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It is the end that crown us, not the fight. (Robert Herrick)

Bernie Madoff must be upset. Here he went to the trouble to make sure everyone knows he perpetrated the greatest financial fraud in history, and he doesn’t even come close to the all-time record sentence.

As reported in the Wall Street Journal (29 June, “Madoff’s 150-Year Sentence: Long, But Not Longest”):

Sholam Weiss received an 845 year sentence for a fraud scheme that took $450 million from an insurance company… In 2008, Norman Schmidt was sentenced to serve 330 years in federal prison for his role in a fraudulent ‘high yield investment scheme.’

Weiss’ 845 years, amortized over $450 million, works out to over half a million dollars per year – more than $530,000. At that rate, Madoff’s declared $65 billion fraud should have brought him over 130,000 years in the slammer. Now that’s what we call something to write home about!

Compared to Schmidt and Weiss, Madoff hardly even qualifies for the Hall of Fame. Why did he do it?

What really sparks our interest is: why, when he saw it all crashing around his ears, did Madoff not throw a few hundred million dollars into a duffel bag and travel to some part of the world where they would neither find, nor extradite him?

He is not protecting his family – at least not from legal action. His guilty plea means he will not have to testify, but there will be intense scrutiny on every aspect of his business – and every person involved – as the civil suits start to unfold over what promise to be a chock-full several years.

So we repeat: why did Bernie cop a plea?

One tale making the rounds is that Bernie lost a few hundred million dollars belonging to some high-profile Russian mobsters. We find this believable for several reasons. One is that we have worked on Wall Street long enough to know that there is no type of nasty person who does not have a finger or two in a pie. Typically, the nastier the pie, the nastier the fingers.

It is crystal clear that everyone who understands the markets even a little recognized that Bernie was violating the rules – if not breaking the law. There was no other way he could have delivered steady returns year in, year out. And bad guys like dealing with bad guys – their secrets are safer with someone who has significant secrets of his own to protect.

Another reason – circumstantial, to be sure – is Harry Markopolous’ statement, buried in his now-famous correspondence with the SEC, that he feared for his safety and the safety of his family if his work on Madoff’s dealings became widely known. Another is that we have heard this story from people who invested with Madoff. And don’t forget, the unspoken reason the judge permitted Madoff to show up in court in a suit, instead of his prison jumpsuit, is he was wearing a bulletproof vest and could keepit out of sight under his coat.

Judge Chin’s sentence of 150 years guarantees that Bernie Madoff will die in prison. Now it looks to us like the only question is: how soon?