NEW YORK (AFP) — US prosecutors have until Wednesday to indict disgraced Wall Street financier Bernard Madoff or seek a delay -- something that would be seen as a fresh evidence of plea bargaining.
The US District Attorney's office in Manhattan would not reveal its plans, saying only that both options were available.
Prosecutors and the alleged fraudster's defense team already agreed in mid-January to a 30-day extension. Observers believe the same thing will happen Wednesday.
Madoff is accused of running a 50-billion-dollar "Ponzi scheme" in which he paid out fictitious profits with funds stolen from investments made by thousands of clients.
The former Nasdaq stock exchange chairman was arrested December 11 after allegedly confessing to his two sons and to the FBI.
On Monday, Madoff agreed to a settlement in a parallel civil case against him, effectively agreeing not to contest fraud charges brought by the Securities and Exchange Commission (SEC).
That and the possibility of a further delay in a criminal indictment indicate that Madoff and prosecutors are negotiating over a guilty plea that would mean he would not face trial, but submit to immediate sentencing.
"All outward indications are that what's happening is that there are intense negotiations going on," Robert Mintz, an ex-federal prosecutor who heads the white-collar crime branch at law firm McCarter and English, told AFP.
"The fact that he has settled with the SEC is an indication that his lawyer is working toward a global resolution of all these matters, including the criminal case."
The SEC, which is the main markets watchdog, has come under withering fire for ignoring warnings about Madoff's activities.
One whistle-blower, Harry Markopolos, tried for a decade to get the SEC's attention about what he said were clearly suspicious dealings.
On Monday the SEC announced that its enforcement chief, Linda Chatman Thomsen, had stepped down.
New SEC chair Mary Shapiro vowed to revamp the commission's efforts, while praising the "heroic" achievements of Thomsen.
The Wall Street Journal was skeptical about Shapiro's debut, saying Tuesday that she had launched "a campaign to restore confidence in the SEC without addressing the true causes of its failures."
Madoff, 70, has been freed on 10 million dollar bail but is confined to his New York apartment under round-the-clock surveillance.
Mintz said that Madoff will not avoid a lengthy prison sentence.
However, he may have decided to help officials unravel his dealings in exchange for some form of leniency -- possibly regarding any potential investigation of family members, none of whom has been charged to date.
"The fact he has resolved his issues with the SEC is an indication he is not going to fight these criminal charges and is simply trying to work out the best deal he can with the small amount of leverage he has," Mintz said.
Court papers released last week revealed the identities of thousands of investors caught in what could be the biggest pyramid scheme in Wall Street history.
Those on the list included top Hollywood stars like John Malkovich, the man rebuilding the World Trade Center, and Madoff's own family and lawyer.
Other prominent victims include some of the world's leading financial institutions -- UBS, HSBC, JP Morgan Chase, BNP Paribas and Citigroup -- as well as a string of museums, charities and pension funds.
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