NEW YORK — Peter Madoff, the former No. 2 executive at Bernard Madoff Securities, stood before a judge Friday and admitted to committing numerous crimes.
He avoided paying taxes on tens of millions of dollars in income, he said. He put his wife on the firm’s payroll even though she never worked there. He submitted false filings to securities regulators.
But he also emphasized that at no time was he aware that his brother, Bernard, was orchestrating the largest Ponzi scheme in history, wiping out $65 billion in paper wealth and shattering lives around the globe.
“I was in shock, and my world was destroyed,” said Peter Madoff, describing his reaction when his brother told him about the fraud in December 2008. “I always looked up to and admired him.”
Later in the hearing he said, “I truly believed my brother was a brilliant trader.”
In a deal cut with prosecutors before his court appearance, Peter Madoff, 66, agreed to serve 10 years in prison, a sentence that still requires a judge’s approval. He has also agreed to forfeit all of his assets, including the proceeds from the sale of a co-op on the Upper East Side of Manhattan; two homes on Long Island and one in Palm Beach, Fla.; and a 1995 Ferrari 355 Spyder.
Judge Laura Taylor Swain of U.S. District Court in Manhattan accepted the plea, and set him free on bail until his Oct. 4 sentencing. He and his wife, Marion, must turn over their passports and remain in the New York metropolitan area, the judge ordered.
The 10-year sentence was a point of contention between federal prosecutors and the FBI. After Peter Madoff struck the deal with prosecutors, some officials at the FBI questioned whether he got off too easy, according to people close to the case.
Preet Bharara, the top federal prosecutor in New York, addressed the severity of the sentence in a statement on Friday, casting the penalty as steep. Peter Madoff “will now be jailed well into old age, and he will forfeit virtually every penny he has,” Bharara said. A dispute also emerged about the early-morning arrest. The FBI dispatched agents to arrest Peter Madoff at his lawyer’s office in Manhattan, and later drove him past a crowd of television cameras. Some officials wondered if the show was necessary since he had already agreed to plead guilty.
Peter Madoff acknowledged that, despite his role as the firm’s top legal and compliance officer, he failed to perform any meaningful oversight of his brother’s investment activities, enabling a fraud that played out for decades, during which he was considered among Wall Street’s most highly regarded money managers.
“I am deeply ashamed of my actions,” Peter Madoff, reading from notes in a gravelly voice reminiscent of his brother’s, said at the hearing before Swain.
“I want to apologize to anyone who was harmed and to my family, and I’m here today to take responsibility for my conduct,” he said, choking back tears.