Madoff to Remain Free, Judge Rules

[Nostalgia]

A federal judge today denied prosecutors' request to jail money manager Bernard Madoff for allegedly violating a court order by mailing more than $1 million worth of valuables to friends and family.

Instead, the judge ruled that Mr. Madoff, who is accused of running a giant Ponzi scheme that lost billions of dollars of investor funds, can remain free but must give the government an inventory of his transportable valuables. A private security company will regularly check that the items are still in his possession.

Today's decision by U.S. Magistrate Judge Ronald Ellis came after Mr. Madoff and his wife Ruth mailed valuables including diamond watches to friends and family in late December. Mr. Madoff, founder of Bernard L. Madoff Investment Securities LLC, consented to a preliminary injunction and asset freeze in a civil-fraud case brought by the Securities and Exchange Commission. Prosecutors argued that the mailings were a violation of a court order freezing his assets last month.

The decision to allow Mr. Madoff to stay in his Upper East Side penthouse pending trial or a plea will disappoint thousands of investors who say they trusted Mr. Madoff with some, and in some cases, all of their savings only to learn that they've been wiped out in Mr. Madoff's alleged fraud.

However, his attorneys had argued to the judge that the mailings were "innocent" and that Mr. Madoff did not pose a flight risk or a danger to the community, the typical reasons for revoking bail.

"The decision speaks for itself and we intend to comply with the judge's order," said Ike Sorkin, a lawyer for Mr. Madoff.

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