NEW YORK — Bernard Madoff returned to court in a bulletproof vest Wednesday and won another round in his fight to stay out of jail. But a larger issue loomed over the court: negotiations for a potential plea deal. Bail fights such as this usually carry motivations that are never stated on the court record, and the securities fraud case against Madoff appears laden with them.
Experts say prosecutors may want him in jail to increase pressure on him to cooperate or to reach a plea deal more quickly. Or they might want to punish him for not cooperating enough, while yielding to public pressure to make an example out of Madoff during the nation's economic troubles.
"Like any defendant, a person who is already in (prison) has much greater incentive to resolve it than someone on release who is looking at a significant term if convicted," said Michael Garcia, the U.S. Attorney in Manhattan until days before Madoff's arrest.
Madoff has become one of the most vilified men in America since he confessed to stealing $50 billion last month in what may be the largest Ponzi scheme ever. The scandal has touched every corner of the world, wiping out life fortunes, decimating charities and apparently pushing one investor to commit suicide.
Investors are furious that he has been allowed to remain on free on bail while being accused of such a sweeping fraud.
So angry that authorities have taken measures to protect Madoff's life. He arrived in court wearing the bulletproof vest and his apartment is also equipped with a panic button that allows him to notify security guards of anything suspicious.
He is also under the constant watch of armed guards and video surveillance in case he tries to flee.
Madoff did not speak or show much emotion during the hearing, although he privately conferred with his lawyers. He left the courthouse and returned to house arrest in his $7 million Upper East Side penthouse after a judge upheld an earlier ruling that Madoff can remain on bail.
Judge Lawrence M. McKenna did take Madoff lawyer Ira Sorkin up on his offer to provide an inventory of any valuables in the homes of Madoff and his wife in Montauk, N.Y., Palm Beach, Fla., and France. It must be finished within a week.
Prosecutors have been making a strong push to have Madoff jailed for mailing more than $1 million in jewelry to relatives and two close friends over the holidays. Assistant U.S. Attorney Marc Litt said Wednesday the gifts are further proof that Madoff "cannot be trusted under any set of conditions short of detention."
Litt noted there were no restrictions on Madoff's visitors, cell phone use, computer use, e-mails and texting.
"The means of communicating in the modern world are endless and there's no restrictions on any of it," Litt said.
But defense lawyer Ira Sorkin accused the government of engaging in "inflammatory rhetoric and hyperbole," saying he is already under such extreme restrictions that it would be impossible for him to flee or send more valuables.
The defense and prosecution have been waging an increasingly bitter battle over the bail package _ partially a result of Madoff's perceived lack of cooperation.
An official familiar with the case said Wednesday that Madoff has not offered investigators any information since his first meeting with them after his arrest. The official spoke on condition of anonymity because the investigation is ongoing.
The deadline for prosecutors to deliver a formal indictment of Madoff has been extended until Feb. 11.
Sorkin said this week that "we are cooperating with the government," but it's not clear if that meant Madoff doing anything more than adhering to the terms of his bail and release.
One possible dilemma for Madoff: A plea and cooperation deal that would result in meaningful leniency would require full disclosure. That could mean turning on some of closest allies and family members who worked at his investment firm over the years.
"They have to be satisfied that he's being completely candid about who's involved, including his family," said Robert Mintz, a former federal prosecutor now in private practice.
The FBI said Madoff admitted when they confronted him at his apartment before his arrest that there was no innocent explanation for the lost money. He also insisted he acted alone.
But prosecutors have their own dilemma: Reaching a plea that provides even a hint of leniency could further anger a public that has been clamoring for justice against Madoff.
That has included editorials titled "Burn, Bernie Burn" and a congressman who held a news conference outside Madoff's building and said the magistrate judge who permitted Madoff to remain free didn't get it.
In court Wednesday, Sorkin blasted the actions of the congressman. If he read the judge's ruling and the law on when bail is appropriate, Sorkin said, "even he might get it."