Monday, October 7, 2013

Bernie Madoff's Inner Circle hits the courts (Reuters)

I have followed this story rather closely since it hit the newswires in 2008 (Dec 12, 2008 - My Name is Bernie Madoff, and I am a cheat).  There have been many developments over the course of the past several years, including the suicide of one of his son's, and that of the son of his accountant.  A true tragedy in every sense of the term.  Meanwhile, Mr. Madoff and his brother, Peter, are living out their sentences in prison.  Ruth, Bernie's wife, has not been in the news of late, but their other son, Andrew continues to battle stage 4 cancer.  It is a truly sad tale of capitalism run amok through broken trust and confidence of the most serious kind.

While Bernie claimed to the bitter end that he acted alone, prosecutors have files charges against 15 of his closed colleagues.  The five noted in this story appear to be mostly back office, operations staff that seemingly could not have not known.  But with the level of deception and deceit that was carried out over years, maybe Mr. Madoff was just that convincing.

The trial is expected to last five months.  The prosecutors will have to prove criminal intent, and based on mostly circumstantial evidence, that could be significant a challenge.

Bernard Madoff's inner circle goes on trial

Mon Oct 7, 2013 8:06am EDT
Convicted swindler Bernard Madoff (C) enters his plea of guilty in Manhattan Federal Court in this courtroom drawing March 12, 2009. REUTERS/Shirley Shepard
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By Bernard Vaughan
NEW YORK (Reuters) - Madoff did not do it alone.
That is the message prosecutors will pound home as five of Bernard Madoff's long-time employees go on trial this week accused of enabling his $65 billion Ponzi scheme.
Madoff pleaded guilty in 2009 to defrauding investors at Bernard L. Madoff Investment Securities LLC, which imploded in late 2008. He is serving a 150-year prison sentence.
Madoff said he acted alone, but prosecutors have since charged 15 of his associates.
The five who go on trial on Tuesday were paid handsomely to help Madoff dupe investors and regulators, prosecutors allege. All five have pleaded not guilty and some of them have said in court filings that they did not know about the fraud.
In an indictment in July, prosecutors said the five employees created false records and fabricated exotic-sounding transactions to explain the firm's consistent high returns.
Whether they touted a "convertible arbitrage strategy," a "split-strike conversion strategy" or no particular strategy, "the truth was that Madoff and his co-conspirators - with very rare exception - were not making any trades at all," the indictment said.
The defendants are Daniel Bonventre, the director of operations for the firm's back office, who started working for Madoff around 1968; Annette Bongiorno and Joann Crupi, who managed clients' investment accounts; and computer programmers Jerome O'Hara and George Perez, whom prosecutors say helped the firm deceive the U.S. Securities and Exchange Commission and Internal Revenue Service, among others.  Continued...

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