Wednesday, December 18, 2013

Peter Madoff Disbarred

The New York Appellate Division for the Second Judicial Department has disbarred Peter Madoff as a result of his criminal conviction:

The respondent admitted that he conspired with others to commit several violations of the law, including attempts to interfere with the administration of internal revenue laws, falsifying books and records of an investment adviser, making false filings with the SEC, and mail fraud and securities fraud. Moreover, the respondent admitted that he conspired with others to prevent the IRS from collecting proper tax revenue—to his and his family's benefit—in three different ways. Specifically, the respondent received benefits from the company by which he was employed, Bernard L. Madoff Investment Securities (hereinafter BLMIS), which he failed to report as income on his tax returns. In addition, the respondent falsely placed his wife on the BLMIS payroll, resulting in her receipt of untaxed 401(k) contributions to which she was not entitled. The respondent admitted that, in 2005, 2007, and 2008, he received gifts from his brother, Bernard Madoff, the principal of BLMIS, which were used to provide the respondent's children with substantial sums of money. The respondent, although not expecting to be repaid by his children, had them execute promissory notes to avoid paying gift taxes. Additionally, the respondent's brother provided him with gifts, which were documented as loans so as to avoid paying gift taxes. The respondent further admitted that,  between 2006 and 2008, he knowingly signed and approved false compliance documentation in connection with BLMIS. The respondent admitted that, at the time he made these statements, he knew that they were false. The respondent also admitted that he conspired with others to falsify employment and payroll records of BLMIS.

Disbarment was automatic because the federal offense has a state felony equivalent. (Mike Frisch)

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Judiciary Law § 90(4)(a) never made any sense to me. An attorney is not actually disbarred until the court enters an order him or her to refrain from practising law. Until then, as a practical matter, the attorney is free to practice. In fact, the only practical affect seems to be the pre-dating of the disbarment. In this case, the First Department ordered that the disbarment was effective 29 June 2012. So Mr. Madoff already has a year and a half head start on the seven year waiting period before he can again seek admission. Was that really what the court intended?


Posted by: Stephen Williams | Dec 18, 2013 2:02:58 PM

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