Madoff Lieutenants Guilty Of Aiding Fraud

Mar 24 2014 | 4:15pm ET

Five former Bernard Madoff employees were convicted today of aiding and abetting the fraudster’s $65 billion Ponzi scheme.

More than five years after Madoff’s arrest, and following six long months of testimony, it took the jury just four days to find Annette Bongiorno, Daniel Bonventre, Joann Crupi, Jerome O’Hara and George Perez guilty of conspiracy and securities fraud. Each of the five face decades in prison when sentenced on the 31 combined counts against them.

Prosecutors successfully argued that the five knowingly played crucial roles in perpetrating and covering up Madoff’s fraud, doctoring documents and records—or creating phony ones outright. Defense lawyers claimed that their clients were unaware that either they or Madoff were doing anything wrong, echoing Madoff’s own claims to have committed the crimes on his own.

Bonventre was Madoff’s operations director, Bongiorno and Crupi portfolio managers, and O’Hara and Perez computer programmers. They are the first five people to face trial on charges stemming from the Madoff Ponzi scheme.

“These convictions, along with the prior guilty pleas of nine other defendants, demonstrate what we have believed from the earliest stages of the investigation: This largest-ever Ponzi scheme could not have been the work of one person,” U.S. Attorney Preet Bharara said. “The trial established that the Madoff fraud began at least as far back as the early 1970s, decades before it came to light. These defendants each played an important role in carrying out the charade, propping it up, and concealing it from regulators, auditors, taxing authorities, lenders and investors.”

The trial hinged on the testimony of Frank DiPascali, Madoff’s former CFO. A cooperating witness who has pleaded guilty to fraud, DiPascali spent more than a month on the stand, walking the jury through the operations of Madoff’s firm and fraud, and the role played by each of the five defendants in them. Their conviction means that 12 people, including Madoff, his brother and DiPascali, have either pleaded guilty or been convicted in the case.


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

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

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.