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Peter Madoff will serve 10 years in prison for his role in his older brother's multibillion-dollar Ponzi scheme, a U.S. judge said on Thursday.
Peter Madoff, 67, pleaded guilty in June to criminal charges including conspiracy to commit securities fraud for falsifying the books and records of the investment advisory company founded by his brother, Bernard Madoff.
He agreed at the time not to oppose a request by prosecutors for a maximum 10-year prison sentence and agreed to an order requiring him to forfeit a symbolic $143.1 billion. U.S. District Court Judge Laura Taylor Swain approved the sentence on Thursday.
"I am deeply ashamed of my conduct," Peter Madoff said at the sentencing. "I accept full responsibility for my actions."
The sentencing comes four years and a week after Bernard Madoff first revealed his epic fraud, which occurred over several decades as the former NASDAQ chairman built a reputation for delivering unparalleled investment results, even in bad times. The revelation came only days after the business sent out statements that made investors think their investments had grown to a total of more than $65 billion.
Customers lost about $20 billion, according to the trustee charged with recovering money for the victims.
Of 13 individuals charged criminally in connection with the fraud, Peter Madoff is the only one, other than his brother, who was a member of the Madoff family. Bernard Madoff, 74, was sentenced in 2009 to a 150-year prison term and was ordered to forfeit $170.8 billion.
Peter Madoff, a lawyer, had been chief compliance officer and a senior managing director at the firm, Bernard L. Madoff Investment Securities.
Prosecutors say Peter Madoff helped create false and misleading documents designed to make it appear that the firm had an effective compliance program. If the firm had such a program, prosecutors said it would have shown that no real trades were taking place.
Peter Madoff also transferred millions of dollars within the Madoff family to avoid tax payments to the Internal Revenue Service and also put his wife on the firm's payroll in a no-show job.
Peter Madoff said at his plea that he had no idea his brother was running a massive Ponzi scheme, paying off longtime investors at times with money from newer investors.
"My family was torn apart as a result of my brother's atrocious conduct," he said. "I was reviled by strangers as well as friends who assumed that I knew about the Ponzi scheme."
The judge said she did not believe Peter Madoff's claim that he knew nothing about his brother's fraud, calling it "frankly not believable," and urged him to tell the truth, even after sentencing.
But he conceded that he followed his brother's instructions and helped him decide which favored friends, clients and family members would receive the $300 million that remained in the company's accounts. The checks were never sent.
Peter Madoff, who joined his brother's firm after graduating from Fordham Law School in 1970, has been free on $5 million bail after he agreed to surrender all of his assets.
Prior to sentencing, his lawyer, John Wing, said in a memorandum that Peter Madoff will "almost certainly live out his remaining days as a jobless pariah, in or out of prison." He called him a victim of his loyalty to his brother, saying he had been mistreated by the sibling who was eight years older and was viewed as "the prince" by his mother.
As part of a forfeiture agreement, Madoff's wife, Marion, and daughter Shana must forfeit nearly all of their assets. The government said those assets and assets that will be forfeited by other family members include several homes, a Ferrari and more than $10 million in cash and securities. It said his wife will be left with $771,733. Besides the Madoff brothers, no other family members have been arrested.
Though Peter Madoff had been the firm's chief compliance officer for nearly four decades, the government marked his start in the conspiracy as 1996, when he created false and misleading compliance documents and false reports for the Securities and Exchange Commission.
The crime worsened after August 2006, when the business was registered with the SEC as an investment adviser, requiring annual filings to guide the SEC's examination programs. Prosecutors say Peter Madoff made "numerous false statements" to create the false appearance that the business represented a small number of highly sophisticated clients.
Since the fraud was revealed, a court-appointed trustee has reached agreements to recover approximately $9.3 billion and is hoping to recover another $3 billion over the next 18 months. About $3 billion has been approved for redistribution to victims through an ongoing claims process.
Five others face trial next year, including Bernard Madoff's longtime secretary. All have pleaded not guilty.
Information from Reuters and the Associated Press was included in this report.