As everyone knows by now, Bernie Madoff is not like the rest of us.  He was fabulously wealth as a result of running a fund that managed money for the biggest, wealthiest names around.  He’s accused of running a Ponzi scheme involving more money than constitutes the GNP of many smallish nations.  And he remains free on $10 million bond despite having $173 million in checks in his desk draw made out to his close friends and relatives.  Not too many defendants can say that.

Over coffee the other morning at Cardozo Law School, where the ITAP program was in full swing, judges and top trials lawyers from around the country talked about Bernie.  The judges were curious.  The lawyers were jealous.  This was the case to have, and since we were all sitting around drinking coffee, it meant that we didn’t have it.  But that didn’t stop us from talking. As if anything could.

The question began with how Bernie, given numbers so far off the chart that framing a sentence will require a flight of fantasy, made it out the door on $10 million bail in the first place.  Magistrate Ronald Ellis set the original number, and it seemed a shocking number indeed.  But as was noted, the initial sense was that Bernie was “cooperating”, and the implicit assumption was that Bernie’s cooperation would garner enough good will to buy him bond.  Mind you, for most people, $10M security would seem a high price.  Bernie paid it from his hip pocket.  He didn’t even need to dig into his crocodile wallet to cover the nut.

The argument against allowing a defendant to be free on bond tends to be a one-shot deal.  Once out, a defendant by his conduct either shows that the Magistrate made the right decision or not.  In other words, if the defendant hasn’t absconded or sold a kilo to pay his lawyer, he’s golden.  Of course, Bernie didn’t have to sell much of anything to pay for Ira Lee Sorkin, a one-man franchise in financial crimes defense, though his absconding seemed to be an eminent possibility given his age, wealth and likely disinclination to spend his golden years in Club Fed.  And golden they are.

Having set bond at $10 million, the question now changed, putting Mag. Ellis in a difficult position.  Bernie sent care packages to some relatives (who immediately ratted him out in what some suspect was a devious plot to create separation between Bernie and his family and keep them as far from this case as possible), and the government was pissed.  They demanded that Bernie be detained, claiming that this constituted “financial harm” to the community by deliberately dissipating his assets, contrary to court order.  Frankly, the million in trinkets is the least of the government’s problems if they are worried about having something left over for restitution, as the cost of dealing with this case will dwarf that amount many times over.

To credit the government, the argument that Bernie had caused “financial harm” is an imaginative effort, reflecting their need to find some way to undo the soft bond originally imposed when they believed Bernie was coming in from the cold.  The government was trying to right its own wrong.  Many around the coffee table at Cardozo thought that there would be far too much pressure to up the bond, given the publicity and scope of harm, and that this wedge, though questionable, was sufficiently sound to justify detention.

There was also significant doubt that the government’s allegations would turn out to be accurate.  No one was comfortable with the notion that a Ponzi scheme went on for 40 years, as they must, by definition, collapse under their own weight.  It smelled more likely that this was a fund gone bad in a problematic economy, and a manager with too much pride and hubris to admit it.  Only then, in an effort to bulldoze his way through the bad times, did he play too fast and loose, hoping that his force of will would somehow make the fund viable again before anyone found out.  It just didn’t happen that way.

To this end, perhaps Charles Green’s allegorical references (via What About Clients?) to good men gone bad explains the Bernie Madoff’s descent into corruption.  It doesn’t absolve Bernie, but it explains the path taken better than the simplistic belief that he was just a crook who got away with it for decades.  This cautionary approach is far more helpful than one that just separates the world into good and evil people, since most of us have the potential for both swimming around in our heads.  Had circumstances been different, perhaps statues would have been erected to Bernie’s memory one day for all the good he did for others.  That’s the way it happens.

To his enormous credit, Magistrate Ellis did not take the easy path of folding in the face of enormous government and public pressure.  He applied the law, concluding that there were conditions that could be imposed to maintain Bernie’s liberty while protecting the only two public interests involved.  And he imposed those conditions.  This decision is unpopular, and absolutely correct.

I still wonder why Bernie would want to stick around, since the odds are incredibly high that he will die in prison.  Certainly not the end one would expect for a Master of the Universe, and Bernie was a Master of all Masters.  Of course, it would awfully hard for Bernie to slip away unnoticed at this point, making flight rather difficult.  It used to be wonderful to be Bernie Madoff, because Bernie Madoff wasn’t like the rest of us.  He’s still not.

Magistrate Ellis stayed his order for two days to give the government an opportunity to take their position to the district judge.