Lawrence R. VelvelDean, Massachusetts School of Law500 Federal StreetAndover, MA 01810

March 10, 2009The Honorable Denny ChinUnited States District JudgeDaniel Patrick MoynihanUnited States Courthouse500 Pearl Street New York, NY 10007-1312Dear Judge Chin:I am a member of and am writing you on behalf of the Steering Committee of MadoffSurvivors. MadoffSurvivors is a Google group with approximately 300 members.They were investors with Bernard Madoff, and their accounts were wiped out by therevelation on December 11, 2008 that Madoff was running a Ponzi scheme. Our estimate, and it is

only

an estimate, is that the amount of money lost by MadoffSurvivorscollectively is probably in the neighborhood of 500 to 700 million dollars.The members of MadoffSurvivors are

not

the billionaires, “centamillionaires,”hedge funds, and banks that the celebrity-driven mass media focus on, thereby causingthe public to believe that the victims of Bernard Madoff are all wealthy plutocrats.MadoffSurvivors are, instead, “little” people. They are people who usually started withlittle or nothing, as members of the working class or lower middle class, as immigrants,as children of holocaust survivors. They are people who worked like dogs all their lives,finally saved up enough money to make an investment in Madoff, and now findthemselves wiped out. Many -- perhaps even most -- are elderly, in their late 60s, 70s, or 80s. Many had no other savings or income except what they had in or received fromMadoff. Many are completely devastated, financially and psychologically. They areselling their homes in order to obtain money to live. They are attempting to reenter thework force, sometimes in menial jobs, in their 60s, 70s and 80s, in order to obtain moneyfor food and shelter. (There is, as you may know, one man in his 90s who is reported tohave taken a job in a supermarket passing out fliers, we believe, in order to sustainhimself.) They are the victims of both a terrible crime and a terrible tragedy.1

The crime and tragedy of which they are victims were not caused by BernardMadoff alone. They also were caused by a widely circulated public statement by the SECin December 1992 that there was no fraud involved, and by the subsequent conduct of theSEC from 2000 onward in failing to properly investigate Madoff when given a plethoraof tips by Harry Markopolos and, it now appears, by some others as well. The SEC’sfailure to pursue the (accurate) charges of a Ponzi scheme made by Markopolos is wellknown. The SEC’s public statement of December 1992 that no fraud existed, a publicstatement that was never retracted despite all the tips the SEC later received, is rarely if ever mentioned by the media, but was the cause of huge numbers of people keepingalready-invested money in Madoff, putting initial monies in Madoff, and/or putting

money in Madoff. It is an unhappy fact, but a fact nonetheless, that the governmentitself, by publicly placing the imprimatur of honesty on Madoff in December 1992, andnever retracting it thereafter, caused untold numbers of people to invest in and lose billions of dollars in Madoff, and enabled Madoff’s fraud to grow from less than half a billion dollars in 1992 to what Madoff claimed to be 50 billion dollars in 2008. The SECcontributed to disaster by incompetently failing to protect citizens who depended on it for protection -- for the very protection that was a fundamental reason for passage of thefederal securities laws in the 1930s.To the members of MadoffSurvivors, as to other “small people” victimized byMadoff, it is critical that the government uncover, and recover, every possible dollar of Bernie Madoff’s stash, and the stashes of his family members and guilty non familyemployees, so that as much as possible can be returned to the devastated victims of hisfraud and of the government’s negligence or even, possibly, complicity. Very few people believe that all the many billions Madoff took in has been spent by him or his family, or redeemed by prior investors. Rather, it is widely believed, perhaps even universally believed, that there are billions of dollars, perhaps

tens

of billions of dollars or more,stashed away in banks in countries which in the past have served as secret repositories of ill gotten wealth (Lichtenstein, the Cayman Islands, etc.), in banks in Israel, in illiquidreal estate in a number of foreign countries, and in other investments. There is also adeeply unhappy suspicion that branches of various mafias or cartels could have beeninvolved and could have been siphoning off billions of dollars.For these reasons, the Steering Committee of MadoffSurvivors urges that nosentence be pronounced upon Madoff until, and if legally possible there should even be asuspension of a plea until, the government -- including the Department of Justice, itscomponent the FBI, the SEC, and any other relevant federal bodies -- is willing toformally attest that Madoff, his family members, and his culpable employees have fullytold it where every dollar stolen from investors by Madoff has gone, insofar as it is possible to know this, from 1960 or 1962 -- whichever the year Madoff began taking inmoney from investors -- until the present time; to formally attest to the identity of the persons, institutions, banks, partnerships, trusts, real estate or other property which haveor do possess the stolen money or in which it is invested, and will formally attest to andidentify every step it used to recover the money; and will formally attest to and identifyall evidence of guilt in its possession, as well as remaining locations of the money or the2