Madoff's $17B fraud began in 1970s, witness says in testimony against former colleagues
As testimony rolls on in the first criminal trial concerning Bernard L. Madoff’s massive $17 billion Ponzi scheme, at least one high-level ex-employee is saying that the fake trades on which his Manhattan investment firm was built dated back to the 1970s.
For more than a decade, officials have said, the company into which Madoff’s victims entrusted their savings executed no trades whatsoever. At issue in the federal trial in Manhattan is whether the firm’s defendant former workers had to know, under the totality of the circumstances, that a scam was ongoing, Bloomberg reports.
Former finance chief Frank DiPascali, who in 2009 took a plea to fraud, conspiracy, money laundering and other counts, testified Monday that the fake trades had been ongoing “for as long as I could remember.” He began working for Madoff in 1975, when he was 19 years old.
DiPascali also noted, however, that Madoff had a cover story he told his workers “about deals he had going on Europe,” the Associated Press reports.
Defense lawyers contend that DiPascali was Madoff’s partner in crime.
“The evidence will show DiPascali is a pathological liar, and the government’s case relies on you believing DiPascali,” said Andrew Frisch in his opening statement. “And now instead of Madoff, DiPascali’s bosses are the government lawyers at this table.”
USA Today also has a story.
Reported figures for the total amount of Madoff’s fraud have topped $68 billion, but it turns out that those figures included paper profits on nonexistent trades. The actual principal amount is now given as about $17 billion.
Arrested in 2008, Madoff relatively quickly agreed to a plea deal. He is imprisoned in North Carolina, where he is serving a 150-year federal sentence.
Related coverage:
ABAJournal.com: “New Indictment Expands Case Against Madoff Ex-Employees, Says Securities Fraud Started in 1970s”
ABAJournal.com: “Peter Madoff Gets 10 Years, Is Ordered to Pay $143B, for His Role in Brother’s Ponzi Scheme”
ABAJournal.com: “2nd Circuit blasts SEC for ‘regrettable inaction’ in massive Madoff fraud, but nixes victim suit”
ABAJournal.com: “Law firm’s latest bill for Madoff liquidation is $50M, bringing total since his 2008 arrest to $440M”
