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NEW YORK (CBS) ― Prosecutors in the case against disgraced financier Bernard Madoff told a judge Tuesday that the alleged scam artist faces up to 150 years in prison in an 11-count indictment.

Madoff is being charged with securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, making false statements, perjury, false filing with the U.S. Securities & Exchange Commission and theft from an employee benefit plan.

Asked by the judge if Madoff would plead guilty on Thursday, his attorney Ira Sorkin said: "I think that's a fair expectation."

According to a letter filed in the criminal complaint, the government will seek forfeitures of up to $171 billion from Madoff, an indication that the alleged Ponzi scheme is much larger than the $50 billion that's been estimated.

Sorkin refused comment after the hearing.

The development comes after U.S. District Judge Denny Chin ruled that Madoff can retain his legal counsel despite several potential conflicts of interest in his massive fraud case, including a $900,000 investment by his lawyer's sons.

Chin also said there was no plea arrangement.

"There is no plea bargain here," Chin said. "Those victims who objected to a plea bargain no longer have a reason to object." Chin added that he will wait several months to sentence Madoff.

After nearly a month of seclusion in his luxury Manhattan apartment, Madoff was back in court on Tuesday. Madoff, who wears a bulletproof vest, was brought to a courthouse in lower Manhattan more than three hours early -- a move meant to avoid any confrontations with angry investors.

Many of the 70-year-old's bilked investors were present too, hoping the judge will give them the chance to tell Madoff just what they think of his multi-billion dollar Ponzi scheme.
 
"I guess I would tell him how personally difficult he will be making my life," said Joan Schulman, one of the thousands defrauded in the scheme. Shulman said she's not as much concerned about Madoff's prison sentence as she is with getting back her money and some answers.

"I so much want to know why he did what did, if he could look us in the eye and explain why he did what he did," she says.

The former Nasdaq chairman has been under house arrest since he was charged in December with swindling investors out of the estimated $50 billion. He last appeared in court on Jan. 14.

Attorney Jerry Reisman, who represents more than a dozen Madoff investors, predicted that Thursday's hearing would be "a zoo."

Attorney Jerry Reisman, who represents more than a dozen Madoff investors, predicted that the plea hearing would be "a zoo."

"I will tell you my clients are outraged by his being able to escape with a guilty plea," he said.

But Chin told prosecutors to limit the number of victims who will speak in court, and make sure they conduct themselves in a "respectful and dignified manner."

Although authorities initially alleged that Madoff swindled investors out of $50 billion, investigators reviewing his company's books say the size of the actual fraud might have been less than $20 billion. So far, authorities have located about $1 billion.

During the hearing, Sorkin complained that federal authorities have not let defense lawyers study the financial records of Madoff's firm so they can show that some individuals or financial funds actually received more in payouts over the years than they are claiming they lost. Chin said he understood that Madoff was not agreeing to the extent of the losses alleged by the government.

Although Tuesday's hearing was expected to be largely procedural, the courthouse was using it as a dry run for Thursday, showing the proceedings on a large screen in a second courtroom and in the juror assembly room, which can fit hundreds of people.

Earlier Tuesday, prosecutors for the first time detailed the financial ties between Madoff and Sorkin as they sought to get Madoff to voluntarily waive his right to conflict-free representation.

The papers said Sorkin's parents had invested approximately $900,000 with Madoff to create trust accounts for Sorkin's two sons. They said Sorkin has told the government that he is a trustee of the sons' trust accounts but has never had a beneficial interest in the money.

Prosecutors also noted that Sorkin once invested $18,860 with Madoff through a retirement account in the early 1990s. They said, however, that they did not believe this represented a conflict because it was liquidated more than a decade ago.

The government said it also believes Madoff can waive any potential conflict of interest caused by Sorkin's prior representation of two potential witnesses in the case, Frank Avellino and Michael Bienes.

The government said the pair's accounting firm, Avellion & Bienes, was dissolved after it settled accusations in 1993 by the Securities and Exchange Commission that it had sold unregistered securities and operated as an unregistered investment company from 1962 to 1992.

Prosecutors said Madoff has had a long-standing business relationship with Avellino and Bienes and that money Avellino and Bienes raised from their clients was invested with Madoff.

After Madoff was placed under oath, the judge asked if he was satisfied with Sorkin's reprensentation. "I am," he said.

Chin said: "Is it your wish to continue with Mr. Sorkin in thus case?"

Madoff replied, "Yes, your honor." Then the judge found that the "conflicts here are waivable."

 

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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