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UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT _________________________________________x : UNITED STATES OF AMERICA, : : Appellee, : No._________________ : v. : : BERNARD L. MADOFF, : : Defendant-Appellant. : _________________________________________x

DEFENDANT-APPELLANT BERNARD L. MADOFF’S MOTION, PURSUANT TO FEDERAL RULE OF APPELLATE PROCEDURE 9(a)

FOR A STAY AND REINSTATEMENT OF BAIL PENDING SENTENCING PURSUANT TO 18 U.S.C. § 3143(a)

Ira Lee Sorkin, Esq. Daniel J. Horwitz, Esq. DICKSTEIN SHAPIRO LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 277-6500

Attorneys for Defendant-Appellant Bernard L. Madoff

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ................................................................................... iii

PRELIMINARY STATEMENT ...............................................................................1

BACKGROUND .......................................................................................................3 A. The District Court’s Initial Bail Conditions..........................................3 B. An Order Entered In The SEC Civil Case Against Mr. Madoff Froze

All Of Mr. Madoff’s Assets ..................................................................6 C. The Government’s Renewed Attempt To Revoke Bail Failed Because

Mr. Madoff Was Not A Flight Risk And Did Not Pose A Danger To The Community.....................................................................................7

D. Mr. Madoff, Who Was Well Aware Of The Substantial Jail Sentence

He Faced Prior To Pleading Guilty, Dutifully Appeared In Court To Plead Guilty...........................................................................................8

ARGUMENT ...........................................................................................................10

I. THE DISTRICT COURT CLEARLY ERRED IN FAILING TO RELEASE MR. MADOFF PENDING SENTENCING..................................................10 A. The Standard of Review......................................................................10 B. The District Court Erroneously Failed To Release Mr. Madoff

Because The Evidence Clearly Shows That Mr. Madoff Is Not A Flight Risk And Does Not Pose A Threat To The Community..........10

C. Mr. Madoff Is Not A Flight Risk ........................................................12 D. Mr. Madoff Does Not Have The Means To Flee Or Pose A Danger To

Any Individual Or The Community ....................................................16 E. Detention Pending Sentencing Will Interfere With Mr. Madoff’s

Ongoing Defense and Cooperation .....................................................17

II. SIMILAR DEFENDANTS HAVE BEEN AFFORDED RELEASE PENDING SENTENCING............................................................................18

CONCLUSION........................................................................................................19

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TABLE OF AUTHORITIES Page(s)

Cases

United States v. Abuhamra, 389 F.3d 309 (2d Cir. 2004) ...................................................................10, 11, 14

United States v. Ebbers, No. 02-cr-1144 (S.D.N.Y.) .................................................................................18

United States v. Friedman, 837 F.2d 38 (2d Cir. 1988) .................................................................................14

United States v. Lay, No. 04-cr-25 (S.D. Tex.).....................................................................................18

United States v. Madoff, 586 F. Supp. 2d 240 (S.D.N.Y. 2009) ............................................................7, 14

United States v. Norfleet, 185 F. Supp. 2d 315 (S.D.N.Y. 2002) ................................................................15

United States v. Pimentel, 932 F.2d 1029 (2d Cir. 1991) ...............................................................................9

United States v. Rigas, No. 02-cr-1236 (S.D.N.Y) ..................................................................................18

United States v. Skilling, No. 04-cv-25 (S.D. Tex.) ....................................................................................18

Statutes

15 U.S.C. §§ 78j(b), 78ff ...........................................................................................3

18 U.S.C. § 3143(a) ........................................................................................1,10, 11

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Other Authorities

Federal Rule of Appellate Procedure 9............................................................1, 8, 19

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Bernard L. Madoff respectfully submits this Memorandum of Law in

support of his motion, pursuant to Federal Rule of Appellate Procedure 9(a), for a

stay of the district court’s remand and reinstatement of bail pending sentencing

pursuant to 18 U.S.C. §§ 3143(a) and 3145(c).

PRELIMINARY STATEMENT

At issue in this motion is whether Mr. Madoff, who has been subject to

extremely restrictive bail conditions since his arrest, should be detained while

awaiting imposition of his sentence – notwithstanding that the clear and convincing

evidence demonstrates that Mr. Madoff is neither likely to flee, nor that he poses a

danger to any other person or the community. Prior to Mr. Madoff’s guilty plea,

three Magistrate Judges and one District Judge all concluded that not only did the

Government fail to prove a risk of flight, but that as a matter of fact Mr. Madoff

was not a flight risk and was not a danger to any individual or the community in

light of the bail conditions in place at the time. While Mr. Madoff has now pled

guilty to the charges against him, these facts remain true today, and we respectfully

submit that the Court should reverse the district court’s most recent decision

revoking bail and remanding Mr. Madoff.

The Bail Reform Act of 1984 (“Bail Reform Act”) does not foreclose

criminal defendants who have been convicted of the opportunity to be released

pending sentencing. In fact, the Bail Reform Act provides for just the opposite –

non-violent convicted criminal defendants, such as Mr. Madoff, shall be afforded

bail pending sentencing upon a showing by clear and convincing evidence that

they are not a flight risk and do not pose a danger to the community. The district

court, however, turned the Bail Reform Act on its head and essentially held that the

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loss of the presumption of innocence mandated Mr. Madoff’s remand. The Bail

Reform Act merely shifts the burden to the defendant – which here is irrelevant in

light of the clear and convincing evidence, both before and after his guilty plea,

that Mr. Madoff is not a risk of flight. Since his arrest, Mr. Madoff has complied

at all times with the extraordinarily restrictive bail conditions imposed upon him;

he has not attempted to flee nor has he attempted to harm any individual or the

community.

Moreover, the district court erroneously inserted an “incentive to flee”

standard into the Bail Reform Act, despite the fact that the Bail Reform Act does

not require a showing of no “incentive to flee.” Simply put, no one wants to go to

prison. Every convicted criminal has an incentive to flee. Yet, under the Bail

Reform Act, a convicted criminal may still be released upon a showing that there is

no risk of flight.

In short, Mr. Madoff has been subject to twenty-four hour surveillance,

seven days a week, while confined to absolute home detention. All of Mr.

Madoff’s assets have been frozen, all of his property has been inventoried, and

confessions of judgment have been secured against his and his wife’s real estate.

These conditions prevent Mr. Madoff from gaining access to assets that could be

used to help him flee or having any contact with the community, let alone harm the

community. As the district court previously recognized in this case, the chance of

Mr. Madoff fleeing under the imposed bail conditions was “as close to nil as you

can get.” As a result, under the Bail Reform Act, Mr. Madoff is entitled to be

released pending sentencing.

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Indeed, district courts from around the country have recognized that

white-collar criminal defendants, such as Mr. Madoff, should remain released

pending sentencing. Convicted executives from the biggest names in recent

corporate scandals – WorldCom, Adelphia, and Enron to name a few – were not

subjected to detention immediately following their convictions. Rather, these

defendants were all released following their convictions and prior to their

substantial sentences. The circumstances here are no different, and Mr. Madoff

should be afforded the same latitude under the Bail Reform Act.

Accordingly, the district court clearly erred in finding that Mr. Madoff is

a flight risk, and the district court’s remand order should be reversed.

BACKGROUND

A. The District Court’s Initial Bail Conditions

On December 11, 2008, Mr. Madoff was arrested and charged with one

count of securities fraud in violation of 15 U.S.C. §§ 78j(b), 78ff; 17 C.F.R. §

240.10b-5. According to the Complaint, at the time of his arrest, Mr. Madoff

indicated that he expected to be arrested and voluntarily admitted his culpability to

the FBI. See Declaration of Ira Lee Sorkin, Esq., dated March 13, 2009 (“Sorkin

Decl.”) at Ex. A. The Complaint also alleged that, immediately prior to his arrest,

Mr. Madoff confessed to his sons that he had committed a fraud in the amount of

$50 billion. Id. Based on these actions, Mr. Madoff certainly understood that he

faced essentially a life sentence at the time he made his confessions.

At his arraignment before Magistrate Judge Douglas F. Eaton on

December 11, 2008, the government did not seek to remand Mr. Madoff and

agreed to the following bail conditions: (1) a $10 million personal recognizance

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bond signed by Mr. Madoff, his wife, and three additional co-signers, and secured

by Mr. Madoff s residence in Manhattan; (2) surrender of Mr. Madoff’s travel

documents; and (3) travel restricted to the Southern and Eastern Districts of New

York, and the District of Connecticut. See Sorkin Decl., Ex. B. In fact, in

preparation for the arraignment, Pre-Trial Services interviewed Mr. Madoff, and

did not recommend pretrial detention. See Sorkin Decl., ¶ 5. Instead, Pre-Trial

Services recommended even less restrictive terms of release to include a personal

recognizance bond signed by two financially responsible individuals. Id.

All conditions were met by the deadline of December 16, 2008, except

that Mr. Madoff could not obtain two of the three additional co-signers for the

personal recognizance bond. See Sorkin Decl., ¶ 6. On that day, upon the request

of both parties, Magistrate Judge Gabriel W. Gorenstein extended Mr. Madoff’s

time to fulfill his bail conditions to December 17, 2008. See Sorkin Decl., Ex. C.

On December 17, 2008, the government and defense jointly requested the

following modified bail conditions, which were so ordered by Magistrate

Gorenstein: (1) home detention at the defendant’s Manhattan apartment, with

electronic ankle-bracelet monitoring; (2) the entry of confessions of judgment with

respect to the properties in Montauk, New York, and Palm Beach, Florida; (3)

surrender of Mrs. Madoff’s passport; (4) imposition of a curfew of 7 p.m. through

9 a.m.; and (5) reduction of the number of cosigners on the personal recognizance

bond from four to two. Id.

On December 18, 2008, the United States Attorney’s Office and defense

counsel discussed their concern for Mr. Madoff’s safety due to the media response

to his visit to court the day prior. See Sorkin Decl., ¶ 8. The parties requested

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modified bail conditions, which were so ordered by Magistrate Judge Theodore H.

Katz on December 19, 2008 (“December 19 Order”). See Sorkin Decl., Ex. D.

Pursuant to the December 19 Order, Mr. Madoff’s bail conditions included: (1) a

$10 million personal recognizance bond signed by Mr. Madoff, his wife, and his

brother, and secured by confessions of judgment on his wife’s properties in New

York, N.Y., Montauk, N.Y., and Palm Beach, worth a total of over $19 million; (2)

the surrender of Mr. and Mrs. Madoff’s passports, both of which had already been

surrendered; (3) other than for scheduled court appearances, confinement to home

detention in his Manhattan apartment 24 hours a day, with the electronic

monitoring device still attached to his ankle; (4) employment of a security firm

acceptable to the Government, at his wife’s expense, to provide the following

services to prevent harm or flight: (a) 24/7 monitoring at his building, including

video monitoring of all of the defendant’s apartment doors, and communications

devices and services permitting the security firm to send a direct signal from an

observation post to the FBI in the event of a suspicion of harm or flight (the “panic

button”); (b) with additional guards available on request if necessary to prevent

harm or flight. Id. The Security Plan was implemented and included an armed

guard stationed in a car outside of Mr. Madoff s residence 24 hours a day, 7 days

per week, who monitored all exits and entrances to the residence via security

cameras installed outside each door to Mr. Madoff’s apartment. Id. The guard

also monitored the panic button. Id. In addition, a “flight protocol” was

implemented, which required the armed guard to immediately notify 911 and the

FBI if Mr. Madoff attempted to leave his residence. Id. Furthermore, a

transportation protocol was employed to secure the safe travel to and from the

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courthouse when Mr. Madoff was required to appear in court. Id. All bail

conditions were immediately complied with.

B. An Order Entered In The SEC Civil Case Against Mr. Madoff Froze All Of Mr. Madoff’s Assets

On December 18, 2008, Mr. Madoff consented to, and Judge Louis L.

Stanton issued, a temporary restraining order, asset freeze, appointment of a

receiver and other relief against Mr. Madoff in SEC v. Madoff and Bernard L.

Madoff Investment Securities LLC, 08 Civ. 10791 (LLS). This order, in relevant

part, bars Mr. Madoff from transferring, assigning, dissipating, or otherwise

disposing of any assets, funds, or property of any kind whatsoever held by, or

under the direct or indirect control of Mr. Madoff or Bernard L. Madoff Investment

Securities LLC (“BMIS”). See Sorkin Decl., Ex. E. In addition, Judge Stanton

appointed Irving H. Picard, Esq. as the Securities Investor Protection Corporation

(“SIPC”) Trustee for BMIS, and appointed Lee Richards, Esq. as the receiver for

the assets of Madoff Securities International Ltd, Madoff Ltd., and any other

foreign entity operated by Mr. Madoff. Id. All bank accounts owned by Mr.

Madoff, jointly owned by Mr. Madoff and his wife, and owned by any of the

above-referenced Madoff companies were frozen pursuant to the SEC Order.

Thus, Mr. Madoff has no way of accessing or removing funds from these bank

accounts.

In addition, on December 31, 2008 Mr. Madoff provided a statement of

financial interest to the SEC and the United States Attorney’s Office which

included a detailed accounting of all assets owned by Mr. and Mrs. Madoff,

including real and personal property as required by the SEC Order. See Sorkin

Decl., Ex. F. Shortly after Mr. Picard’s appointment as SIPC Trustee and at Mr.

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Madoff’s request, Mr. Picard and the Government were advised that Mr. and Mrs.

Madoff were willing to relinquish many of their assets, including their properties in

Palm Beach, and Antibes, France, four boats, and three cars. See Sorkin Decl., ¶

12. Since that time, Mr. Madoff and the Government have created a mechanism by

which assets can be lawfully transferred, by, among other things, lifting freeze

orders with respect to certain assets and entering into interlocutory sales

agreements with the consent and approval of the Government. Id.

C. The Government’s Renewed Attempt To Revoke Bail Failed Because Mr. Madoff Was Not A Flight Risk And Did Not Pose A Danger To The Community

In January 2009, the Government sought to detain Mr. Madoff, arguing

that Mr. Madoff posed a risk of flight and danger to the community – not that Mr.

Madoff violated any specific bail conditions. See Sorkin Decl., ¶ 13. On January

12, 2009, Magistrate Judge Ellis denied the Government’s motion, but

incorporated three additional conditions to Mr. Madoff’s bail. See United States v.

Madoff, 586 F. Supp. 2d 240 (S.D.N.Y. 2009). First, Magistrate Judge Ellis

adopted the restrictions set forth in the SEC Order. See Sorkin Decl., Ex. G.

Second, Magistrate Judge Ellis incorporated the restrictions agreed to by Mrs.

Madoff in a voluntary restraint agreement. Id. Finally, Magistrate Judge Ellis

ordered Mr. Madoff to compile an inventory of all valuable portable items in his

Manhattan home, which were to be checked once every two weeks by Government

approved security who were also required to inspect all incoming and outgoing

mail. Id.

The Government, not satisfied with Mr. Madoff’s highly restrictive bail

conditions, appealed Magistrate Judge Ellis’s order to the district court. See Sorkin

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Decl., Ex. H. On January 14, 2009, the parties appeared before Judge Lawrence

M. McKenna on the Government’s appeal. See Sorkin Decl., Ex. I. At that

hearing, Judge McKenna found that Mr. Madoff did not pose a flight risk or danger

to the community such that his detention was necessary. Id. In so holding, Judge

McKenna stated “I think the chances of Mr. Madoff fleeing at this point are as

close to nil as you can get in any bail package.” Id. at 28(emphasis added).

By order entered January 16, 2009, Judge McKenna denied the

Government’s appeal. See Sorkin Decl., Ex. J. In so doing, Judge McKenna

adopted Judge Ellis’s additional bail conditions, except Judge McKenna required

Mr. Madoff compile an inventory of all valuable portable items in his homes in

Montauk, N.Y. and Palm Beach, Fla., as well as the property owned by Mrs.

Madoff in Antibes, France. Id.

D. Mr. Madoff, Who Was Well Aware Of The Substantial Jail Sentence He Faced Prior To Pleading Guilty, Dutifully Appeared In Court To Plead Guilty

On March 6, 2009 – six days prior to his guilty plea – the Government

indicated its view to Mr. Madoff that Mr. Madoff faced a maximum sentence of

150 years in prison. See Sorkin Decl., ¶ 18. Four days later, on March 10, 2009,

the Government filed an Information against Mr. Madoff containing eleven

separate counts against Mr. Madoff and seeking 150 years imprisonment. See

Sorkin Decl., Ex. K. That same day, fully cognizant of the prison term that

potentially awaited him, Mr. Madoff appeared before the district court, Honorable

Denny Chin, and executed a waiver of indictment. See Sorkin Decl., Ex. L. At

that time, Mr. Madoff indicated, through his attorneys, that he intended to plead

guilty at his arraignment scheduled for March 12, 2009. Id., at 21:18. At the same

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time the Government filed the Information, the Government provided to Mr.

Madoff’s attorneys a letter pursuant to United States v. Pimentel, 932 F.2d 1029,

1034 (2d Cir. 1991), in which the Government set out its view that Mr. Madoff

faced a maximum sentence of 150 years incarceration. Knowing that he faced a

maximum 150 years in prison, Mr. Madoff dutifully appeared before the district

court on March 12, 2009, to plead guilty to all eleven counts of the Information.

See Sorkin Decl., Ex. M.

On that date, following argument by defense counsel, Judge Denny Chin

remanded Mr. Madoff. In so doing, the district court ignored the undisputed facts

surrounding Mr. Madoff’s bail conditions that make it impossible for Mr. Madoff

to flee or pose a danger to anyone and, instead, simply decided that because of Mr.

Madoff’s potential prison sentence, his advanced age and the loss of the

presumption of innocence as a result of the guilty plea, Mr. Madoff has an

incentive to flee. Id. at 49:23:50:1. The district court further ignored the fact that

Mr. Madoff’s access to all of his assets has been completely restricted, and

erroneously found that Mr. Madoff “has the means to flee.” Id. at 50:1. Thus,

without any meaningful explanation, the district court found that Mr. Madoff

“presents a risk of flight” and revoked Mr. Madoff’s bail. Id. at 50:1-2. The

district court entered an order remanding Mr. Madoof, see Sorkin Decl., Ex. N, and

immediately thereafter, Mr. Madoff filed a notice of appeal.

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ARGUMENT

I. THE DISTRICT COURT CLEARLY ERRED IN FAILING TO RELEASE MR. MADOFF PENDING SENTENCING

A. The Standard of Review

Pursuant to Federal Rule of Appellate Procedure 9, this Court has the

authority to order the release of a defendant prior to the entry of judgment of

conviction. This Court reviews the district court’s factual findings regarding Mr.

Madoff’s pre-sentencing detention for clear error – which “applies not only to the

court’s specific predicate factual findings but also the overall assessment, based on

those predicate facts, as to the risk of flight or danger presented by the defendant’s

release.”1 United States v. Abuhamra, 389 F.3d 309, 317 (2d Cir. 2004).

B. The District Court Erroneously Failed To Release Mr. Madoff Because The Evidence Clearly Shows That Mr. Madoff Is Not A Flight Risk And Does Not Pose A Threat To The Community

Mr. Madoff’s restrictive bail conditions were reviewed four times prior to

his plea allocution. Each time Mr. Madoff’s bail conditions were reviewed, the

courts found, whether explicitly or implicitly, that not only did the Government fail

to prove that Mr. Madoff was a flight risk or a danger to the community, but that

the facts did not show that Mr. Madoff was a flight risk or a danger to the

community. These prior determinations were made notwithstanding the fact that

Mr. Madoff confessed to his sons that he committed a $50 Ponzi scheme and then

confessed to the authorities the next day upon his arrest. Rather, the Magistrate

Judges and the District Judge imposed highly restrictive bail conditions on Mr.

Madoff, with which Mr. Madoff fully complied at all times since the day of his 1 It is well settled that this Court has jurisdiction to review the district court’s detention of Mr. Madoff prior to sentencing. See United States v. Abuhamra, 389 F.3d 309, 317 (2d Cir. 2004) (citing 18 U.S.C. § 3145(c) and 28 U.S.C. § 1291).

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arrest. These bail conditions fully assure that Mr. Madoff is not a flight risk and

that Mr. Madoff does not pose a threat to the safety of the community.

The fact that Mr. Madoff has now pled guilty does not mean that Mr.

Madoff is not entitled to bail pending sentencing. The statutory provision in the

Bail Reform Act, which guides a court in setting bail for a defendant pending

sentencing, is Section 3143(a) of Title 18 of the United States Code. This

provision provides that, although he has pled guilty, Mr. Madoff is entitled to

release awaiting imposition of the sentence under the appropriate circumstances,

and states:

(a) Release or detention pending sentence.--(1) Except as provided in paragraph (2), the judicial officer shall order that a person who has been found guilty of an offense and who is awaiting imposition or execution of sentence, other than a person for whom the applicable guideline promulgated pursuant to 28 U.S.C. 994 does not recommend a term of imprisonment, be detained, unless the judicial officer finds by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released under section 3142(b) or (c). If the judicial officer makes such a finding, such judicial officer shall order the release of the person in accordance with section 3142(b) or (c)

18 U.S.C. § 3143(a)(1). Thus, in order to secure release after his guilty plea, but

prior to the imposition of a sentence, Mr. Madoff must show with “clear and

convincing evidence that he is not a risk of flight or a danger to any person or the

community.” Id. If Mr. Madoff “can make the required evidentiary showing, the

statute establishes a right to liberty that is not simply discretionary but mandatory:

the judge ‘shall order the release of the person in accordance with section 3142(b)

or (c).’” Abuhamra, 389 F.3d at 319.

The district court, however, failed to take into consideration the

undisputed facts that Mr. Madoff posed no risk of flight. Instead – without support

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from a single piece of evidence – the district court concluded that Mr. Madoff

posed a flight risk. The district court reasoned that because of Mr. Madoff’s

potential sentence and age, Mr. Madoff had the incentive to flee. Mr. Madoff’s

potential sentence and age have always been front and center in his previous bail

determinations and every criminal defendant always has an incentive to flee –

nobody wants to go to jail. In fact, Mr. Madoff has always dutifully honored his

bail conditions, notwithstanding the fact that he has been cognizant of the serious

prison sentence his faced since the day he confessed to authorities.

In essence, the district court applied the wrong standard because the Bail

Reform Act does not require a showing that a defendant does not have an incentive

to flee. Indeed, the Bail Reform Act, perhaps recognizing that every defendant has

an incentive to flee following a conviction, does not even mention the term

“incentive to flee.” Instead, the Bail Reform Act requires a showing that that the

defendant is not a flight risk. As such, the district court applied the wrong standard

under the Bail Reform Act.

Furthermore, the district court’s conclusion that Mr. Madoff has “means

to flee” is wholly unsupported. In fact, as discussed below, the clear and

convincing evidence shows just the opposite – Mr. Madoff is not a flight risk and

does not poses the means to flee. Therefore the district court should have ordered

his continued release pending sentencing.

C. Mr. Madoff Is Not A Flight Risk

The district court’s conclusion that Mr. Madoff is a flight risk is clearly

erroneous. The risk of Mr. Madoff’s flight in this case is virtually zero because the

lower court’s previous bail orders set stringent safeguards to ensure that Mr.

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Madoff is both sufficiently dissuaded from fleeing and is closely monitored while

detained in his home. Specifically, the district court ordered that Mr. Madoff (1)

post a $10 million personal recognizance bond to be secured by three real

properties and co-signed by two persons; (2) file a confession of judgment with

respect to the three real properties; (3) be subject to home detention at his

Manhattan apartment 24/7 with electronic monitoring; (4) employ, at his wife’s

expense, a security firm acceptable to the Government, which will provide 24/7

monitoring at the defendant’s building, including video monitoring of the Mr.

Madoff’s apartment doors, and communications devises and services permitting

security to send a direct signal from an observation post to the FBI in the event of

the slightest appearance of harm or flight; and (5) surrender his and his wife’s

passport. See Sorkin Decl., Ex. D.

Moreover, the undisputed facts show that Mr. Madoff never planned to

flee. Mr. Madoff has displayed no inclination to leave his apartment, let alone flee

this jurisdiction. In fact, it was Mr. Madoff himself who told his sons of his

criminal acts, expecting them to apprise the authorities of his fraudulent investment

advisory business. This was hardly an act of a man, knowing that he would go to

jail, planning to flee. Mr. Madoff also agreed to plead guilty with the full

understanding that he faced a substantial prison sentence. This is hardly an act of a

man planning to flee. Finally, six days before Mr. Madoff’s plea allocution, Mr.

Madoff was advised by the Government that he faced a maximum of 150 years in

prison. Yet, Mr. Madoff twice thereafter appeared in the district court. Again,

these are hardly the acts of a man planning to flee.

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To the contrary, since his arrest on December 11, Mr. Madoff has left the

confines of his Manhattan apartment only for the purposes of attending court

hearings.2 See United States v. Eberhard, No. 03 CR. 562-01(RWS), 2005 WL

1384038, at *10 (“As Eberhard has kept all court appearances and is not viewed as

a flight risk or a danger to the community, he is deemed a good candidate for

voluntary surrender, pursuant to 18 U.S.C. § 3143(a)(2).”). Furthermore, Mr.

Madoff has at all times complied with his initial curfew and his later-imposed

absolute home detention. He is a life-long New York resident, has no prior

criminal record and has family in the New York area – all of which provides

further support for the finding that Mr. Madoff does not pose a real risk of flight.

See United States v. Friedman, 837 F.2d 38, 50 (2d Cir. 1988) (holding in the

context of pretrial detention, no serious risk of flight existed where it was

undisputed that defendant was “a life-long New York resident, that he has no

criminal record, that he has no passport or known ability to evade surveillance, that

he has worked gainfully in the New York area for twenty-five years prior to his

arrest, and that he is married and has three children, all of whom live in the New

York area.”).3 Additionally, the international notoriety of this case and the

2 In compliance with and since entry of the December 19 Order, Mr. Madoff has only left his apartment to attend court hearings. His meetings with counsel are held in his apartment. 3 As this Court has recognized, the Bail Reform Act employs differing standards with respect to pre- and post-conviction detention. See Abuhamra, 389 F.3d at 319-20. However, cases concerning pre-conviction detention are relevant insofar as they articulate the meaning of terms contained in the Bail Reform Act, such as “risk of flight” and “danger to the community.” Madoff, 586 F. Supp. 2d at 253, n. 10 (“While the burden of proof and standard may differ when the presumption of innocence remains with the defendant in the context of pretrial detention, bail decisions are made pursuant to the Bail Reform Act, and the terms used should be given the same meaning.”).

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understandable stigma associated with fugitive status have the effect of depriving

Mr. Madoff of any meaningful opportunity to flee this jurisdiction without notice.

Indeed, in addition to the strict 24/7 surveillance, Mr. Madoff’s every move has

been scrutinized by the news media, which set up camp in front of Mr. Madoff’s

apartment building.4 The simple truth is that Mr. Madoff could not flee.

Finally, that Mr. Madoff has now pled guilty does not alter the factual

analysis regarding his risk of flight in any meaningful way. The district court

ignored the fact that Mr. Madoff was always cognizant of the fact that he would

die in prison – in essence, this was a foregone conclusion since the moment of his

arrest on December 11, 2008. As stated in the complaint filed by the Government

on the day of his arrest, Mr. Madoff admitted to the arresting FBI agent that

“[t]here is no innocent explanation” for his conduct and that “he expected to go to

jail.” Sorkin Decl., Ex. A at ¶ 5. The reality of a life in prison term is not a recent

revelation to Mr. Madoff, but an inevitability that he has been aware of since his

arrest, if not earlier. The fact that he has now pled guilty does not change the fact

that Mr. Madoff is not, and never was, a flight risk. Such was the case in United

States v. Norfleet, 185 F. Supp. 2d 315, 320-21 (S.D.N.Y. 2002), in which the

district court rightly determined that an entry of a plea allocution was not a

sufficient changed circumstance to warrant revocation of bail. Under these

circumstances, Mr. Madoff’s guilty plea does not make Mr. Madoff any greater of

4 In fact, ABC News set up a camera in an apartment across the street from Mr. Madoff’s apartment and successfully recorded Mr. Madoff as he went about his affairs in his apartment. See http://abcnews.go.com/Video/playerIndex?id=6925303 (last visited March 12, 2009).

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a flight risk than he was prior to conviction – particularly in consideration of the

highly restrictive bail conditions previously imposed.

D. Mr. Madoff Does Not Have The Means To Flee Or Pose A Danger To Any Individual Or The Community

Similarly, in direct contravention of the district court’s finding, the

evidence shows that, as a result of the stringent conditions placed on Mr. Madoff,

Mr. Madoff does not have the means to flee or the ability harm to an individual or

the community.5 Mr. Madoff simply does not have access to any means that

would enable him to flee in light of the stringent restrictions imposed by the most

recent set of bail conditions: (1) his bank accounts and other assets are frozen; (2)

his real property is pledged; (3) his businesses are in receivership; (4) he is

confined to home detention; (5) he is subject to constant video and electronic

surveillance, monitored by armed guards; (6) an inventory of all valuable portable

assets in the residences is being compiled and shall be regularly checked by

private, Government-approved security; and (7) all incoming and outgoing mail

and packages are inspected. In fact, Mr. Madoff has started to turn over assets to

the receiver and trustee. There is no dispute that Mr. Madoff has complied with all

of these conditions, which establishes beyond any doubt that Mr. Madoff lacks the

means to flee.

In fact, Judge McKenna specifically examined the fact surrounding Mr.

Madoff’s access to assets and means to flee. Judge McKenna concluded that his

access to assets, which had been so severely limited, was not enough to constitute

either a risk of flight or ability to flee. In fact, Judge McKenna, in an abundance of 5 In fact, the district court did not even address whether Mr. Madoff posed a threat to any individual or the community during the December 12th bail plea allocution and bail hearing.

17 DOCSNY-353733v06

caution, went on to tighten the restrictions creating a belt and suspenders bail

package. This evidence was before Judge Chin, who ignored these facts and

findings without explanation. As a result, Judge Chin therefore clearly erred in

failing to consider the findings of Judge McKenna and the facts that underlie those

findings in concluding that Mr. Madoff had the means to flee.

E. Detention Pending Sentencing Will Interfere With Mr. Madoff’s Ongoing Defense and Cooperation

Now that Mr. Madoff has pled guilty, there remains at least one major

issue as between the Government and Mr. Madoff – restitution and/or forfeiture.

The Government has informed defense counsel that its forfeiture figure of $177

billion represents the total amount of money deposited in Bernard L. Madoff

Investment Securities, LLC’s (“BMIS”) bank account for the investment advisory

business.6 While defense counsel has yet to properly analyze the forfeiture figure

(as it does not yet have access to a full set of records), in order for defense counsel

to effectively assist Mr. Madoff in resolving this issue in advance of sentencing,

Mr. Madoff’s participation is crucial. Mr. Madoff’s contribution to this effort will

be severely hampered, if not altogether eliminated, if he is remanded and, in all

likelihood, placed in solitary confinement pending sentencing.

Moreover, because the Government is seeking restitution for the victims

of the fraud, defense counsel, as well as the receiver, will need Mr. Madoff’s

assistance in recreating and interpreting the clients’ records. Mr. Madoff, as

admitted during his allocution, was the only person responsible for the crimes and,

as a result, is the only person with the knowledge needed to decipher the relevant 6 Even assuming the accuracy of that number, however, the government fails to account for the substantial amounts of money that Mr. Madoff paid to investors in the form of redemptions.

18 DOCSNY-353733v06

records. Without Mr. Madoff’s active assistance, it will be difficult, if not

impossible, for defense counsel to effectively represent Mr. Madoff at sentencing

regarding restitution and forfeiture, or at any other forfeiture proceeding.

II. SIMILAR DEFENDANTS HAVE BEEN AFFORDED RELEASE PENDING SENTENCING

Finally, to put Mr. Madoff’s request in perspective, over the past decade,

this Circuit, and circuits around the country, have seen other high-profile white-

collar defendants afforded release pending sentencing (and, in many

circumstances, pending appeal). As is the case here, these cases involved billion

dollar frauds and substantial jail sentences. In fact, all of the below listed cases

involved a defendant who refused to accept responsibility for their fraudulent

conduct and, instead, chose to dispute the charges against them at trial, rather than

plead guilty as Mr. Madoff has here. Nonetheless, throughout the country, even

the most notorious and high-profile white-collar criminal defendants are afforded

the opportunity to remain free under their prior bail conditions pending sentencing.

These cases include:

♦ Bernard Ebbers, former CEO of WorldCom, United States v. Ebbers, No. 02-cr-1144 (S.D.N.Y. Mar. 15, 2005) (sentenced to 25 years).

♦ John Rigas, founder of Adelphia Communications, United States v. Rigas, No. 02-cr-1236 (S.D.N.Y) (sentenced to 15 years).

♦ Kenneth Lay, former CEO of Enron, United States v. Lay, No. 04-cr-25 (S.D. Tex. May 25, 2006) (died before sentencing).

♦ Jeffrey Skilling, former CEO of Enron, United States v. Skilling, No. 04-cv-25 (S.D. Tex. May 25, 2006) (sentenced to 24 years).

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In fact, these criminal defendants fared far better than Mr. Madoff.

Unlike Mr. Madoff, these defendants avoided prison for years while they awaited

trial, sentencing and, in some cases, appeal. On the other hand, Mr. Madoff

promptly pled guilty and has accepted responsibility for his wrongdoing. Mr.

Madoff should, at the very least, receive the same treatment as these convicted

defendants – all of whom certainly had an incentive to flee – and should be

released pending sentencing.

CONCLUSION

For the foregoing reasons, Mr. Madoff respectfully requests that this

Court, pursuant to Federal Rule of Appellate Procedure 9(a), stay the order of

detention and reinstate his bail pending sentencing. Dated: March 13, 2009 Respectfully submitted, New York, New York DICKSTEIN SHAPIRO LLP

By:_____s/____________________ Ira Lee Sorkin, Esq. Daniel J. Horwitz, Esq. DICKSTEIN SHAPIRO LLP 1177 Avenue of the Americas New York, New York 10036 Tel: (212) 277-6500