Push for Madoff to Sing about Schumer-like Ties, Appeal Filed

Circuit Set to Hear Appeal on Madoff Bail
The New York Law Journal by Mark Hamblett - March 16, 2009

Bernard Madoff's lawyers will have a tough time convincing the U.S. Court of Appeals for the Second Circuit to order their client released on bail until he is sentenced June 16, because the standards for post-conviction release are high and hard to meet. Ira Sorkin and Daniel Horwitz of Dickstein Shapiro filed papers in the circuit Friday arguing that Southern District Judge Denny Chin should not have revoked Mr. Madoff's bail on Thursday, which sent him off to the Metropolitan Correctional Center following his guilty plea. Arguments are scheduled for this Thursday morning before Judges Dennis Jacobs, Richard Wesley and Robert Sack. The government is expected to submit its own papers by tomorrow, arguing that Judge Chin's decision should stand. Messrs. Sorkin and Horwitz will first try to convince the panel to quickly grant their motion to stay the remand order and their motion to reinstate the bail conditions that governed Mr. Madoff until he pleaded guilty to 11 felonies in the multi-billion dollar fraud he executed out of the offices at Bernard L. Madoff Investment Securities. If they are unsuccessful on those motions, the attorneys can still follow through with their appeal of Judge Chin's decision, albeit over a longer time period. Post-conviction detention is governed under 18 U.S.C. §3143, and the standards for determining bail are much stricter than those for pretrial bail under §3142, in part because the presumption of innocence no longer applies.

But the basic difference is that in the Bail Reform Act "there is no constitutional right to bail once a person has been convicted." These distinctions were made by Mr. Sorkin in papers filed during his successful effort in January to persuade Magistrate Judge Ronald Ellis to allow Mr. Madoff to remain out on bail pending a trial or a plea - a decision Judge Lawrence McKenna later left undisturbed on appeal. Release of a defendant pending sentencing, as opposed to pending appeal, is covered by §3143(a), a tough standard. The statute states the judge "shall order" a person be detained unless the judge finds by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any person or the community if released under §3142(b) or (c). These subsections lay out the standard for pretrial release. But if the defendant can make such a showing by clear and convincing evidence, the statute goes on to state that the judge "shall order" release.

Judge Chin's decision's will be reviewed by the Second Circuit under the clear error standard, another difficult hurdle for the defense team. When Mr. Madoff, 70, pleaded guilty last week, Mr. Sorkin tried to argue that other high-profile white-collar defendants have been allowed to stay out of prison post-conviction and pending sentencing. But when Assistant U.S. Attorney Marc Litt rose to give the counter-argument, Judge Chin said he did not need to hear the government's side. "The exposure is great, 150 years in prison," Judge Chin said. "In light of Mr. Madoff's age, he has an incentive to flee, he has the means to flee, and thus, he presents a risk of flight." In their papers, Messrs. Sorkin and Horwitz said Judge Chin "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."

The attorneys cite the Second Circuit case of United States v. Abuhamra, 389 F. 3d 309 (2004). Abuhamra states that if a defendant "can make the required evidentiary showing, the statute establishes a right to liberty that is not simply discretionary but mandatory." The Abuhamra court also notes the language in the statute that the judge "SHALL order the release of the person in accordance with §3142(b) or (c)." The lawyers say Judge Chin applied the wrong standard "because the Bail Reform Act does not require a showing that the defendant does not have an incentive to flee." Until Thursday, Mr. Madoff was out on $10 million bail but was confined to his Park Avenue penthouse, wearing an electronic monitoring bracelet. Initially, the government did not object to Mr. Madoff's bail package, but that changed when Mr. Madoff and his wife, Ruth, mailed $1 million in jewelry and other valuables in late December to family and friends. Mr. Sorkin and Mr. Horwitz claim Mr. Madoff's guilty plea does not change a thing. They remind the circuit that Mr. Madoff "confessed to his sons that he had committed fraud in the amount of $50 billion," and "voluntarily admitted his culpability to the FBI."

"Based on these actions, Mr. Madoff certainly understood that he faced essentially a life sentence at the time he made his confessions," they said. "Finally, that Mr. Madoff has now pled guilty does not alter the factual analysis regarding his risk of flight in any meaningful way," they said. "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 Dec. 11, 2008." Meanwhile, papers released Friday as part of the appeal states that Mr. Madoff has between $823 million and $826 million in assets. The papers, a statement of assets and liabilities assembled for the civil case brought against Mr. Madoff by the Securities and Exchange Commission, show that the bulk of the assets, $700 million, represented the net value of Mr. Madoff's businesses. Among the monthly expenses listed on the documents is $100,000 a month in legal fees. Mark.Hamblett@incisivemedia.com