Reside Boston News Blog

June 29 (Bloomberg) — Bernard Madoff was sentenced to 150 years in prison for masterminding the largest Ponzi scheme in history.

Madoff appeared in court today before U.S. District Judge Denny Chin for the first time since his March 12 guilty plea for an epic swindle that may have reached $65 billion.

“I don’t ask for any forgiveness,” Madoff, 71, told Chin. He said he deceived his brothers, his two sons and his wife. The courtroom burst into applause as Chin imposed the sentence, which is about six times longer than those meted out to the chief executives of WorldCom Inc. and Enron Corp.

Madoff pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the SEC and theft from an employee benefit plan.

Madoff today was led into the 11th floor courtroom in Manhattan federal court clad wearing a suit and flanked by federal marshals. Seated beside defense attorney Ira Sorkin, Madoff sat silently as nine former investors assailed him for a fraud that cost many their life savings.

Madoff has shown “no remorse,” said victim Carla Hirschhorn, of Manalapan, New Jersey, at the hearing. She told Chin her life is a “living hell,” her mother is dependent on social security and her daughter works two jobs to pay tuition. “Don’t fail us,” she told the judge.

Deeply Flawed

Sorkin told the court after the victims spoke that his client is a “deeply flawed human being.”

Madoff’s sentencing caps the downfall of an acclaimed investment adviser who told the world his fortune came through an eponymous firm that specialized in making markets, trading securities and advising wealthy clients.

Over three decades, he built a reputation as a brilliant stock picker who delivered steady returns through both bull and bear markets. He attracted an international client roster that included celebrities including filmmaker Steven Spielberg, fund managers such as J. Ezra Merkin, charities, universities, friends and even European royalty.

His facade shattered on Dec. 11, as Madoff confessed to authorities that his firm, Bernard L. Madoff Investment Securities LLC, was “one big lie.” Under immense pressure from a rush of investor redemptions, he admitted he used money from new investors to pay old ones. Regulators later said that his investment advisory business hadn’t made a trade in at least 13 years.

Some of his thousands of investors lost their life savings. Thierry Magon de La Villehuchet, chief executive officer of Access International Advisors, which managed $3 billion, was driven to suicide because of his firm’s Madoff-related losses, his brother, Bertrand Magon de la Villehuchet, said in January.

Maximum Sentence

Madoff received the maximum sentence on the 11 fraud charges to which he pleaded guilty. Before his sentencing, he consulted with Herbert Hoelter of the National Center on Institutions and Alternatives, a prisoner advocacy group, according to court records.

Other Hoelter clients have included lifestyle doyenne Martha Stewart, who was jailed for obstructing justice, and football player Michael Vick, who served time for helping to run a dog-fighting ring.

The U.S. Bureau of Prisons will now decide where Madoff serves his term. Since being locked up in March, he’s been housed in the maximum security Metropolitan Correctional Center next door to the courthouse.

Other aging white-collar convicts are in low-security prisons. Former WorldCom Inc. Chief Executive Officer Bernard Ebbers, 67, is housed at the Federal Correctional Institution in Oakdale, Louisiana. John Rigas, 84, the ex-CEO of Adelphia Communications Corp., is imprisoned at the Federal Correctional Institution in Butner, North Carolina.

‘Ashamed’

At his guilty plea in March, Madoff said that in the early 1990s, with the U.S. in a recession, he felt “compelled” to provide the returns his investors expected and began stealing investor money. He said the proprietary trading and market- making units of his business, both run by his sons, were “legitimate,” and his U.K.-based affiliate, Madoff Securities International Ltd., was an “honestly run” business.

“I am actually grateful for this opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed,” Madoff said in court at the time. “I knew what I was doing was wrong, indeed criminal.”

The case doesn’t end with the sentencing. Investigators have seized control of Madoff offices at the lipstick-shaped building at 885 Third Avenue in Manhattan, where Madoff Securities operated out of three floors.

Prosecutors are probing whether his subordinates helped him swindle investors. A central issue is whether employees knew of the fraud. Madoff’s accountant, David Friehling, has been indicted on federal charges of lying to Madoff investors about whether he audited the firm.

Civil Lawsuits

No one else at the firm has been charged, and Madoff has not publicly implicated others. His sons Andrew and Mark Madoff ran the proprietary trading operations at Madoff’s firm. They turned their father in to authorities on Dec. 10 after he confessed to them, their attorney, Martin Flumenbaum, has said.

There has been a burst of civil litigation as well. Stephen Harbeck, president of the Securities Investor Protection Corp., which is liquidating Madoff Securities, said in May that it may take longer than 10 years to finish locating the company’s assets and paying back victims.

Investors have filed lawsuits against funds that invested with Madoff and were wiped out, including Fairfield Greenwich Group and Gabriel Capital LP. SIPC has also filed “clawback” suits against the feeder funds. Fairfield Greenwich is being sued for the $3.5 billion it withdrew before the fraud unraveled.

The case is U.S. v. Madoff, 09-cr-00213, U.S. District Court for the Southern District of New York (Manhattan).

Rates for 30-year home loans jumped to the highest level in seven months this week, leading to a slowdown in refinancing activity, Freddie Mac said yesterday.

The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, Freddie Mac said. The last time the average 30-year fixed-rate mortgage was higher was the week ended Nov. 26 of last year, when it averaged 5.97 percent.

Right as the luxury real estate market was finally dragged into the recession’s molasses-like grip, Boston now has another high-end high-rise, this time in the Downtown Crossing area.

45 Province opened last week to a select few after more than two years in the making. If you’ve got enough to put a down payment on one of the 138 units in this 32-story building (about 20 percent are already sold), these photos will probably be very familiar.

- Boston.com

Sales of previously occupied homes rose modestly from April to May, the third monthly increase this year, but signs of a housing recovery are fragile at best.

The National Association of Realtors said Tuesday that home sales rose 2.4 percent last month to a seasonally adjusted annual rate of 4.77 million, from a downwardly revised pace of 4.66 million in April. The results, however, missed analysts’ expectations and stock markets edged lower on the news.

“While activity has stabilized, a meaningful recovery has yet to begin,” wrote Paul Dales, U.S. economist with Capital Economics.

The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hindering the recovery of the real estate market.  As companies continue to shed jobs, more cash-strapped homeowners are predicted to go into foreclosure.

About one out of every three homes sold was a foreclosure or distressed sale. That helped drag down the median price to $173,000 — 16.8 percent below a year ago. Falling prices coupled with new rules for property appraisers have caused many transactions to fall apart or be delayed.

“We have just been flooded with e-mails, telephone calls on the appraisal problems,” said Lawrence Yun, the Realtors’ chief economist.

The sales results missed economists’ expectations, and stock markets headed lower on the news. Home sales had been expected to rise to an annual pace of 4.81 million units, according to Thomson Reuters.

One bright spot, however, was that the number of unsold homes on the market at the end of May fell 3.5 percent to nearly 3.8 million. That’s a 9.6 month supply at the current sales pace.

That drop was “the best news in the report,” said Joseph LaVorgna, Deutsche Bank’s chief economist.

Still, the inventory figures don’t reflect the large number of houses being held off the market by owners reluctant to sell while prices are so weak, noted Richard Moody, chief economist with Forward Capital.

Mortgage rates are another problem. Interest rates for 30-year home loans, which fell to all-time lows this spring, have been edging back up. The average rate was 5.38 percent last week, according to Freddie Mac.

Boston’s vacancy rates rising to an all time high!

What does this mean to you?

Very good things! Now, more than ever, is a GREAT time to find an apartment. Landlords are struggling to get their apartments rented more so this year than  in the past.  This means landlords are more and more willing to give you (the renter) a deal. Don’t be afraid to ask for some sort of discount, maybe a free months rent, or a reduced rent. The Boston Globe reports today that vacancy rates are heading to all time high and landlords are more willing to cut deals to make sure their apartments get rented.

At our office we have seen fewer calls for high end apartments, actually fewer calls for apartments in general. People shouldn’t be discouraged  by Boston’s expensive rents in this bad economy. It never hurts to ask for a lower rent especially with all these landlords getting very scared of having vacant apartments.  Now is the perfect time to make a deal.

Boston.com’s Article

** As you can see from this graph, vacancy rates are skyrocketing, yet the prices aren’t going down as much as they should be. That’s why these landlords have empty apartments. Ask for a lower rent!

The Clarendon Building Boston is starting to look like a gem. Completion date scheduled for end of 2009. It will soon be a Back Bay icon building for sure. It will be the only true Back Bay hi-rise. It will be a mix of condos and rental units. They will have separate entrances and amenities. The Clarendon also has a valet garage parking. I love the location for the best of both worlds in city living and fine restaurants. You can stroll over to Mistral or walk to restaurant row in the South End and go to Hamersley’s Bistro.

Studio, 1, 2, and 3 Bedroom units available $700K-$5Mil. Parking cost is $150K.Please contact us to setup an appointment to visit the sales center. You can see floor plans and kitchen and bathroom models with finishes. Sales office is located in the first block of Newbury Street directly across the street from our office.   www.rikemanre.com

More good news on the homebuilding front. Confidence among U.S. homebuilders fell unexpectedly in June, indicating that a recovery from the housing slump will be slow.

The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 15 this month from 16 in May, the Washington-based NAHB reported today. We can only hope this gets better in the up and coming months.

Looks like no more deals on designer duds
Filene’s Basement sought bankruptcy protection last month for the second time in almost a decade after sales slumped. The company listed liabilities of more than $100 million and $50 million to $100 million of assets in a Chapter 11 petition. I have been combing the racks and finding nothing good anymore.

Parking is still like gold in Back Bay.An unidentified buyer spent a whopping $300,000 yesterday for a private parking space in Back Bay Proper. The highest price ever paid for a Boston parking spot at 48 Commonwealth Ave. Sold to a resident of an adjacent brownstone that has multimillion-dollar condos but little parking. Located in an alleyway behind the building, the $300,000 spot features detailed red-and-white brickwork that matches the structure’s renovated 19th century exterior. LINK said the parking spot’s $300,000 sale price represents a new Boston record, topping the $250,000 that four Hub spaces have sold for since 2007.You can buy a small condo for just $250,000.Hub residents interviewed yesterday at the site had mixed emotions about the pricey parking.