Posted Mar 10, 2009 12:03 am CDT
As a plea deal in the federal criminal case against Bernard Madoff appears imminent, several people who worked for him reportedly are talking with prosecutors about how he allegedly operated a $50 billion Ponzi scheme.
Under proffer agreements protecting them from prosecution if they tell the truth, two assistants told Manhattan prosecutors that they generated what are believed to be fake “tickets” reflecting blue-chip stock trades that never took place, reports the Wall Street Journal (sub. req.).
The two allegedly acted under the direction of a 40-year Madoff veteran as they researched daily stock prices, the newspaper says. The veteran, Annette Bongiorno, who has not been charged in the case, could not be reached for comment.
As discussed in earlier ABAJournal.com posts, it now appears that there may have been no actual trades whatsoever by the Madoff operation for more than a decade, even as the U.S. Securities and Exchange Commission and other regulators reportedly conducted investigations that found no significant wrongdoing.
It appears that the alleged Ponzi scheme dated back at least to the 1980s, and perhaps even earlier, the Wall Street Journal says.
“This is how it was done—there were all these thousands and thousands of trade confirmations purporting to sort of signify that there were trades that occurred and we know now that, obviously, there weren’t trades at least for 13 years and probably a lot longer than that—maybe decades,” WSJ reporter Amir Efrati tells the CBS News Econwatch blog.
Madoff’s wife, Ruth, who is seeking to keep some $70 million worth of claimed personal assets separate from her husband’s seized assets, plans to retain her own counsel, reports Bloomberg. The name of the lawyer who will represent her isn’t yet known.
Meanwhile, several parties, including the whistle-blower who unsuccessfully sought for years to persuade the SEC that something was amiss with Bernard Madoff’s operation, are calling for the formation of an international financial court, according to Reuters. The idea is to create an alternative forum that might be especially appropriate for addressing financial crimes that transcend national boundaries.
ABAJournal.com: “Madoff Guilty Plea in $50B Claimed Fraud Case is Expected Soon, N.Y. Times Says”
Hedge Fund: “Madoff Whistleblower Lawyer Calls For New Finance Court”
New York Daily News: ” Bernard Madoff’s victims ready to face down accused Ponzi swindler in court”