Irwin Lipkin, 74, a former controller of Bernard L. Madoff Investment Securities LLC, had been scheduled to plead guilty to charges of conspiracy to commit securities fraud and falsifying documents, prosecutors said in court documents this week.

Lipkin's lawyer, David Richman, said in a letter filed in U.S. District Court in Manhattan that his client "has been admitted to a New Jersey hospital for observation and treatment of a kidney condition". He said Lipkin's doctor could not predict how long he would remain in hospital.

U.S. District Judge Laura Taylor Swain adjourned the plea proceeding indefinitely.

Lipkin was hired by Madoff in 1964. He continued to draw a salary from the firm even after he stopped working there in 1999, according to court records.

Lipkin's son, Eric Lipkin, another former Madoff employee, pleaded guilty in 2011 to criminal charges of bank fraud and charges that he reported people were Madoff employees so they could receive retirement benefits.

Madoff, 74, was charged in December 2008 with a decades-long fraud that the government originally estimated at as much as $64.5 billion. He pleaded guilty in March 2009 and is serving a 150-year prison sentence.

The trustee leading the search for money to return to Madoff's victims says Madoff defrauded customers of about $20 billion. The trustee, Irving Picard, so far has won $9.1 billion in recoveries and settlement agreements.

Of the dozen people charged in the case, apart from Madoff, five have pleaded not guilty and are awaiting trial.

On June 29, Madoff's brother, Peter, pleaded guilty to criminal charges. He had been chief compliance officer at his brother's firm. He has agreed to accept a 10-year prison term.

The case is U.S. v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-00228.

(Editing by Martha Graybow and Dale Hudson)

By Grant McCool