Will Bernie Madoff Now Talk?

In sentencing Bernard Madoff to 150 years, Judge Denny Chin expressed the outrage and condemnation that so many feel. He also set in motion a subtle dynamic.

The 150 year sentence must be a record for white collar crime. With Madoff being 71, he's destined to die in prison. That is, unless the sentence is reduced.

An inmate whose record is so egregious as Madoff's won't have much chance for a reduction of sentence. But he might pull it off if he provides substantial and fruitful cooperation to the government's continuing investigation. In this case, cooperation would include, at a minimum, information, testimony, documents, and any assets he hasn't turned over. While Madoff may have provided the government with some information through his lawyer, cooperation of the sentencing-reducing sort would mean full, unreserved and comprehensive disclosure, with nothing held back (except possibly limited amounts of information subject to legal privileges like the attorney-client privilege).

Clearly, Madoff doesn't want to spend the rest of his life in jail. His lawyer proposed a 12 year sentence, which isn't any slap on the wrist because it would mean incarceration in a medium security prison. You'd be better off in a 50-year old motel near the freeway in downtown Detroit than in a medium security prison (although that would be a close call). But a 12 year sentence, with time off for good behavior, might have gotten him out before he went six feet under. He hasn't got a prayer of living to see an early release for good behavior now.

As we discussed before, it is very curious that Madoff pled guilty without agreeing to cooperate with the government (see http://blogger.uncleleosden.com/2009/03/what-bernie-madoff-told-us-today.html). For a guy who apparently doesn't want to spend the rest of his life in prison, cooperation would be the most obvious way to get a lighter sentence. Since Madoff didn't agree to cooperate, he may well have something to hide. Billions stashed away overseas? He was laundering money for narco traffickers? He was hiding assets for foreign dictators and Russian oligarchs? His unreserved cooperation would mean jail time for his wife and sons?

Judge Chin, a former federal prosecutor, would surely understand the pressure a 150 year sentence would place on Madoff to cooperate. And perhaps that was his intention. Madoff and his lawyer will probably be chatting about this question. Perhaps equally important, people that Madoff might implicate will likely be chatting with their lawyers about this question. If Madoff fingers them now, their sentences could be harsher than if they stepped forward first, admitted guilt and themselves cooperated with the government. If they step forward quickly before Bernie talks, they may get significantly better outcomes than Bernie.

Madoff and others may have been stonewalling the government so far. But the 150 year sentence places Bernie under greater pressure to cooperate. Others who may be involved in the scam know, as do we all, that Madoff has betrayed plenty of people before. Can they be sure he'll protect them now? Or should they step forward first and get the sweetest deal available under the circumstances from the government?

The Bernie Madoff story may not be over. Time will tell.