When it was announced that Bernie Madoff agreed to prosecution by information rather than indictment, the message was clear:  A deal has been cut.  This must have been the easiest $10 million Ira Lee Sorkin ever earned (did I get the number right, Ira?).  But the question remains, if you represented Madoff, what would make for an acceptable plea?

Thinking as hard as I can given the fact that Bernie didn’t have the good sense to put me on his defense team, I can think of three primary goals that Sorkin might have considered in working out a deal:

1. Get Bernie out of prison before he dies
   
2. Keep Bernie’s wife Ruth and kids from being prosecuted
   
3. Leave Ruth and the kids with some loot so they don’t go hungry

Aside from these three goals, there isn’t much more that one could conceivably expect to get out of the government under the circumstances.  It’s not like the feds would go for a proposal to make Bernie the Treasury Secretary to fix the economy and generate enough cashola to pay back all his very close friends.

Playing Saturday morning speculation, let’s consider the chances that Sorkin was able to earn his keep.

Get Bernie out of prison before he dies

Madoff, at 71, is no spring chicken, and even if the deal is to a single count of securities fraud, it carries a maximum penalty of 20 years in prison and a $5 million fine.  While it’s possible that Bernie could outlive expectations (since only the good die young), chances aren’t great that he’s going to reach his 92nd birthday.  So could Sorkin have gotten him a deal that would provide a guidelines sentence that would get him out in less than 20?  After all, he’s a criminal history level 1, right?

Here’s the thing: If ever there was an individual who exemplified the person who should get the maximum sentence allowed by Congress, isn’t it Bernie?  Whether the total loss is $50 billion or a mere $20, as has been suggested, it’s still off the charts.  At what point does the max mean anything if it isn’t used when the single biggest securities fraud ever doesn’t deserve it?

From a general deterrence point of view, how many people would consider a $20 billion fraud if it only costs them 10 or 15 years?  Hey, people do that much time for an awful lot less, so the only lesson is to do it earlier in life so you have enough time to enjoy the south of France in your twilight years.

Still, a plea is a plea, and the routine is to cut some time off the top to make the deal work.  So I would expect the deal to include something shy of the maximum, maybe 3 to 5 years less, with the government betting that the food at Club Fed won’t agree with Bernie’s refined tastes, thus trying to get the time back by shortening his lifespan. 

Keep Bernie’s wife Ruth and kids from being prosecuted

Blood is thicker than water, and even though Bernie showed no reluctance in burning his own as he screwed philanthropies right and left, the love of one’s family is a bond far stronger than any other.  Given that Bernie has been the lightning rod for his massive fraud, the victims might be willing to overlook the ongoing questions swirling around Ruth and the boys, Mark and Andrew, or even his extended family, his brother Peter, his nephew Charles, his niece Shana, all of whom were feeding at the trough.

It’s inconceivable that none of the family knew that this scheme was going on, if the allegations are true, given their roles in compliance and trading.  This is why rumors circulated when they snitched on Bernie for shipping off the family jewels, so that they could manufacture distance from the scheme and try to create some plausible deniability.

It’s hardly uncommon for the government to focus on the central figure in cases and let family members, despite obvious culpability, off the hook on the theory that they were just going along for the ride.  After all, absent the motivating force, in this case Bernie, would they have engaged in this massive fraud?  Mostly likely not, and hence they bear some reduced sense of culpability.

My bet is that the family gets a walk while Bernie takes the weight.  As long as they have a Saddam of Fraud, the townsfolk will be pacified and the deal can be cut.  We are, if nothing else, all about putting a face on crime, and Bernie’s alone works just fine.

Leave Ruth and the kids with some loot so they don’t go hungry

This is something of a corollary to the second goal, since there isn’t much point to solvency if they’re all sharing the family sized cell.  But no one really believes that either the government or the lawyers feeding off the victims will ever unearth all the assets that the Madoff’s squirreled away for a rainy day.  On the other hand, it isn’t easy going from having billions in the bank to mere millions.  How is one expected to live on so little?

This is likely to be one of the most difficult aspects of the plea negotiations, as Judge Denny Chin is required to order restitution to the victims, and any effort by the government to allow the Madoffs to protects assets to some degree could spark armed insurrection.  As hurt as the victims are, only cash will sooth the pain.  After all, this was all about money from the start.

It’s hard to fathom how the government could justify a plea that allows Ruth to keep the apartment and her $62 million in mad money.  I bet that most of us could live quite well off a tag sale of the clothing in her closet, not to mention the rugs on her floor.  But while the government may be hard pressed to concede any financial security to the Madoff kinfolk, chances are awfully good that they will be quietly left with sufficient wherewithal to make sure that Ruth and the kids are able to buy their next tin of Osetra.

But what about the victims?

The New York Times article provides a glimpse as to the government’s concern for the victims of the Madoff scheme.

Marc Litt, an assistant United States attorney, proposed that victims be kept informed about pending hearings — including the one on Thursday — through notices posted on the United States attorney’s office Web site. Links to that information would also be provided on a Web site maintained by the court-appointed trustee handling victim claims.

Judge Denny Chin of Federal District Court in Manhattan approved the proposal, specifying that “any potential victim who wishes to be heard” must send an e-mail request to the prosecutor’s office by 10 a.m. Wednesday. “The court will rule on whether, and the manner in which, victims may be heard at the proceeding,” Judge Chin noted in his order.

What’s notable about this is where the victims fit in before the deal was cut, and whether the victims (or lawyers for the victims) were on board with the government’s plan.  When there are as many victims, and victims as angry, as here, it’s almost impossible to create a consensus.  No matter what you come up with, it won’t be enough for some.  Of course, this may be very much the case, and the victims who oppose a deal may well have a point.  Why cut any deal with Madoff?  Why give him anything?  Why note indict, try and nail him (and everyone who enjoyed the benefit of his scheme) to the wall?  It’s a very good question.

If ever there was a case that called for full exposure, not merely for its catharsis and lesson, but because the perpetrator is undeserving of any concession, this could be it. 

But there’s one nagging question that bothers me.  Where are the victims’ rights advocates on this one?  Not a peep out of Volokh Conspirator  Paul Cassell.  This is the motherlode of victims, and there’s not the slightest doubt that they are indeed victims, and yet none of our Patron Saints of Victimhood has questioned whether the government has adequately complied with the CVRA or shown adequate deference and concern for the thousands who have been wiped out by the scheme?

Not that the government’s deal binds Judge Chin’s hands, which Sorkin I’m sure knows all too well, leaving quite a bit up in the air when it comes time to look Bernie Madoff in the eye and ask how anyone could hurt so many people, so many causes, so many of his own.  But if ever there was a time for the victims’ rights forces to gear up for battle, this would be it.

Update:  More on Madoff from the victim’s perspective from ABC News via Doug Berman.

Madoff’s investors are not happy to hear the he may cut a deal. 92-year old Zsa Zsa Gabor is one of them. Her husband Prince Frederick Von Anhalt said the couple lost their $10 million life savings to Madoff.

“It’s not enough” for Madoff to just plead guilty and go to jail, Von Anhalt told ABC News. “That’s what he wants, he wants to go to jail, his life is over. He wants to protect his family, his wife, his children.” Von Anhalt also wants to see Madoff’s wife, Ruth, and his sons arrested and put in jail. “What nerve she has, to say that she wants to keep all that money. That’s our money! Screw her!”

What?  You thought princes were more dignified when their money is stolen?