Defending the indefensible

By Legal Eagle

One of the things which often concerns people about lawyers as a species is that we will defend a person even when we do not personally agree with what that person has done. As I’ve explained in my post entitled “The Mad, the Bad and the Sad“, I went through a stage where I frequently had to defend my profession against taxi drivers. Finally, I refused to admit what my profession was; I was bored of having that same conversation over and over again.

I’ve acted in cases where I have not been comfortable with my client’s position from a personal perspective. If I were just an ordinary member of the public, I know how I’d feel about my client – but I was not – I was being paid to represent him or her, and thus I had to do the best goddamn job I could.

Spare a thought for Bernie Madoff’s defence lawyer, Ira Sorkin. I’ve written on Madoff’s failed Ponzi investment scheme, noting the restitutionary and equitable claims which may arise from it.

Madoff was described by one investor in New York as “totally respected. He was a heymishe [friendly] Jewish guy.” His clients included many wealthy Jewish individuals and charities. This kind of scheme is described by the US Securities and Exchange Commission as an “affinity scheme”, where the fraudster exploits the trust and affinity that exists in groups of people with something in common (such as religion, ethnicity, occupation, age etc). As Madoff apparently did in this case, the fraudster often enlists respected leaders from within the community to tell others about the scheme, convincing the leaders in the process that the scheme is worthwhile and legitimate. These leaders not only convince others to join, but often fall victim to the scam themselves. I explain this background to give some context to what comes next.

The New York Times reports today that Ira Sorkin recently received an e-mail which read:

“As one Jew to another, I deeply regret that the Sorkin family did not perish in the Nazi death camps.”

Now that’s about one zillion times worse than having to explain yourself to 20 taxi drivers. Sorkin has apparently received reams of threatening e-mails and letters, including one so serious that he had to contact the FBI.

Madoff was charged with 11 offences (DOJ criminal information sheet detailing charges here). He faces up to 150 years in gaol if found guilty.

Sorkin indicated yesterday at a court hearing that his client would plead guilty to all 11 charges, including securities fraud and money laundering. It will be interesting to see if the court will accept this.

Sorkin’s final comments to the New York Times were that:

…he understood the anger and grief of Mr. Madoff’s former customers, but “to preserve a system that can protect the people who didn’t do bad things, you have to represent people who did do bad things…That’s the role we play.”


Madoff has pleaded guilty to all charges, as adverted to by Sorkin on Tuesday. His bail has been revoked while he awaits sentencing.

As I speculated in my earlier post, he says he started paying people out of investor’s funds as a temporary measure:

In recounting how he began the fraud, whose collapse erased as much as $65 billion that his customers thought they had in their accounts, Mr. Madoff said: “I believed it would end shortly and I would be able to extricate myself and my clients from the scheme. However, this proved difficult, and ultimately impossible.”

He continued, stumbling slightly over the word order in his prepared remarks, “As the years went by I realized this day, and my arrest, would inevitably come.”

Mr. Madoff acknowledged that he had “deeply hurt many, many people, including the members of my family, my closest friends, business associates and the thousands of clients who gave me their money,” adding, “I cannot adequately express how sorry I am for what I have done.”

Although Mr. Madoff admitted to operating what he called “a Ponzi scheme through the investment advisory side of my business,” he insisted that the other businesses that his stock-trading firm conducted, managed by his brother and his sons, “were legitimate, profitable and successful in all respects.”

Madoff’s firm has only a small fraction of the investments he purportedly held for investors, and investigators are wondering where the money has gone. I suspect it has gone into the hands of other investors who thought they were receiving legitimate “returns”, and that there will be a slew of cases where investors who have lost all attempt to trace their assets into the hands of other investors.


  1. Posted March 11, 2009 at 10:01 pm | Permalink

    SL says … Madoff’s “clients included many wealthy Jewish individuals and charities”

    Hah! Kinda confounds the stereotype of Jews as canny investors.

    SL also said: “(Madoff) would plead guilty to all 11 charges…It will be interesting to see if the court will accept this.”
    What?? A court wouldn’t accept a guilty plea to all charges? I don’t understand. Might it be because other charges are “in the works” that might be stymied by the quick conclusion of the current case? Can you expand on your statement so I feel less of an idiot?

  2. Posted March 12, 2009 at 4:43 am | Permalink

    Hoooboy, must admit reading that comment led to a very sharp intake of breath…

    Dave: there’s probably still a fair bit of horse-trading to go in the plea-bargaining stakes (v. important in the USA). It may be that the court holds that it is in the public interest that the matter goes to trial. This may be partly for reasons of edification, or so that all the relevant evidence is made public. I understand that there are still some doubts about whether Madoff could have managed such a colossal Ponzi scheme all on his lonesome.

  3. Posted March 12, 2009 at 1:59 pm | Permalink

    Ah yes. Something I have to deal with more than I would like to. My partner works for a trade union, but my firm acts for some large corporates including in relation to some employment and workplace safety issues. I do my damndest to avoid those matters (I mostly work in IP and commercial disputes, rather than IR), but sometimes it is not possible.

    I don’t know how many times I’ve had the “everyone deserves legal representation” argument. I would feel better about it if I wasn’t well aware that many people cannot afford anything even close to serious representation, and that legal fees are in reality a huge barrier to asserting rights for anyone who isn’t wealthy or a medium-to-large corporation. Sigh.

  4. Boris
    Posted March 13, 2009 at 11:49 pm | Permalink

    ” I couldn’t quite believe that e-mail, but obviously there are some very, very hurt people out there.”

    The email is shocking. But hey he doesn’t do this job for nothing. And his defence, in NYtimes, sounds a bit ambigous, when he says ‘I do not lean to the other side’. If he knew the scheme was illegal, he deserves jail rather than emails…

    Some investors have committed suicide. It is a lot worse than threatening emails.

  5. Boris
    Posted March 13, 2009 at 11:50 pm | Permalink

    It is hard to believe Madoff’s lawyer knew nothing.

  6. Posted March 14, 2009 at 8:11 am | Permalink

    Every fraud like this starts with a “temporary” borrowing of client funds that never, ever get repaid…and on it goes until it bursts.

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