Legal News

Jail Fight! Madoff Gets Beaten up in the Clink

By Ashby Jones

We’ve never spent any time in federal prison, but we imagine that in at least one regard, it’s a lot like serving as a soldier in a war zone. You’re bored, bored, bored until . . . things get extremely interesting.

Our favorite convicted Ponzi schemer Bernie Madoff got a little taste of that back in December, when he was physically assaulted by another inmate, according to three people familiar with the matter. Click here for the story from the WSJ’s Dionne Searcey and Amir Efrati.

Madoff is currently serving a 150-year sentence in Butner, N.C. On Dec. 18, Madoff was moved to the prison’s low-security medical center for treatment. At the time, the Bureau of Prisons said that rumors of an assault were false and that Madoff suffered from dizziness and hypertension.

But that wasn’t the case, report Searcey and Efrati. According to an inmate at Butner, Madoff was treated for a broken nose, fractured ribs and cuts to his head and face. Another inmate who recently was released from Butner after serving time on drug charges also confirmed the assault, as did a third person familiar with Madoff’s situation.

The former inmate said the dispute centered on money the assailant thought he was owed by Mr. Madoff.

The Bureau of Prisons said it investigated the incident, a process that included an interview with Madoff. Traci Billingsley, a BOP spokeswoman had this to say: “In December he told staff he was not assaulted, and an investigation was completed following his statements, which corroborated his statements. Not one inmate has told staff he was assaulted.”

Aside from the news of the assault, Efrati and Searcey’s story hits on some great details. Our favorite: According to one former inmate whose time overlapped with Madoff’s for a stretch, the inmate said he and Madoff talked financial advice. “He gave me ideas on my index funds.” Write Searcey and Efrati:

Mr. Madoff advised him to diversify, saying he should invest in funds that track the S&P 500 index of stocks “where my money would be on all the stocks instead of putting my eggs into one basket,” the former inmate said.

Full post as published by Law Blog - WSJ.com on March 18, 2010 (boomark / email).