Jail or bail? Judge's ruling on Madoff expected soon

NEW YORK — Prosecutors said Thursday that investigators found 100 signed checks worth $173 million in Bernard Madoff's office desk that he was ready to send out to his closest family and friends at the time of his arrest last month in what is alleged to be largest financial fraud in history.

The detail was provided in a court filing Thursday as prosecutors argued that Madoff should have his bail revoked and be sent to jail. They said the checks were further evidence that he wants to keep his assets away from burned investors in a more than $50 billion fraud.

In the filing, Assistant U.S. Attorney Marc Litt said Madoff cannot be trusted because he had long engaged in a "scheme that required the defendant to lie routinely to thousands of people and a scheme which has caused extraordinary damage to individuals, families and institutions all over the world."

The judge was expected to rule Friday or Monday whether Madoff should be sent to jail or remain free on bail, confined to his luxury Upper East Side penthouse with an electronic ankle bracelet and under 24-hour guard.

Defense lawyers say bail should not be revoked because he is not a risk to flee or a danger to the community.

The court developments came as regulators in Britain opened an investigation into the British business operations of Madoff, raising the prospect that he could face charges there. The fraud office, which is cooperating with its U.S. counterparts, said its investigation would focus on British victims and "any criminal offenses that might have been committed in the U.K."

Madoff delivered impressive returns to investors for decades before authorities say he told his sons that it was "all just one big lie" and "basically, a giant Ponzi scheme." He's accused of blowing more than $50 billion, paying early investors with proceeds from those who entered his investment scheme later.

Investigators previously have said that Madoff had planned on distributing $200 million to $300 million to his closest friends and family after he realized his scheme had unraveled. He was also accused of sending more than $1 million worth of jewelry as gifts to friends and family over the holidays, prompting prosecutors to ask a judge to revoke his bail.

The $173 million in checks appears to represent part of that $200 million to $300 million.

Prosecutors say he presents "grave" economic harm to the community because of the wide range of his alleged fraud, and they cited the attempt to distribute some of his wealth in the past month as proof of the damage he could do.