Bernard Madoff faces potential 150 years in prison after lawyer confirms he is likely to plead guilty

The renegade Wall Street financier Bernard Madoff faces a possible sentence of up to 150 years in prison after being formally charged yesterday with a list of crimes including laundering millions of dollars in ill-gotten gains through London.

Federal prosecutors in Manhattan detailed 11 criminal charges against Madoff including fraud, perjury, theft, false statements and international money laundering.

The US justice department described his alleged crimes as "extraordinary" and "unprecedented" in scale, orchestrated through an alleged $50bn Ponzi scheme dating back to the 1980s.

Madoff has not sought light treatment by striking a plea deal. Nevertheless, his lawyer confirmed that the 70-year-old is likely to plead guilty before a judge tomorrow, leaving him facing the prospect of life in prison. "I gather it is the expectation that he will plead guilty?" Judge Denny Chin asked during a procedural hearing.

Madoff's lawyer, Ira Sorkin, replied: "I think that's a fair expectation."

Investigators believe that Madoff's investment empire spent decades taking money from clients on the promise of hefty returns - in some cases up to 46%. But instead of investing the money, he simply used deposits from new clients to pay out false profits to existing investors.

A British arm of Madoff's investment empire, Madoff Securities International Limited, has emerged as a conduit for the alleged fraud. Two counts of money laundering allege that Madoff channelled at least $250m of fraudulent gains through the division, based in Mayfair, which is under investigation by the Serious Fraud Office.

Prosecutors say that some of the money in Britain was simply transferred back across the Atlantic in order to create a false paper trail.

But Madoff is also accused of tapping the London branch to feather his own nest. According to court documents, Madoff personally directed the transfer of funds from the British operation "to purchase and maintain property and services for the personal use and benefit of Madoff, his family members and associates".

Victims of Madoff's alleged fraud include charities, hedge funds and prominent members of America's Jewish community. Among those who lost money are the Hollywood star Kevin Bacon, the author and Holocaust survivor Elie Wiesel and the Spanish film director Pedro Almodóvar.

Federal prosecutor Lev Dassin said: "The charges reflect an extraordinary array of crimes committed by Bernard Madoff for over 20 years. While the alleged crimes are not novel, the size and scope of Mr Madoff's fraud are unprecedented."

Madoff convinced clients that he had come up with a highly successful "split strike" investment strategy which comprised investing in a basket of popular shares hedged by options contracts against possible falls. He told them that during down periods, he went "out of the market" by buying US treasury bills.

At yesterday's hearing, Madoff told Chin that he would waive concerns over a conflict of interest surrounding his defence counsel, whose family once had an account at Madoff Investment Securities.

In a soft, steady voice, Madoff answered "yes" or "no" to a series of questions. Asked about his mental fitness, he said he had never been under the care of a psychiatrist and that he had consumed no alcohol or drugs for 24 hours.

It is rare for a defendant to plead guilty in the US to such a broad range of crimes without any form of plea deal. Ross Intelisano, a lawyer representing Madoff's victims, suggested that the financier could be "taking the bullet" to protect family members. "He's already 70. The chances of him getting less than 20-30 years in prison are very slim. His priority may now be to protect the ones he loves."

Tomorrow's arraignment hearing is likely to attract hundreds of victims, onlookers and media. Judge Chin has given the go-ahead for a limited number of investors to make statements describing their losses as long as they behave in a "respectful and dignified manner".

Many are furious that Madoff remains on bail, albeit under house arrest in his penthouse on Manhattan's upper east side. Intelisano said: "They're ready for him to start is sentence as soon as possible. They're very upset that he's still in his apartment but sentencing, for many, will be the first step towards closure."

For previous court appearances Madoff has worn a bullet-proof vest, reportedly in response to death threats.

Questions remain over prosecutors' plans for Madoff's wife, Ruth, who, according to court papers, withdrew $15.5m from an account linked to her husband's investment empire in the weeks running up to his arrest. Mrs Madoff has not been charged with anything. Neither have Madoff's sons, Andrew and Mark, who were senior executives in his financial empire.

Madoff's charges in full and the maximum possible jail sentence if convicted

1 Securities fraud 20 years

2 Investment adviser fraud 5 years

3 Mail fraud 20 years

4 Wire fraud 20 years

5 International money laundering 20 years

6 International money laundering 20 years

7 Money laundering 10 years

8 False statements 5 years

9 Perjury 5 years

10 Making a false filing with the SEC 20 years

11 Theft from an employee benefit plan 5 years

(Published by Guardian - June 29, 2009)

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