Wednesday, August 12, 2009

The Problem With Jailing Bernie Madoff's Rat

Judge Richard Sullivan is taking a big risk by refusing to release Frank DiPascali, the Bernie Madoff CFO who has become a cooperating witness. Not a personal risk. Oh no.

It's a low-risk move from the CYA perspective. Had Sullivan released DiPascali, as prosecutors wanted, he might well have been skewered by Madoff's many victims. And obviously, if DiPascali had fled, as Sullivan warned was a realistic possibility, he'd never hear the end of it.

But what Sullivan has disregarded is that the price for this CYA move is that DiPascali may stop cooperating.

In addition to the effect on the Madoff case, his refusing to release DiPascali is a real step backward for law enforcement. Prosecutions of all forms of crime, but particularly organized crime and white collar cases, depend upon insiders ratting out their collaborators.

Sullivan seems to be saying that in a well publicized case, a deal with prosecutors won't be worth a damn.

Future cooperators in the Madoff case, and I'm sure the feds have others, have good reason to wonder if they'll wind up in the can even if the prosecutors promise they won't. This means that prosecutors may have a hell of a time making cases against others who made the Madoff scam possible.

If that happens, Sullivan won't be blamed. After all, he just kept the guy in jail and who can blame him for that?

It's a low-risk move--for the judge. Cynical, self-centered and very dangerous.

© 2009 Gary Weiss. All rights reserved.

Digg my article

Labels: ,

Enter your email address:

Delivered by FeedBurner