Page last updated at 09:03 GMT, Wednesday, 21 October 2009 10:03 UK

Madoff adjusts to life in prison

Court sketch of Madoff and Judge Denny Chin
Madoff was sentenced to 150 years in jail in June

Sharing a prison cell with a drug dealer. Hanging out with mafia bosses, Israeli spies and sex offenders.

Life is very different for disgraced US financier Bernard Madoff, who was convicted of a $65bn (£40bn) fraud.

That is according to a lawyer who interviewed Madoff in federal prison for a lawsuit filed by victims trying to get their money back.

Madoff was given the maximum prison sentence of 150 years for masterminding the huge Ponzi scheme.

New life

Lawyer Joseph Cotchett wrote that Madoff, who previously owned a $7m Manhattan penthouse, now spends his leisure time "walking around the prison track at night".

The 71-year-old Madoff is now held in the Butner federal correctional facility in North Carolina.

He shares a cell with a 21-year-old man convicted of drugs crimes, and sleeps in the lower bunk, according to Mr Cotchett.

Madoff eats pizza made by a convicted child molester. "Most of his fellow inmates are in prison for drug crimes or sex crimes and Madoff will spend the rest of his life in prison with them," Mr Cotchett wrote.

Madoff shares the prison with mafia boss Carmine Persico and Jonathan Pollard, given a life sentence in 1987 for spying on behalf of Israel.

Ira Sorkin, Madoff's lawyer, declined to discuss his life in prison.

Glamorous past

Madoff started his financial career aged 22 with $5,000 from money made from summer holiday jobs such as working as a garden sprinkler installer in New York.

WHAT IS A PONZI SCHEME?
A fraudulent investment scheme paying investors from money paid in by other investors rather than real profits
Named after Charles Ponzi who notoriously used the technique in the United States in the 1920s
Differs from pyramid selling in that individuals all tend to invest with the same person

He then set up Bernard L Madoff Investment Securities in 1960.

His firm became one of the largest market-makers - matching buyers and sellers of stocks - and Madoff served as chairman of the Nasdaq stock exchange.

In addition to his New York flat, Madoff owned an $11m residence in Palm Beach, Florida and a property worth $3m on New York's Long Island.

Madoff's firm was investigated eight times by the US Securities and Exchange Commission over the past 16 years, because it made exceptional returns.

The SEC admitted last month that it had failed in its "fundamental mission to protect investors".

But in the end, it was the global recession which effectively prompted Madoff's demise.

Investors, hit by the downturn, tried to withdraw about $7bn from his funds and he could not find the money to cover it.

Madoff is biggest self-confessed fraudster in US history.



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