The brother of imprisoned financier Bernard Madoff was sentenced to 10 years in prison for crimes committed in the shadow of his notorious sibling by a judge who said she disbelieved his claims that he did not know about the epic fraud.
Peter Madoff, 67, had agreed when he pleaded guilty in June to serve the maximum sentence allowable to the charges of conspiracy and falsifying the books and records of an investment adviser.
He follows to prison his 74-year-old brother, who is serving a 150-year sentence after admitting he created a fraud so large decades ago that thousands of people lost $20bn.
In New York, US District Judge Laura Swain urged Peter Madoff to tell the truth even now.
She said Madoff, wearing a smart charcoal suit, was “frankly not believable” when he claimed at his plea that he only learned of the fraud when his brother revealed it to him just before he surrendered to authorities.
Peter Madoff spoke briefly yesterday and less emotionally than in June, saying: “I am deeply ashamed of my conduct and have tried to atone by pleading guilty and have agreed to forfeit all of my present and future assets.”
He added: “I am profoundly sorry that my failures let many people down, including my loved ones.”
Two investors, among 40 who wrote victim impact statements, spoke during the proceedings, each describing the financial ruins of their extended family.
Michael De Vita, 62, also called for truth, saying he believed it to be “physically impossible for a single person to carry out such a gargantuan task all by himself”.
He said investors “have waited four years for others to accept responsibility for this massive crime. We are still waiting for that today.
“All of this was preventable if only one person was willing to do the right thing and stop this in its tracks years ago. Peter Madoff could have been that person.”
Amy Nissenbaum, 49, said Peter Madoff had chosen even after his plea to “turn a blind eye”, saying her home was being repossessed and on some days she struggled to “clothe and feed my children”.
She said Peter Madoff was part of his brother’s fraud for more than 30 years and he should serve the same amount of time in prison.
When the judge announced that Peter Madoff would not have to report to prison until February 6, Ms Nissenbaum laughed out loud bitterly.
The judge noted that 10 years was the maximum sentence allowed by the charges to which Madoff had pleaded and repeatedly urged him to relieve the pain of investors by revealing more about the family business.
“I challenge you to be honest about all that you have done and all that you have seen. In other words, all that you know,” she said.
The magnitude of the damage done by the Madoffs could not be underestimated, she said.
“Trust in financial institutions, thousands of individual lives and numerous charitable organisations have been blown apart,” she said.
Assistant US Attorney Lisa Baroni said it would have been easy for Peter Madoff to blow the whistle if he had even minimally carried out his duties. Instead, she said, he even teamed up with his brother to distribute the remaining 300 million dollars in the company’s accounts to family, friends and favoured clients before the FBI arrested his brother.
The sentencing comes four years and a week after Bernard Madoff first revealed the fraud, which occurred as the former Nasdaq stock exchange chairman built a reputation for delivering unparalleled investment results, even in bad times.
The revelation came only days after the business sent out statements that made clients think their investments had grown to a total of more than $65bn.
Peter Madoff said at his plea that he had no idea his brother was running a massive Ponzi – pyramid – scheme, paying off long-time clients at times with money from newer investors.
“My family was torn apart as a result of my brother’s atrocious conduct,” he said. “I was reviled by strangers as well as friends who assumed that I knew about the Ponzi scheme.”
Peter Madoff, who joined his brother’s firm after graduating from Fordham Law School in 1970, had been free on five million dollars’ bail after he agreed to surrender all assets.
Before sentencing, his lawyer John Wing said in a memorandum that Peter Madoff would “almost certainly live out his remaining days as a jobless pariah, in or out of prison”.
He called him a victim of his loyalty to his brother, saying he had been mistreated by the sibling who was eight years older and viewed as “the prince” by his mother.
As part of a forfeiture agreement, Peter Madoff’s wife Marion and daughter Shana must forfeit nearly all of their assets.
The US government said those assets and assets that will be forfeited by other family members include several homes, a Ferrari and more than 10 million dollars in cash and securities. His wife will be left with $771,733.