Page last updated at 20:11 GMT, Monday, 12 January 2009

Madoff able to continue on bail

Bernard Madoff leaves a court in New York (5 January 2009)
Prosecutors had claimed that Mr Madoff was a flight risk

A US judge has rejected demands from prosecutors that Bernard Madoff should be sent to jail while they continue to probe his alleged $50bn (33bn) fraud.

Prosecutors had argued that his bail should be revoked because he violated a court order freezing his assets.

Mr Madoff posted more than $1m-worth of jewellery and valuables to relatives and friends before Christmas.

Mr Madoff's lawyer, Ira Sorkin, said his client had not realised this violated the freezing of his assets.

'Flight risk'

The prosecutor said that a single one of the packages sent in the post was worth more than $1m (685,000).

The items sent included jewellery, watches, pens, cufflinks and a $200 pair of mittens.

Prosecutors said he was a flight risk and had tried to disperse assets that the government might want to pay for investor losses.

Mr Madoff's lawyer said he was not a flight risk because he was under house arrest and 24-hour surveillance.

Mr Madoff, 70, a former chairman of the Nasdaq stock market, was arrested and charged on 11 December for what would be Wall Street's biggest Ponzi scheme, one in which early investors are paid off with the money of new clients.

If convicted, he faces up to 20 years in prison and millions of dollars in fines.

The investment adviser has not appeared in court to formally answer the charge. He appeared in court at an initial hearing after his arrest and again on 5 January when the government demanded his bail be revoked.

The deadline to indict Mr Madoff has been extended to 11 February, meaning that he will remain free for at least another month, provided he does not breach the terms of his bail.

'Thirst for blood'

Fraud experts have said the purported scheme was too complicated and went on too long to have been carried out by Mr Madoff alone.

The investment adviser, who has been a Wall Street figure for more than 40 years, is the only person accused in the scandal surrounding his firm, Bernard L Madoff Investment Securities.

Many investors have been arguing for Mr Madoff to be sent to jail while awaiting trial.

Stephen A Weiss, a lawyer for many of his investors, said some were "very unhappy" with Monday's ruling.

"There is a thirst for blood that transcends just those who have been victimised. There is a feeling... that folks like Bernard Madoff get a different brand of justice than the guy in the street," Mr Weiss said.

The judge said that sound legal considerations must take priority over all decisions, though he acknowledged the huge public interest in the case.

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