On Monday, a judge declined a request by prosecutors to jail Bernard Madoff, saying the former investment adviser who is accused of bilking $50 billion from clients did not pose a flight risk. Prosecutors made the request last week after it was discovered that Madoff had sent over a million dollars in jewelry to relatives in the past few weeks. Investigators also revealed that Madoff had $173 million in signed checks sitting in his office drawer at the time of his arrest. Prosecutors say they will appeal the ruling.
Anthony Barkow is the executive director of New York University Law School's Center on the Administration of Criminal Law. Before that he spent 12 years as a federal prosecutor, first in Washington and then in the U.S. attorney's office in Manhattan, which is handling the Madoff case. TIME's Stephen Gandel asked Barkow about Monday's ruling and why most white-collar criminals get to stay out of prison on bail while other accused people are often sent right to the slammer. (See the top 10 scandals of 2008.)
Were you surprised by the ruling?
Slightly. The government had brought to the attention of the judge direct disobeyance of a court order, albeit in a related civil case, and that to me is convincing evidence that the defendant poses a serious risk of flight. If I was the judge, I think I would have detained him.
Why do you think the judge decided to allow Madoff to remain out on bail?
Because the conditions already imposed on Madoff are quite stringent. He is on a 24-hour house arrest with an electronic bracelet and round-the-clock monitoring of his building by a security firm. That's as strict as you can get without detention. Also, the terms of the bail in the civil case, not the criminal case, prohibited Madoff from moving assets. Monday's bail hearing pertained to the criminal case.
Why would prosecutors be so worried about Madoff shipping jewelry to relatives?
There are several reasons. One could be because he is hiding assets, so he can flee and live off them. Even though the million dollars or so in jewelry is a drop in the bucket compared to what he defrauded victims of, it is enough money to live off when you are on the lam. The second reason would be that he could be shipping assets around to avoid paying restitution later. Third, the things we've just talked about show that he is someone who would disobey court orders and may not show again.
Originally, the prosecution agreed to bail. Do you think the prosecution would have had an easier time getting him jailed now if they had asked for it originally?
Yes, the judge actually used the government's earlier position against it in the opinion.
So was that a mistake by the prosecutors?
The question now is not how badly he should be punished. It is what is going to make him reappear in court. I think it was reasonable for the government to originally say, With these conditions we think he will reappear. It was reasonable to reconsider that when he disobeyed the SEC order. And it was reasonable of the judge to say I'm still confident he will show up.
Do you think it hurts the prosecutors' case that Madoff was charged with this massive crime, and then the next few days he was seen walking around smiling?
I don't think it hurts the government in court, but I think it definitely inflamed public opinion. That led to an outcry that he should have been jailed in the first place and some media disagreement with the government's opinion not to seek detention in the first place.
Did that play into the government's decision to come back to the judge and ask for Madoff to be jailed?
I don't think so. I know the prosecutors who made these decisions, and they are straight shooters who are not influenced by public opinion. I think they made a reasonable calculation the first time, and I think Madoff's flagrant disobeyance is good grounds to rethink that.
When it comes to bail vs. immediately putting a person behind bars, are white-collar criminals treated differently from perpetrators of other crimes?
Yes. Most usually stay out on bail. Something like three-quarters of white-collar defendants, according to Department of Justice statistics, stay out on bail, compared to about half for other crimes.
Part of the reason is that in fraud cases, the presumption of the law is in favor of release. When it comes to violent crimes, it is in favor of detention. But there is also just the lens through which society views wealthy people, and the reality that wealthy people have deeper ties to the community. They also have the ability to tap into more resources, like perhaps better representation. So there are legal differences and real-world, practical differences between the situations of white-collar defendants and street criminals, and the statistics reflect that.
Last summer, a judge sent the former mayor of Detroit, Kwame Kilpatrick, to jail for violating his bail. How was that case different from Madoff's?
In that case, Kilpatrick traveled to Canada. International travel is about the most threatening thing a defendant can do to raise a judge's inference that he is a risk for flight. So that really raised the radar of the judge. What's more, Kilpatrick got the order not to travel out of the Detroit area in his criminal case. In this case, the order that Madoff was accused of violating was in his civil case, not his criminal case, and what he did was ship assets, which is not as threatening an act when it comes to flight risk.
What's the next stage in the Madoff case? What should we be watching?
To me, the most interesting question is who else, if anyone, is going to be charged.
And prosecutors just delayed for a couple more weeks bringing the Madoff case to a grand jury.
They undoubtedly are looking into other people, and I'm sure they are planning to use their extra time to investigate others connected to Madoff and the fraud.