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Bernie Madoff Sentenced to 150 Years; From Iraq to Afghanistan; High Court Hears Difficult Race Case; Red Flags Help Avoid Bad Brokers; Michael Jackson's Mother Seeks Custody of Children

Aired June 29, 2009 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

T.J. HOLMES, CNN ANCHOR: And it is Monday, June the 29th. Here are the stories that are driving our coverage today.

And yes, Bernie Madoff, the once high-flying Wall Street financier, learning how long he'll be in prison. He's learning that right now.

We'll be going right to where he's hearing his sentence today in the courtroom in New York.

Also, we're still talking about the mystery of Michael Jackson. His doctor denying that he injected the superstar with potent painkillers. Also, the Jackson family breaking their silence.

And New Haven, Connecticut, the firefighters there. You know their story probably by now. A major Supreme Court decision this morning on race discrimination in the workplace.

Good morning to you all. I'm T.J. Holmes, sitting in for my dear friend Tony Harris.

And you are in the CNN NEWSROOM.

Well, yes, it has been called the biggest swindle in Wall Street history. And this hour, Bernard Madoff is in a Manhattan federal courtroom to learn how long he'll spend in prison.

Madoff admitted back in March that he ran a huge Ponzi scheme that bilked investors out of billions of dollars. Prosecutors wanting a 150-year sentence. The defense says a dozen years is sufficient since Madoff is 71 years old. The court is expected to hear from Madoff and several investors who fell victim to this con.

Actually, heard from them already. The hearing got under way about an hour ago. We're already hearing some of the victims' statements come out.

Also, Friday, the court ordered Madoff and his wife to forfeit their assets, billions of dollars worth of assets, including homes, cars, jewelry, artwork, bank accounts. All of it now federal property.

There's some background on the case.

Let's get some flavor now and the update about what is happening in court today.

Ali Velshi, our senior business correspondent, here with us in Atlanta.

Good to have you here.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Thanks, T.J.

HOLMES: So, what does -- does it even matter at this point? We know he's going to prison. It's just a matter of how long. But he's 71. This is...

(CROSSTALK)

VELSHI: Yes. And look, he's pleaded guilty to the charges that were levied against him, and he is -- if the prosecutor gets their way, and they get 12 years, well, then there's a good chance that Bernard Madoff could see freedom again. The prosecution is asking for 12 years. The Federal Probation Department is suggesting 50 years.

I'm sorry. I was saying the defense is suggesting 12 years. The Probation Department is asking for 50. And the prosecution is asking for 150 years. So, again, we're going to see what's happening. We are having witnesses right now, victims of Bernard Madoff's scheme, in court, right now in New York, talking about the effect that it's had on their lives.

Here's the thing to remember. We talk about this as a big scheme. The amount of money that was actually supposedly lost was about $13 billion. It feels like $50 billion or $60 billion, because if I gave you $10 and said I was going to give you $20 next week, and I didn't pay you anything, were you out $10, were you out $20, were you out $10, plus what you could have made?

That's the issue. But $13 billion is what they seem to have been able to have found to be invested, $1.2 billion has been recovered of the $13 billion.

HOLMES: So all these people we're hearing from today -- and sure, it may make them feel better to hear he's not going to get out of prison, but for the most part, not going to get money back.

VELSHI: Largely, they don't get their money back. Some of them are insured by a federal agency, the Security Investor Protection Commission. And they have some money, up to $500,000 per investor, if you're covered.

They've already paid out about $144 million. They might pay out some more. But ultimately, we are talking about a loss in the billions of dollars, in the tens of billions of dollars, and we're talking about recovery of about a billion dollars at the moment.

HOLMES: And the discretion here -- I mean, sometimes we have mandatory sentencing guidelines.

VELSHI: Right. HOLMES: but how much discretion and leeway is there for what the judge can do?

VELSHI: Well, you know, the judge has -- there are guidelines that recommend what's going on, and he does depend on the Probation Department to give him some sense of it. So, not too many people are siding with the defense argument that it should be a dozen years, but we'll have to know after today is done, maybe in the next couple of hours, after we finished hearing from these victims, to see what the judge decides and the reason that the judge gives for it.

HOLMES: And, of course, need to let our viewers know that we will be seeing you throughout the day, really, on CNN.

VELSHI: Yes.

HOLMES: But also, here, today sitting in for Rick Sanchez.

VELSHI: For Rick, yes.

HOLMES: We'll see you at 3:00. Know you're going to be covering this in full force.

VELSHI: Very good.

HOLMES: Ali Velshi, appreciate you as always, buddy.

VELSHI: A pleasure.

HOLMES: And we're talking about the investors there. A lot of them angry and eager to have their say. One woman who's expected to confront Madoff in court today, she spoke with us, CNN, before she headed into court.

Listen.

(BEGIN VIDEO CLIP)

SHARON LISSAUER, FORMER MADOFF INVESTOR: Of course, I want him to apologize, but apologizing isn't -- I don't believe he's sorry. I don't believe he has any remorse. And if he really does, then I would love for him to give any -- you know, I'd love for him to disclose any hidden assets that he or his family has. So, that's the only thing that would make the victims' lives a little bit better.

(END VIDEO CLIP)

HOLMES: And of course we will keep you up to the minute this morning as far as what is happening in the courtroom in New York. Again, we do know that some of those investors, people who have lost money by investing with Bernard Madoff, they have already been talking in court this morning. Also, expecting Bernard Madoff to make some kind of a statement.

Again, we have people in that courtroom. There are no cameras in the courtroom, but as they get information, the people we have in there, they're trickling that out to our reporters. We will pass that along to you, what is being said. And certainly when that sentence comes down, we'll bring that to you.

And our personal finance editor, Gerri Willis, will have her top tips for finding a financial adviser, making sure you don't make mistakes like some people certainly know they made with Bernard Madoff. That's coming up as well.

We'll turn to Iraq now, and a momentous week in Iraq. U.S. combat troops are to pull out of Iraqi cities by tomorrow. However, most are already in fact pulled out. Baghdad throwing a big party in the city's largest park to celebrate.

Well, this is not that video, but this is some video from, actually, some of the troops in some of the sandstorm, actually. And some of this is grainy. They had a big sandstorm over the weekend there.

Security is what you're seeing, pretty tight there around Baghdad. There's been an uptick in bombings ahead of the U.S. pullback. The Americans are relocating to the bases on the outskirts of the cities. This is the first step of an overall pullout that's supposed to be finished by December 31st of 2011.

The top American commander in Iraq says he believes Iraqi troops are ready to take over. General Ray Odierno spoke with CNN's John King on "STATE OF THE UNION" yesterday.

(BEGIN VIDEO CLIP)

JOHN KING, CNN HOST, "STATE OF THE UNION": Are you doing this based on military calculations or political calculations in the sense that Prime Minister al-Maliki has said he wants the American troops out?

GEN. RAY ODIERNO, COMMANDER, MULTINATIONAL FORCE, IRAQ: I think sometimes it's about strategic advantage over tactical advantage. I think, again, it's important for us to be in line with the security agreement that we signed in December.

I think from a military and security standpoint, it's time for us to move out of the cities. We'll still be there providing training, advising, enablers for the Iraqi security forces. I believe they are capable of doing this. We'll still be conducting significant operations outside of the cities, in the belts around the major cities, and I still believe that this will enable us to maintain the current security and stability situation here in Iraq.

(END VIDEO CLIP)

HOLMES: And a good number of troops who leave Iraq will then get orders to head to Afghanistan. Yes, it's a war zone as well. However, the culture, the landscape, infrastructure quite different from what's happening in Iraq.

Here now, CNN's Atia Abawi in Afghanistan with American forces. (BEGIN VIDEOTAPE)

ATIA ABAWI, CNN CORRESPONDENT (voice-over): The U.S. military on patrol in Parwan Province, meeting with villagers and scoping the territory.

UNIDENTIFIED MALE: You see all those buildings with little slots? Keep your eyes open.

ABAWI: Part of this unit has been here for only 40 days. At least in this deployment. Many of these soldiers have been in both Iraq and Afghanistan. More are expected to come with President Obama's shift in focus to where the war on terror began.

Specialist William Couch spent two tours in Iraq. This is his first tour in Afghanistan. He welcomes the change.

SPC. WILLIAM COUCH, U.S. ARMY: I think it was over time and everything. I think we should have really been shifting our focus on Afghanistan. But, you know, orders by the president dictates everything. But I'm actually happy that we did deal with Iraq, but I think we should have split the forces 50/50.

ABAWI: Right now, U.S. forces make about 50,000 of the 94,000 coalition troops in Afghanistan. Approximately 30,000 are part of the NATO-led International Security Assistant Force, known as ISAF. And the remaining 27,000 American troops are part of Operation Enduring Freedom.

CPL. JEFFERY DESROSIERS, U.S. ARMY: I support it, because Afghanistan's been going on for a lot longer. So, I mean, it's time to focus on this a little more, because Iraq was like the Hollywood type of thing going on. Everybody was going over there, all of news was focused there.

ABAWI: But the shifts won't be easy. As the bumpy drive along primitive dirt roads shows, the country's torturous terrain will be difficult to deal with.

(on camera): This is the third time that our MRAP vehicles have been either stuck in the mud or in a creek (ph), proving the challenging terrain that these soldiers face. Afghanistan's infrastructure is nowhere near what it was in Iraq.

(voice-over): The culture is very different, too. Villagers in this part of the country are not scared to come out and talk to the U.S. military. And those soldiers coming from Iraq are getting used to the changes.

CPL. MATTHEW SKAPIWSKY, U.S. ARMY: The difference between the desert and mountains is totally different for us. It's a lot harder for us to do our job here, just do the terrain.

ABAWI: Bearing the weight of the tasks ahead, these men and women prepare for the next stage in a long forgotten war.

(END VIDEOTAPE)

HOLMES: And our Atia Abawi joins us now from Bagram Air Force Base in Afghanistan.

And Atia, some of the forces, the service members, U.S. service members you talked to there, are they pretty happy that some of their comrades will be certainly on the way to help them do the job in Afghanistan?

ABAWI: Very much so, T.J. We spoke to some soldiers who have been to both wars yesterday, as you saw in that story we just ran. And what they told us, that they say it's about time that there is a shift of focus in Afghanistan. They're saying that the war here has gone on too long and something needs to be done, and that they hope by bringing these new troops, it will also bring an end to the war in Afghanistan -- T.J.

HOLMES: All right.

Atia Abawi for us, again, at Bagram Air Force Base in Afghanistan.

Thank you so much.

We turn now to the Supreme Court. A big day there as the court wraps up the current session and says goodbye to retiring justice David Souter.

Before breaking for the summer, the court issuing decisions on several big cases, including a reverse discrimination suit in Connecticut that could have huge implications.

Details now from CNN's Mary Snow.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): They've become known as the New Haven 20. Nineteen of these Connecticut firefighters are white, one is Latino. They say they were denied promotions because of their race, and their lawsuit against the city will now be decided by the U.S. Supreme Court, which will hear the case Wednesday.

FRANK RICCI, LEAD PLAINTIFF, NEW HAVEN, CONNECTICUT, FIREFIGHTER: We undertook this action for firefighters cross the country and for public safety.

SNOW: Frank Ricci and others took a promotional exam in 2003. When the results came back, the City of New Haven disqualified them because none of the black firefighters who took the exam would have been promoted.

The city's attorney says the tests were flawed.

VICTOR BOLDEN, ATTORNEY, CITY OF NEW HAVEN, CONNECTICUT: When you have a test that suggests a severe racial impact, as this one did, it suggests that perhaps everyone didn't have an equal opportunity to succeed on the exam.

SNOW: But the attorney for the New Haven 20 firefighters says the city's move violates the Constitution.

KAREN TORRE, ATTORNEY FOR FIREFIGHTERS: The government is not supposed to tell any citizen that he or she is either going to get something or be deprived of something because of the color of his skin or his ethnicity or gender or any other irrelevant factor.

SNOW: Gary Tinney, a lieutenant for New Haven's fire department, says he never got his exam results. But he wants to see promotions based on skills beyond written tests such as...

LT. GARY TINNEY, NEW HAVEN FIREFIGHTER: Job performance, you know, community service, being able to interact with a diverse community.

SNOW: And the high court's decision will stretch far beyond New Haven.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: This is a hugely significant case because it begins to answer the question of whether race will be allowed to be used at all by government in affirmative action, in employment, in education and admissions, anywhere at all.

(END VIDEOTAPE)

HOLMES: And our Mary Snow joins us now from New Haven.

And what, so far, has been the reaction to this case that that city's been dealing with for years now?

SNOW: Well, T.J., the firefighters, the New Haven 20, as they've been now known, are meeting with their lawyer, and they are expected to have a news conference this afternoon. We know the parents of the lead plaintiff, Frank Ricci, just went inside to meet, they said, with their son and his attorney, and they appeared very happy at this point.

We talked with the city. They are going to have a news conference, the mayor and the legal counsel. The big question, of course, what happens now to those promotions that have been in limbo for the past five years?

We also had a poll that CNN and the Opinion Research poll conducted. The question was: Were white firefighters victims of discrimination? Sixty-five percent of the people who responded said, yes, they were. Thirty-one percent said no, they were not.

Now, in terms of other reaction that we're getting, the National Association of Police Organizations did file a brief in support of the firefighters here in New Haven, saying that they are happy about this decision, that the Supreme Court saw it their way. And they say that public safety officers should receive promotions that they earn regardless of skin color. So, a lot of reaction coming in within the next couple of hours, but both sides say they want to go over this ruling carefully before they come out and make public statements -- T.J.

HOLMES: All right. Our Mary Snow for us in New Haven, Connecticut, today.

Thank you so much, Mary.

And our senior legal analyst, Jeffrey Toobin, he's going to be joining us next hour, here in the NEWSROOM, continue the conversation of how this case could affect landmark civil rights laws.

Again, he's coming our way 12:05 Eastern Time. Stick around for that.

Also, a coup in a Central American county. What does this mean to the U.S.? Also, all the aid and mission agencies working there?

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HOLMES: Well, it's never too late to say you're sorry, and that's what the victims of Bernie Madoff are hearing now. Bernie Madoff, the financier who is now being sentenced in court right now for that sentencing hearing, has apologized. He has apologized.

We have people in the courtroom who have confirmed he's gotten up and he has spoken. Not sure if he is still speaking, but he has apologized for what he did, saying, he "... will live with this pain, this torment, for the rest of my life." Also saying, and I'm quoting here, "I dug myself deeper into a hole."

Of course, he has confessed, he has admitted to being part or running one of the largest Ponzi schemes this country has ever seen, maybe the biggest to ever take place on Wall Street, and where he bilked investors, thousands of them, out of billions and billions of dollars. They have been -- some of the victims -- in court today, essentially saying they want the toughest sentence for him. No mincing of words, no kind words either today, necessarily, for Bernie Madoff in court.

We're waiting to hear what he may be sentenced. The prosecution is asking for up to 150 years. His team, his defense team, asking for about 12 years. We don't know where that's going to fall. But again, expecting that any minute now, to hear exactly how long Bernie Madoff will spend -- how long his sentence will be, at least. However, he has gotten up and apologized in court to those that he has wronged.

More on that to come, no doubt.

Meanwhile, let's turn now to what we saw last night, last night's BET Awards. There were a number of tributes to Michael Jackson throughout that show.

Take a listen.

(BEGIN VIDEO CLIP)

JANET JACKSON, MICHAEL JACKSON'S SISTER: My entire family wanted to be here tonight, but it was just too painful. So they elected me to speak with all of you.

And I'm going to keep it very short, but I'd just like to say that to you, Michael is a an icon. To us, Michael is family. And he will forever live in all of our hearts.

On behalf of my family and myself, thank you for all of your love, thank you for all of your support.

We miss him so much.

Thank you so much.

(END VIDEO CLIP)

HOLMES: And that, of course, Michael Jackson -- probably the most famous sibling of Michael Jackson, Janet Jackson, last night at the award ceremony.

Also at the award ceremony, Michael Jackson's father, Joe. He was actually on the red carpet, walked the red carpet last night. And along the way, he told our Don Lemon he's concerned about his son's last moments and also concerned about the doctor who was by his side.

Over the weekend, that doctor, Conrad Murray, did speak with Los Angeles police detectives. We're hearing he gave them some information that could help the investigation, even though we're not exactly sure what that is. Police aren't releasing.

Also, Murray's lawyer told CNN this morning that his client found Jackson lying on the bed on Thursday. He was not breathing, but he did have a weak pulse. His attorney also says reports that Murray injected Jackson with powerful painkillers are not true.

Well, beginning next hour, the United Nations meeting about this weekend's coup in Honduras. The soldiers, well, they ousted the president, Manuel Zelaya, from his bed Saturday night. Literally pulled him from his bed in his pajamas, put him on a plane to Costa Rica. Got him out of there.

He is now in Nicaragua, where a number of Latin American leaders are holding a previously planned regional summit. Protests against the military erupted in the capital. Critics claim Zelaya was maneuvering to stay in power after his term expires in January. The U.S. and Europe are calling for the Honduran military to restore the democratically-elected president.

Well, the United States, no doubt, has a stake in what's happening in Honduras right now. Our Josh Levs joins us with that from our CNN international desk.

Josh, good morning to you.

JOSH LEVS, CNN CORRESPONDENT: Good morning to you, too.

Yes, I'll tell you, there is a lot at stake for the United States.

Let's zoom in quickly, because I want everyone to see, it's one of our top stories on CNN.com right now. We have a lot of photos that help tell the story of what has been going on.

But let's do this -- let's do what T.J. was just talking about. I'm going to bring you some facts now about how this affects the United States, our stake in it. We've got some graphics and some video. Let's go straight to that.

We're going to go to this first one because we're taking a look at the economic ties between the two countries. And here we have a figure for you.

Look at that, over $7.4 billion, and that's annual, in trade between the United States, which is the chief trading partner of Honduras, and Honduras. So it's big, right there.

And here are some of the things you might buy. Also, depending on your industry, you might be selling. Chief imports there, U.S., from the U.S., yarn and textiles. Exports to the U.S., they send us clothes, coffee, some of our bananas, a lot of the bananas we get here. Seafood as well.

So a lot of trade ties. That's the big picture economy.

Now check out this, aid. Every year, the United States sends millions of dollars in aid. It's been going up -- $39 million in 2008. Every year jumping.

But also, outside of the economy, there is a bigger picture here. And I'm going to touch on it lightly with this last one, which is about democracy.

You know, the State Department is pointing out seven consecutive democratic elections. The U.S. clearly has a stake in successful Democratic elections working, and that sets up some of the complicated interplay that they are facing right now.

So, there's that, when you look at the government level. But there's something else I want to point to that people have been pointing out to me today, and that is a lot of Americans take part in mission work in Honduras.

Let's zoom back in. I want to show you one Web site about this. It's right here, MissionHonduras.com.

And they are talking about this. In fact, it's small type, but I want you to see this over here. You can see right here, "Due to uncertainty as to how this could affect visitors (ph) to the mission, we are not accepting volunteers at this time given how many Americans do a lot of mission work in Honduras."

T.J., it's also another piece of this puzzle here, something to keep an eye on.

HOLMES: All right. We know you're keeping an eye on it.

Josh Levs, we appreciate you today.

And also today, happening right now in court, in New York, a federal courtroom, Bernard Madoff, the financier accused of running the biggest Ponzi scheme we have ever seen, has apologized to the victims. Still waiting to hear what his sentence may be. We have our people, our producers in that courtroom. As soon as we hear news, we will bring it to you.

Meanwhile, our personal finance editor, Gerri Willis, she'll have some tips for you on finding someone you can trust to handle your money.

(COMMERCIAL BREAK)

HOLMES: Well, we are still standing by to get the sentencing, find out how long Bernard Madoff is going to spend in prison.

Meanwhile, we have been getting word from people who have been testifying in court who have essentially gotten up, his victims, getting to have their say in court today. But Bernard Madoff also got to speak in court today at his sentencing hearing.

Our Maggie Lake is in New York, outside the courthouse.

Maggie, first, I just want to make sure we haven't heard word on sentencing yet, I don't think, right?

MAGGIE LAKE, CNN CORRESPONDENT: No. That's correct, T.J., we have not. But as you mentioned, we have heard from the man himself.

Our producers inside getting us this information just coming out, and he spoke for six minutes in a very steady voice. And let me read you some of what he said. Very dramatic indeed.

He says, "I cannot offer you an excuse for my behavior. How can you excuse betraying thousands of investors? How can you excuse deceiving hundreds of employees? How do you excuse lying and deceiving a wife who still stands by you?"

"I don't ask for any forgiveness. I did not intend to do any harm, but I did a great deal of harm."

He went on to say, "I made an error in judgment. I cannot accept that for once in my life I failed. I live in a tormented state for all of the pain and suffering I created. I left a legacy of shame." "It's something I will live with for the rest of my life. Saying I'm sorry is not enough. I will live with this pain and torment for the rest of my life."

And then, T.J., in what had to be a very dramatic moment, he actually turned directly to his victims and addressed them, saying, "I turn to face you. I know this will not help. I'm sorry."

That was followed by absolute dead silence in the courtroom. Many seemed to be surprised that he actually turned around to face all of these victims who had gotten up before him and told one after the other how he had ruined their lives -- T.J.

HOLMES: And again, Maggie, I don't know how they're going to take that apology that he gave. Maybe they appreciate it, maybe they don't. But at the same time, they did not mince words today. Many of the victims that got to speak before he did, no kind words for Bernard Madoff today.

LAKE: Certainly not. They really -- from what we can understand from our people inside, it really ranged in emotion.

Some of them, like Madoff himself, very sort of steady and calm as they detailed how their lives have basically fallen apart and he's taken everything from them. Others were incredibly angry and emotional.

One of the ones we just were talking about, a couple, a 63-year- old couple, the husband spoke, saying, "It was a violent crime without a tangible weapon." They want a maximum sentence at a maximum prison for this deplorable low-life. And his wife with some of the most sort of angry and emotional words that we have heard yet, coming out and saying -- the husband speaking on her behalf -- "I have a marriage made in heaven. You have a marriage made in hell, and that is where you will return. May God spare you no mercy."

So an awful lot of emotion, and these are the very people that Madoff, just moments ago, turned around to address and tried to offer some sort of an apology -- T.J.

HOLMES: And Maggie, we're going to let you go now. But before I do, can you give us any sense, just for planning purposes, what is next there in the court and when we might hear an actual sentence come down?

LAKE: Well, we wish we had an absolute timeline ourselves. As we said, we have a lot of people inside. But we've already heard from the victims. We've heard from Madoff himself, though. So, the only thing left is that sentencing from the judge. We do expect it to come down soon.

This trial started at 10, and the best guidance we had from the court was that it would take about two to three hours. So, we'll be standing by. We'll get you that news as soon as we can -- T.J.

HOLMES: I know you will. Maggie Lake for us. Thank you so much.

All right. We're talking a lot here about Bernard Madoff this morning, hearing his sentencing and also hearing from the victims this morning during his sentencing hearing. So, how can you keep from becoming a victim? How do you make sure somebody like Madoff doesn't make off with your money?

CNN personal finance editor Gerri Willis shows us in today's top tips, and these are some very timely and important tips right about now, Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Yes, well, you know, you have to think, if there's anything you could do to save yourself from this kind of experience, you'd definitely do it. And the idea here is to do some homework.

Look, you can look at your adviser's record online at finra.org. That's F-I-N-R-A.org. That Web site is operated by the Financial Industry Regulation Agency. They have something on that site called Broker Check. It gives you qualifications, licenses, registrations and exams the broker has passed.

You'll also get your broker's employment history for the last 10 years. You want to look for the disclosure section that will list any trouble your broker was in, and make sure you get references from past and current clients. Check with the SEC Web site -- that's the Securities and Exchange commission Web site -- to see if there are any complaints against it. There are places to go online to get just a baseline of information.

HOLMES: You know, sometimes it can just be a gut feeling you get from somebody, and there's just something about them, they seem like a shady character, doesn't sit right with you. But what are really some of those things you should be looking for to know that you're dealing with somebody that's here that's less than reputable?

WILLIS: Well, there are red flags that you really want to watch for, T.J. And some of these, Madoff himself crossed these lines. Guaranteeing big returns or regular returns. Hey, guess what? The market is risky. It goes up. It goes down. There's no way you're going to get the same returns each and every year.

Also, he handles your check directly. Hey, look, that's a bad sign. When purchasing investments, you want to make sure you are writing checks to a third party custodian, somebody like T. Rowe Price, Fidelity Investments. Do not write it directly to your financial adviser.

And if he dodges your questions, that's another bad sign. One thing to look for, make sure that your adviser is what they call a fiduciary. This is an ethical standard. A fiduciary is legally bound to watch out for your best interests. If someone does not have that designation, they are not required to put your best interests first -- T.J.

HOLMES: And Gerri, what is this about potential conflicts? WILLIS: Well, you know, find out how your financial adviser gets paid. Some charge by the hour or a flat rate. Others earn their money through commissions on projects sold or a combination of fees and commissions. It's not unusual for planners to have working relationships with companies that sell insurance policies, mutual funds. Make sure you get a written description of any conflicts of interest.

And if you're in the market for a financial planner, you may be better off checking out fee-only advisers so you don't have to worry about these conflicts. And course, if you have any questions, send them to me at gerri@cnn.com.

HOLMES: We sure will. Gerri, thank you.

WILLIS: My pleasure.

HOLMES: You'll be interested to hear what we're about to say here. The breaking news, we have gotten word about what Bernard Madoff is going to be sentenced to. Let's go back to our Maggie Lake. Maggie, it sounds like he is going to be spending the rest of his life in prison, no doubt about it.

LAKE: He certainly is. And not only that, the judge giving him the maximum penalty allowed under the law, 150 years, T.J. You remember at the start of this hearing, the judge did mention that the federal probation department had recommended a sentence of 50 years. The judge obviously feeling that that was not adequate enough.

This is the maximum sentence. Bernard Madoff, remember, is 71 years old. Even a shorter sentence would have guaranteed that he's spending the rest of his life in jail, but the judge deciding to give him -- lay down the maximum allowed under law -- T.J.

HOLMES: All right, and our Brian Vitagliano, producer, I believe, Brian, I think you are on the line with me, and you were in the courtroom. Tell us how this went down.

BRIAN VITAGLIANO, CNN PRODUCER (via telephone): That is correct. At approximately 10:32 this morning, federal Judge Denny Chin sentenced Bernard Madoff to 150 years in prison. He said after reading the sentence, or before reading the sentence, he said that any sentence above the 13 years or the 12 years that the defense wanted and above 20 years would be largely symbolic. And he said that for three reasons.

First, for retribution. The punishment, the message must be sent of Bernard Madoff's evil crimes. Secondly, he said there was a deterrence factor that the symbolism involved here should be shown the strongest possible that they could. And then the third for the victims from all walks of life.

The judge ran through several different -- he said several different things before the sentencing. He said that the fraud here was unprecedented, that the loss of the -- the loss amount is off the charts, and the breach of trust was massive. He does not get the sense that Bernard Madoff has done all he could or that he's told all he knows. So, at 10:32, Judge Denny Chin sentenced him to the max of 150 years in prison.

HOLMES: All right. Brian Vitagliano, our producer, who was in the courtroom, you stand by for us there. We're going to bring in our Jeffrey Toobin, our chief legal analyst. Jeffrey, I hope you were able to hear Brian there. But to hear the judge say that he doesn't believe that Madoff did all he could or told all that he knows, I mean, could he apparently throughout this whole case have helped himself if he was a little more forthcoming, at least in the judge's eyes?

TOOBIN: Well, that's an interesting question about how much he could have helped himself. Because given the magnitude of this crime, he was going to probably get a life sentence no matter what. But I think Judge Denny Chin really put his finger on a very important part of this case, which is that Bernie Madoff made a statement about how sorry he is, how sorry -- but mostly, Bernie Madoff seems sorry that he got caught.

And Madoff apparently, at least according to the judge, could be more helpful in identifying co-conspirators or identifying where all the money went. He has not been cooperative in either area. So, Chin is slamming Madoff to the greatest extent allowed by law, and, you know, he's going to die in prison.

HOLMES: All right. I'm going to bring back in Brian Vitagliano. Jeffrey, you stay with us here. Again, for our viewers, we're hearing that Bernard Madoff, the man who was behind the largest Ponzi scheme in Wall Street history, bilking thousands of investors out of billions of dollars, has now been sentenced to 150 years in prison.

Brian Vitagliano, one of our producers, was in the courtroom today. No cameras there, but our producers, we had people in there. Brian, tell us what his reaction was. Could you see a reaction from Bernard Madoff once he heard this sentence?

VITAGLIANO: Yes, his head was down, T.J. And what was interesting is when Bernard Madoff actually spoke to the victims, he took a drink of water, his voice seemed soft and frail. He had looked like he lost weight since the last time he was in court. And he actually, at the end, I'm sure you've heard from some of my colleagues, he turned around and faced the victims and said he just basically said again that he was sorry.

Judge Denny Chin said that he did not agree with the idea from the presentence report that the victims were kind of giving a mob avengeance. He didn't agree with that. He said that they were just sticking up for what they believed in and their rights.

So, all throughout Judge Chin's statement, there was an overwhelming feeling that the judge really believed that this was a staggering, staggering fraud here. He cited some other cases that would get in this district for fraud sentences of perhaps, you know, 15, 20 years. And he said that this particular fraud is it nowhere matched any of those. So, that is, you know, that ultimately he came down with a 150-year max sentence.

HOLMES: And Jeffrey Toobin, again, our chief legal analyst standing by here with us as well, as we're hearing the news of Bernard Madoff getting 150 years in prison, this is symbolism here, right, Jeffrey. Even if you're sentenced to 150 years as a young man, you're going to be dead by the time 150 years comes around. So -- go ahead.

TOOBIN: Well, that's especially true in federal court because under the rules now in effect, you have to serve 80 percent of whatever sentence you got -- you receive before you're eligible for release. There's no such thing as parole anymore in federal prison. So, he would have to serve, what, doing the head -- off the top of my head, about 125 years before he was eligible for parole. So, we're just talking -- for release, so we're talking about a life sentence.

HOLMES: All right. Our Allan Chernoff is standing by as well. He was in the courtroom, had made his way out for us now. Allan, you were sitting in there with this 150-year sentence. And explain to us again, as our producer was as well, explaining why the judge felt it was important to send a message here.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: That's right. The judge entirely rejected Madoff's arguments that he had tried to assist prosecutors, that he essentially handed himself in. The judge said he just didn't believe any of that. He didn't believe Madoff's estimate, in fact, of the extent of the crime. He said he wanted to send Madoff to prison for the full extent, the full 150 years because he said it's important for deterrence. It's important for the victims.

And he said he was especially touched by one victim letter, a widow whose husband had passed away two weeks prior to her visiting Bernard Madoff. She went to Mr. Madoff, went to his office. He put his arm around her and said, don't worry, your money is safe with me. That really, really hit Judge Denny Chin, and he sympathized tremendously with all of the victims.

Indeed, there were ten victims who actually spoke openly to the court. Mr. Madoff did not look at those victims as they spoke. They spoke, in fact, three rows directly behind him. But when Mr. Madoff did speak, when he did address the court at the very end, he did turn around ever so briefly and say to them that I'm sorry, but I know that doesn't help you at all.

HOLMES: And Madoff, what happens to him now? I assume he was taken away. He's being processed, and that's it. Did you see him being taken out of the courtroom?

CHERNOFF: Oh, absolutely. He did not see the light of day this morning. He will never once again see the light of day. He was permitted, however, to actually take off his prison garb. So, in the in the courtroom he was dressed immaculately, dark suit, white shirt, dark tie, the way that he almost always did dress.

So, Bernard Madoff just entirely rejected, his attorney's arguments entirely rejected by the court, and the full extent, that 150-year sentence given by Judge Denny Chin. And when he did give that sentence, the victims in the courtroom did erupt in applause.

HOLMES: There was applause? We haven't heard that yet. There was applause in the courtroom. The judge oftentimes, they will ask that there's no kind of response or any acting out or anything after a response or after a verdict is rendered. So, did the judge then tell people to quiet down or did he let them have their moment there in court?

CHERNOFF: Not at all. In fact, there was a lot of hugging as well among the victims. They were very emotional. Some of them did break down in tears as they spoke to the court, as they described their incredible pain, their loss of all of their assets.

One woman has a child, a daughter in college entering her junior year. She doesn't know if the daughter's going to be able to continue college. One man told of his brother who is mentally disabled. The parents have, of course, been doing everything they can for their son, and now they just don't know where the money is going to come from to care for this unfortunate young man.

HOLMES: All right. Our Jeffrey Toobin. And we do want to let our viewers know as well that we are expecting to hear from some of the same victims who were in court who we didn't a camera in the court. They are going to come out. At least we're expecting, and we're expecting for them to step to the cameras and in front of the microphones. And when we do get that, we will tell you what they do have to say today.

But again, Bernard Madoff, the head of the largest Ponzi scheme this country has ever seen, now going to jail. A hundred and fifty years is his sentence. We will have more details on that as they come to us.

Meanwhile, we're not going to stay too far away from the mystery surrounding Michael Jackson's death and now what happens to his estate and also his three children. Well, now, someone is asking for custody of those three kids. We've got the update.

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HOLMES: Well, a lot of the debate has been around what is going to happen to Michael Jackson's estate and also his three children after his death. Well, we may be getting an answer at least to what's going to happen to the children. Our Dan Simon is standing by for us now. And Dan, now a family member has come forward and asked for custody of his three kids.

DAN SIMON, CNN CORRESPONDENT: That's right, T.J. Approximately 30 minutes ago, Michael Jackson's mother, Katherine Jackson, formally filed a petition for guardianship of Michael Jackson's three children, ages 12, 11 and 7. That happened in Superior Court here in California. That sort of goes to what Joe Jackson was saying last night, Michael Jackson's father, that the couple planned to get custody of those three children.

So, obviously, they're taking the precautions or taking the legal arrangements to make sure that that occurs. If there is some sort of contest, it would likely come from Michael Jackson's ex-wife, Debbie Rowe, who obviously is the mother of two of Michael Jackson's children. At this point, we don't have any evidence that she actually wants to seek custody of those children. So, we're going to keep tabs on that.

Meanwhile, we are here in front of the Encino house, the Jackson family home here in Encino. You can see this very large memorial that is continuing to grow behind us. We are told that in about 30 or 40 minutes or so, Reverend Al Sharpton is going to be making an appearance here, actually has a meeting with some of the Jackson family members to talk about maybe putting together a large tribute for Michael Jackson, maybe talk about some of the funeral details as well.

That's one of the things that we're hoping to learn about today, when the funeral might take place and if there is a public memorial, when that would take place as well and what kind of entertainment would take place there and who would show up -- T.J.

HOLMES: All right. Our Dan Simon again with that news we're just getting, just like you said, half an hour ago, that in fact Katherine Jackson has filed for custody of those kids. Dan, we appreciate you. Thank you so much. And also a possibility of a tribute coming sometime soon. Plans for that being made.

Well, our Tyson Wheatley has been getting tributes as well on another level, smaller level. He's been looking at CNN.com's iReport desk. Tyson, I imagine a lot of these are coming in.

TYSON WHEATLEY, CNN.COM PRODUCER: Yes, that's right, T.J. What a truly amazing response to the life and death of Michael Jackson. More than 2,200 tributes and memories on ireport.com.

Let's start with a couple from a then-9-year-old Jeffrey Wentworth Stevens of Aurora, Colorado, an adorably obsessed fan who celebrated his ninth birthday in full MJ regalia, glasses, the glitter glove and check out this cake. It was the same year that he won two tickets to see Jackson at Mile High Stadium in Denver. He went with his mom and hid behind her when the monsters came out during "Thriller."

Today, he's a fifth-grade teacher and musician who says Jackson's music inspired him to play. "It would turn your soul on. It would turn your heart on. It made you want to dance," said Jeffrey.

Now, check out this gem from Sherri Hardin of Los Angeles. This photo was taken November 30th, 1982. That, of course, the day the best-selling album of all time came out, "Thriller," and here is Sherri with her prized possession. She was only 7 years old.

Moving on. A photo from Rex Craig from Norman, Oklahoma. He met a very young Michael Jackson in 1973. Craig, at the time, he was volunteering at the Bob Hope USO club in Hollywood, California, when Jackson and some of his brothers made a visit. Rex snapped this photo of Michael playing pool. And this photo stayed in a lockbox for more than three decades, T.J., before Rex shared it with us on ireport.com.

You're going to love this picture from a club owner named Ty Blanton of Springfield, Massachusetts. And he actually got his start in showbiz thanks to Michael Jackson. In the early '80s, Ty and his all-black band were having trouble finding gigs until a club owner asked them to play a Jackson-themed show. The band went on and stayed afloat playing -- five years playing Jackson tributes.

Next up, a photo from 1985. This from Jennifer Brown, who at age 14 had a wall full of Michael Jackson posters covering her bedroom. Jennifer says she and all of her peers grew up listening to Jackson and watching his videos. And finally, my favorite, it is a Polaroid photo of a then-12-year-old Danny Bruce of Greenville, Mississippi. This is the year was 1984 and Michael Jackson's groundbreaking zombie- filled music video "Thriller" was still very much resonating to Danny.

I just want to say a personal thank you to everyone who's been sharing memories of Michael Jackson. To see them all or to share yours, please go to ireport.com.

HOLMES: And you know, I might need to send one in. I've got a picture of when I was about 10 years -- I can't remember how old I was, but I had a "Thriller" T-shirt on. My mom sent it to me the other day. So, maybe I'll shoot that one to you as well.

WHEATLEY: We'd love to see it.

HOLMES: All right, thanks, buddy.

WHEATLEY: You bet.

HOLMES: And I want to let you know still about the breaking news we're keeping an eye on out of New York. Bernard Madoff has been sentenced. I believe we have a live picture, even though we were expecting to hear from some of the people who did testify who were in court today telling their stories, the victims of Bernard Madoff. They're coming out. As they do, we're going to be listening to them tell their stories outside that courtroom.

But that story will never be too far from us. We'll continue to bring you the details.

Also, another big story we have been following here for the next -- for the past few weeks, big development out of Iran. We'll check in with our Iran desk. That's coming up next in the CNN NEWSROOM.

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HOLMES: And we will continue our coverage of Bernard Madoff and his fate next hour. Plus, CNN legal analyst Jeffrey Toobin will weigh in on a ruling by the Supreme Court this morning in a discrimination case brought against or brought by white firefighters in New Haven, Connecticut. Also, Supreme Court nominee Sonia Sotomayor previously heard this case.

Also, the deadline for U.S. troops to pull out of Iraqi cities 24 hours away now. Our Barbara Starr has a look at what's next and the story of how two soldiers who were hit by an IED while on patrol are now coping.

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