COURT PROCEEDINGS:BERNARD MADOFF, the man behind the biggest investment scam in history, was last night set to spend his first night sleeping alongside accused drug dealers, murderers and rapists after pleading guilty to 11 counts of fraud in a Manhattan court.

Mr Madoff, who has been living in luxury at his $7 million penthouse on New York’s East 64th Street since his $65 billion Ponzi scheme was uncovered last December, was expected to be taken to the Metropolitan Correctional Centre in downtown Manhattan. From there he will be ferried to one of the many federal prisons in upstate New York where he will await sentencing.

The 70-year-old fraudster faces a 150-year sentence if US District Judge Denny Chin chooses the maximum term for each of the 11 counts. The sentencing hearing is scheduled to take place on June 16th. Whatever length of sentence is handed down, however, it is expected that Madoff will spend the rest of his life behind bars.

Madoff was early yesterday morning driven in a silver SUV from his uptown apartment to the steps of the Federal Court House in Lower Manhattan.

News helicopters followed the car all the way and hovered overhead as Madoff, wearing a charcoal grey suit that concealed a bulletproof vest, was welcomed by a crowd of several hundred jeering victims and onlookers. Two burly US marshalls clasped each of Madoffs arms and led him inside, without handcuffs.

Once inside the court Madoff, who stood to the left of his lawyer, admitted to securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the US Securities and Exchange Commission and theft from an employee benefit plan.

The fraudster read a prepared statement to the court in which he apologised to the 4,800 victims from whom he stole billions of dollars during a decades long deception.

Madoff told the court that he operated a Ponzi scheme through his investment advisory business, Bernard L Madoff Securities LLC. “I am actually grateful for the first opportunity to speak publicly about my crimes, for which I am so deeply sorry and ashamed.”

Judge Chin, at times, had to call the court to order as members of the public gallery laughed or started to talk.

The public applauded when Judge Chin said he believed Madoff was a “flight risk” and should be remanded in custody after the hearing.

“As I engaged in my fraud,” Madoff said, “I knew what I was doing was wrong, indeed criminal.”

About 100 people in the packed courtroom hung on Madoff’s every word while another 400 people watched on TV screens in two overflow rooms.

Madoff said that the fraud had begun, to the best of his knowledge, in the early 1990s when the recession posed a threat to his investment business. He said he knew the bear market would not provide the returns he wanted to give his clients and so he began operating the Ponzi scheme.

Later on he claimed he began wiring money to the UK to make it look as though international transactions were taking place, but in reality he was just shifting money from one bank account to another.

Madoff lived a life of luxury on the back of his duped investors, with homes in New York and Florida, expensive vacations and all the trappings of a socialite.

He also rose to the upper echelons of Wall Street, having served as the chairman of the NASD, one of America’s top financial regulators, and on the board of the Nasdaq stock market.

Mr Madoff said he acted alone in his fraud while his wife Ruth claims the $69 million of assets held in her name are not connected to the fraud in any way.

Authorities indicated that the investigation is far from over, however.

Lev Dassin, the Acting United States Attorney for the Southern District of New York, praised the investigative work of the FBI and said: “Today is one step in an ongoing investigation. While we do not agree with all the assertions made by Mr Madoff today, his admissions certainly establish his guilt.

“We are continuing to investigate the fraud and will bring additional charges against anyone, including Mr Madoff, as warranted.”