Judge allows Bernard Madoff to remain free

In a decision that is sure to anger more then a few investors, A judge allowed disgraced money manager Bernard Madoff to remain free on bail Monday, rejecting an attempt by prosecutors to send him to jail for mailing more than $1 million in jewelry to family and friends over the holidays.
Prosecutors had said the gifts were grounds to have his bail revoked because what's left of Madoff's assets will have to be returned to his burned investors.

But the judge could not swayed by their arguments that Madoff represents an economic danger to the community because of the size of the fraud and his actions in sending the gifts.

Judges in bail decisions normally consider two main factors:

- whether the defendant is a flight risk or
- a danger to the community.

"The government fails to provide sufficient evidence that any potential future dissemination of Madoff's assets would rise to the level of an economic harm," Magistrate Judge Ronald L. Ellis wrote.

The anxiously awaited decision does put more restrictions on Madoff, including a restriction stating that Madoff compile an inventory of all "valuable portable items" in his Manhattan home. The judge required that prosecutors employ a security company to check the inventory every two weeks and to inspect outgoing mail.

Defense lawyer Ira Sorkin says the "the opinion speaks for itself and we intend to comply with the judge's order." Sorkin has said the gifts were an innocent mistake and said he is neither a danger to the community nor a threat to flee.

Authorities say Madoff has described his activities as a $50 billion Ponzi scheme.

Madoff has been under house arrest since posting $10 million bail against his $7 million Manhattan apartment, where he lives with his wife, and his residence in France.

Prosecutors have been trying to put Bernard Madoff behind bars since last week. That's when the U.S. Department of Justice filed documents to Ellis accusing Madoff of shipping five packages containing more than $1 million worth of diamond-studded jewelry to family and friends, in violation of bail.

Prosecutors said last Wednesday that Madoff was trying to protect these assets - which included 15 watches, four brooches, necklaces and rings - from seizure, preventing alleged victims from recovering their losses.

But Madoff's defense attorney, Ira Lee Sorkin, said Madoff didn't know he violated bail when he mailed these "sentimental" items, and that some of the packages were actually sent by his wife.

Prosecutors on Thursday urged the judge once again to revoke bail, accusing Madoff of planning to transfer up to $300 million worth of assets - including 100 signed and ready-to-send checks found in his office, totaling $173 million.

He was arrested in December and charged with one count of securities fraud for allegedly stealing up to $50 billion from investors. If convicted, the 70-year-old could face up to 20 years in prison and a $5 million fine.

Madoff's alleged scheme disrupted what was an already fragile financial system, affecting hedge funds and well-heeled investors from Wall Street, Palm Beach, Fla., and Europe. Alleged victims included Banco Santander (STD) in Spain and HSBC (HBC) in Britain, as well as director Steven Spielberg and actor Kevin Bacon.

In a Ponzi scheme, money from new investors is used to pay off early investors to create the appearance of legitimate returns.