BACKGROUND:Bernard Madoff's Ponzi scheme was the simplest of crimes, writes JAMES DORANin New York

WHEN FEDERAL judge Denny Chin yesterday morning handed Bernard Madoff the maximum 150-year sentence for committing the biggest fraud in history, the 71-year-old conman lost more than his liberty.

As the packed courtroom of victims and onlookers applauded and cheered his punishment, Madoff’s features betrayed his true feelings. He had lost control of his destiny for the first time since he embarked on this most audacious of crimes more than 40 years ago.

The teams of federal prosecutors who brought Madoff to court in lower Manhattan doubtless believe they had something to do with his capture, his guilty plea and his incarceration – but nothing could be further from the truth.

Madoff was in command of his fate from the day he embezzled his first dime until Judge Chin’s gavel came down a little before noon yesterday. He was in control beyond his arrest, beyond his confession, beyond even his final night in “The Tombs” – the dingy cell where he languished for three months as he awaited yesterday’s sentencing hearing.

Madoff’s Ponzi scheme was not complex; in fact it was perhaps the simplest of crimes. He convinced thousands of wealthy victims to hand over billions of dollars – some of which he kept, some of which he paid out as fake returns to keep other investors happy.

But last October, the credit crunch began to bite into the bottom lines of Madoff’s wealthy clientele – which included the rich elite of Palm Beach Florida, Swiss bankers, members of the French aristocracy, charities, local government pension funds, big investment firms and ordinary men and women saving for retirement.

All at once they began to ask for their money back.

Without a steady supply of incoming cash, Madoff had nothing to pay out to the other members of his massive Ponzi scheme and so he had to call time on the whole affair.

On the afternoon of December 10th last year, Madoff walked out of his offices in the Philip Johnson- designed “Lipstick Building” on 3rd Avenue and took a car to his penthouse apartment on East 64th Street.

Once there, he called the office to ask his sons Andrew and Mark to join him for a meeting.

“I am finished,” he told his sons “I have absolutely nothing,” he went on. “It’s all just one big lie . . . basically, a giant Ponzi scheme.”

His sons apparently listened to their father confess his epic scheme for several hours and then left his apartment. Later they called the FBI and turned Madoff in, just as he had asked them to.

So Madoff was never caught, he turned himself in on his own terms and remained very much in control of his fate and the fate of his sons, his wife Ruth, his brother Peter and many other friends and family members who had been in business with him but have not been charged with any crime.

In March, Madoff pleaded guilty to 11 counts of fraud and refused to co-operate with investigators looking for accomplices.

There are still few who believe Madoff could have perpetrated a crime of this magnitude alone.

Most criminals who appear for sentencing in US federal court are forced to wear loose-fitting prison garb. Not so Madoff, who was allowed, upon his insistence, to wear his trademark dark suit, white shirt and dark tie – just another example of his ability to remain in control of his destiny, no matter how tenuous his grip.

Now Madoff is behind bars for good, authorities have a chance to assert their control over the scheme.

Federal prosecutors have stripped Ruth Madoff of almost all her wealth – leaving the fraudster’s wife with just $2.5 million from a fortune of $80 million.

Doubtless she will need much of that to cover her legal fees as the same federal prosecutors are determined to continue investigating her, her sons

and many others, to determine if they had any part to play in the biggest fraud of all time.