, which he was granted in November after doing time in a federal prison in Miami, according to Scott Taylor, a spokesman for the U.S. Bureau of Prisons. Taylor declined to say why Madoff was allowed home confinement, citing government policy.

The timing makes clear Madoff wasn’t one of the many federal inmates sent home because of the Covid-19 crisis. He may have been released under the terms of the 2018 First Step Act, which permits some inmates over 60 or those who have terminal illnesses to serve the end of their sentences on home confinement.

Raj Rajaratnam, the mastermind of what prosecutors said was one of the largest hedge-fund insider-trading rings in U.S. history, was released under the program last year. Rajaratnam, whose Galleon Group LLC once managed more than $7 billion, was sentenced to 11 years after being convicted in 2011.

Bernard Madoff, 84, on the other hand, lost a bid for compassionate release in June, after claiming he was terminally ill and likely to die within 18 months. After he submitted his plea for freedom in February, 520 of his victims wrote to the court, with 96% of them arguing against early release.

U.S. Circuit Judge Denny Chin in Manhattan, who originally sentenced Madoff to 150 years behind bars, denied the request. “When I sentenced Mr. Madoff in 2009, it was fully my intent that he live out the rest of his life in prison,” Chin said in his ruling. “Nothing has happened in the 11 years since to change my thinking.”

Peter Madoff’s guilty plea to two criminal charges came three years to the day after his brother’s sentencing. During his plea hearing, Madoff said his brother only told him of the fraud on Dec. 9, 2008, two days before he was arrested.

A settlement with the trustee seeking to recover money for victims of the scam required Peter Madoff’s family to forfeit assets valued at $90 million held by his wife, daughter and others.

The case is U.S. v. Madoff, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).

©2020 Bloomberg L.P.

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