Peter Madoff, Guilty, Blames It on Bernard

MANHATTAN (CN) - Blaming his older brother Bernard, Peter Madoff pleaded guilty Friday to conspiring to commit securities fraud and falsifying records, charges expected to send him to prison for 10 years and cost him everything he has.

Peter Madoff, 66, pleaded guilty to both counts in a criminal information, though he said he was unaware his big brother, 74, was running the world's biggest Ponzi scheme until Bernard admitted it in December 2008.

Bernard is serving 150 years in prison.

"My brother was seven years older than I am, and I always looked up to him," Peter Madoff told the court. "I revered him and trusted him completely."

Peter, 66, worked for 38 years at Bernard L. Madoff Investment Services, including as chief compliance officer and senior managing director.

He admitted he lied to investors and to the SEC about his compliance reports.

At his plea hearing, prosecutors portrayed Peter as incompetent, but not innocent. Assistant U.S. Attorney Lisa Baroni claimed that Pater Madoff used different color pens while filling out stacks of compliance reports to make it appear as though he wrote them at different times.

Peter Madoff insisted he did not know about the full details of the fraud.

"I was shocked and devastated, but I did what my brother said," until Bernard 'fessed up in December 2008, Peter said.

"The next day, I took out $100,000 in charitable contributions."

Peter Madoff also admitted he failed to disclose his "fringe benefits" to the IRS.

He admitted that he received about $15.7 million in sham loans, gave $9.9 million in sham loans to family members, did not pay taxes on $7.75 million, made $16.8 million on two sham trades and charged $175,000 in personal expenses to corporate accounts.

His voice quaked toward the end of his prepared remarks, as he said, "I am deeply ashamed of my acts."

Peter Madoff must forfeit more than $143.1 million and faces up to 10 years in prison at his Oct. 4 sentencing.

He is free on $5 million bond until then.

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