If he knocked off a McDonalds for $50 and a bag of fries he'd be in jail.While Bernard Madoff is trying to cut a deal with U.S. prosecutors, criminal investigations are heating up in connection with the so-called feeder funds that invested with the accused Ponzi scheme mastermind.
The U.S. Attorney's office confirmed Tuesday to FOX Business Network that discussions have taken place with Madoff's attorneys "concerning a possible disposition of this case."
That undoubtedly means Madoff is negotiating to tell everything and cooperate fully in exchange for a lighter sentence, a common tactic in potentially long, complicated and expensive cases. Madoff's attorney, Ira Sorkin, couldn't immediately be reached for comment.
Meanwhile, Spanish prosecutors are probing the relationship between Madoff and Europe's second largest bank, Banco Santander, according to the Wall Street Journal. Santander lost more than $3.1 billion for its clients who had invested with Madoff through investments operated by the European banking giant. Santander lost a fraction of that amount.
Legal experts say the investigation by Spanish prosecutors is likely the first of many such probes into how much these feeder funds knew about Madoff's operations and when they became aware that something was drastically wrong.
The Wall Street Journal said Spain's anticorruption prosecutor would examine the relationship between Santander, Fairfield Greenwich Group, and the Madoff funds, citing the prosecutor's office. Fairfield Greenwich Group is an investment fund, whose clients stand to lose $7.5 billion in the alleged $50 billion Ponzi scheme.
According to the Journal, investigators are looking into why Santander Chairman Emilio Botin sent his head of risk management operations to visit Madoff weeks before the scheme fell apart. Investigators are also looking into whether several people who managed money at Santander funds were aware of problems at the Madoff funds.
Santander could not be immediately reached for comment.
Madoff remained holed up in his $7 million Manhattan penthouse Tuesday, a day after U.S. Magistrate Judge Ronald Ellis refused to revoke his bail. Ellis ruled that prosecutors had failed to convince him that Madoff represented either a flight risk or a danger to society.
Madoff, 70, was arrested on Dec. 11 and charged with one count of securities fraud. He is accused of bilking investors, many of them Jewish charities, of possibly tens of billion of dollars by using money from new investors to pay off old investors, a classic Ponzi scheme.
Prosecutors sought to have Madoff jailed last week after the disgraced financier mailed expensive jewelry and other items reportedly worth more than $1 million to family members around Christmastime. But, according to the judge, the government failed to prove the crux of their case: that no set of bail conditions could ensure both that Madoff would appear in court and also keep the community safe.
Ellis added further restrictions to Madoff's bail, however, including a requirement that Madoff itemize every piece of personal property in his Upper East Side apartment and provide that list to the court. A private security firm will check the items every two weeks, and also search Madoff's outgoing mail.