Saturday, 28 November 2015
Last updated 21 hours ago
Feb 25 2014 | 11:33am ET
For 40 years, Annette Bongiorno back-dated trades in customer accounts. Yesterday, she told the jury considering fraud charges against her that she never questioned the propriety of the practice, because of her faith in Bernard Madoff.
Bongiorno joined the arch-fraudster's firm in 1968, first as a secretary. But she was quickly—and, according to her, unwillingly—promoted through the ranks to run Madoff's investment advisory business.
In that role, she used historical price records to back-date customer records, bringing them to a pre-determined return, almost every day, she said yesterday.
"Did it seem strange to you to be entering them after the fact?" her lawyer, Roland Riopelle, asked her on her first day on the stand.
"No," she replied, adding, "they were always back-dated" and that Madoff's biggest customers would actually request back-dated trades. Bongiorno said she believed Madoff bought securities in bulk "big-block" purchases and then distributed the stock to clients.
"I loved Bernie," Bongiorno continued. "He was like my big brother. I had a lot of respect for him."
Bongiorno is the second of the five Madoff lieutenants on trial for aiding his $65 billion Ponzi scheme to testify in her own defense, following former operations director Daniel Bonventre. The ploy can be a risky one, exposing defendants to cross-examination by prosecutors, but may have already paid off for Bonventre, who saw two of the charges against him dropped late last week, in the midst of his testimony.
The other three defendants—Joann Crupi, Jerome O'Hara and George Perez—have indicated that they will not testify, although both Bonventre and Bongiorno had similar plans until shortly before they were called to the stand.
Bongiorno testified that Madoff discouraged her from seeking further education—she was 19 when she joined the firm—bolstering the defense's claim that Madoff hired less-educated people to assist with the fraud.
"He said, 'everything you need to know, I'll teach you,'" Bongiorno testified. "He didn't want me to go back to school."
He also fought for her services, once going to dinner at her parents house after Bongiorno's old-fashioned father became upset by her long hours and one occasion when she returned home in a car shared with Madoff's brother, Peter. At another point during her early years at the firm, she quit when Madoff hired a secretary, but returned when Madoff met her at a diner in Queens to ask her to come back.
"I only wanted to be a secretary," Bongiorno said. "I didn't like working with numbers. It's not what I wanted to do." But, she said, "he said whatever he had to say to get me to come back."
That touch also explains her loyalty to him, she said, noting that he was able to get her ailing mother into a nursing home that had previously said it had no space. Madoff told Bongiorno, "I made them an offer they couldn't refuse," she said.
Bongiorno also said that Madoff paid for her honeymoon.
"Did you ever commit a fraud?" Riopelle asked his client.
"Never knowingly," Bongiorno, who will return to the stand today, replied.
Prior to Bongiorno's testimony, her lawyer called former Madoff investor and longtime Bongiorno friend Isaac Maya. Despite the scandal, Maya said that Bongiorno is "a very honest person, a credible person" who "admired" her boss.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…