04/06/2009 05:12 am ET | Updated May 25, 2011

Madoff Plea Deal May Be In The Works

***UPDATE 8:50pm***

The New York Times reports that Madoff is expected to plead guilty at a plea hearing next Thursday.

The AP has more details on Friday's developments:

Bernard Madoff has taken steps that suggest he could plead guilty as early as next week to charges that he carried out one of the biggest financial frauds in history, lawyers said Friday. Madoff, 70, is waiving his right to have a grand jury hear the government's case against him, agreeing instead to be charged directly by prosecutors, a step defendants take when they are preparing to plead guilty in a case.

Late Friday, U.S. District Judge Denny Chin called on potential victims who wish to be heard at a Thursday plea hearing to notify the court a day earlier. Madoff could enter a guilty or not guilty plea that day, depending on whether he has reached a plea deal with the government.

A plea deal between Bernard Madoff and the US Attorney General's office in New York may be in the works.

The AG filed a notice of intent to file an information on Friday. This is the first step prosecutors often take when they believe a defendant, in this case Madoff, may waive his right to a grand jury indictment.

Typically, defendants waive their right to a grand jury indictment if a plea deal is near.

"Any such waiver of indictment strongly suggest that the parties are close to a plea bargain," said John Coffee, professor of law at Columbia University.

The US Attorney General had no comment. Next Friday is the deadline for prosecutors to bring an indictment against Madoff under the speedy-trials law.

The terms of a plea deal with Madoff, who allegedly perpetrated a $50 billion ponzi scheme, will be closely watched.

According to Coffee, the minimum charge would be one count of securities fraud, which carries of maximum of 20 years. "I would think there would be public outcry with only one count indictment, although that is what defense would like," Coffee said.

Madoff could also be charged with multiple counts of securities fraud--potentially one for every victim--which could result in a life sentence.

There is also the possibility Madoff will be charged with violating the Racketeer Influenced Corrupt Organizations Act, or RICO. Such a charge would be a way for the government to take possession of the $70 million Madoff's wife Ruth is now holding.

Under the RICO statute, from the moment any ill-gotten gains are received, the proceeds immediately become the property of the US government. This means that any profit from any Madoff dealings dating back to the beginning of the fraud would go to the government, including Ruth's holdings.

According to CNBC
Madoff is scheduled for two court appearances next week: The first court appearance is in regards to a potential conflict of interest regarding his attorney, Ira Sorkin. The hearing will be on Tuesday. Madoff's arraignment is scheduled on Thursday at 10 am EST.

Madoff -- Notice of Intent to File an Information - Free Legal Forms