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New report on timing of Madoff confession

By Diana B. Henriques
New York Times / January 10, 2009
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NEW YORK - Peter B. Madoff, the younger brother and longtime business partner of Bernard L. Madoff, has said that his brother disclosed his huge fraud scheme to him the evening before confessing to his sons, according to people briefed on the chronology of the scandal.

The timing of the confessions raises questions about whether Peter Madoff had an obligation to report his brother's alleged $50 billion Ponzi scheme to federal authorities immediately, as the Madoff sons did when their father informed them the next day, Dec. 10.

Since his arrest on Dec. 11, Madoff has remained free under a $10 million bond signed by his wife and his brother and secured by his wife's residential property in New York City, Long Island, and Florida. Since Dec. 18, he has been confined to his apartment under 24-hour guard.

A federal magistrate has said that he will rule at noon on Monday whether to order Madoff to jail pending a trial on criminal securities fraud charges. Federal prosecutors asked that his bail be revoked after Madoff and his wife mailed about $1 million worth of diamond watches and other jewelry to friends and family members, including his brother, on Dec. 24, despite a freeze on his assets.

John R. Wing, the lawyer for Peter Madoff, declined to answer questions about the timing of Bernard Madoff's disclosures to his brother. Wing has said in recent weeks that Peter Madoff did not know about the fraud beforehand and was cooperating fully with federal investigators.

Ira Lee Sorkin, a lawyer for Bernard Madoff, also refused to comment on the chronology of his client's confession.

Peter Madoff also has been served with a subpoena in a separate investigation by Massachusetts regulators, according to William F. Galvin, the Massachusetts secretary of state. Galvin said investors and institutions in his state had lost hundreds of millions of dollars.

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