Madoff Employees' Trial Opens

Oct 17 2013 | 2:48pm ET

The trial of five former Bernard Madoff lieutenants got underway in earnest yesterday, with prosecutors painting a bleak picture of the accused.

"For more than 30 years, Bernard Madoff ran a multi-billion dollar fraud that turned out to be the biggest Ponzi scheme in U.S. history," Assistant U.S. Attorney Matthew Schwartz said. "There are the people who helped him do it," he said, and "each of them got rich."

Annette Bongiorno, Daniel Bonventre, Joann Crupi, Jerome O'Hara and George Perez are accused of aiding and abetting Madoff's fraud, which unraveled in late 2008. All five—the first of the 15 people accused in the case to stand trial—deny knowing that their boss was running a scam.

Schwartz told the jury that Bongiorno, Madoff's secretary, and Crupi, who handled the firm's daily cash balances, spent most of the day poring over stock prices coming up with "lies to tell investors." Operations director Bonventre "cooked the books" and "treated the company like it was his own personal piggy bank." O'Hara and Perez, computer programmers, used their skills to create systems to trick investors and regulators—and in 2006 insisted on being paid in diamonds, to avoid leaving a paper trial.

The prosecutor conceded that Madoff "sometimes lied to these defendants." But he insisted that "they knew exactly what they were doing" and urged the jurors to "apply your everyday common sense to the facts of this case."

The trial is expected to last up to five months, with the fate of the five defendants in the hands of eight women and four men. At least three of the jurors are teachers and one works at New York City's Human Resources Administration.

Opening statements by the defense attorneys are set to begin today.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Controlling With Confidence: A ‘How-To’ For Hedge Fund Managers

Dec 22 2014 | 11:52am ET

Hedge funds are increasingly turning to third party services to help with operations...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.