White-Collar Crime

New Indictment Expands Case Against Madoff Ex-Employees, Says Securities Fraud Started in 1970s

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Five former longtime employees at Bernard Madoff’s now-defunct investment firm are facing new charges, in an expanded new indictment. The new indictment is apparently based on information provided by others who have taken pleas in the $20 billion swindle for which their former boss is serving a 150-year prison term.

Onetime operations manager Daniel Bonventre; investment advisors Annette Bongiorno and Joann Crupi; and computer programmers Jerome O’Hara and George Perez were previously indicted in 2010. However, the new charges expand the potential prison time to which they could be sentenced if convicted, contending that the Ponzi scheme that Madoff masterminded dated back to the 1970s, according to Bloomberg and Reuters.

The previous indictment in the Manhattan federal court case dated the scheme to 1992, said U.S. Attorney Preet Bharara. “We will not rest until all the alleged participants and enablers are made to answer for their conduct,” he added, in a written statement.

An arraignment for the five defendants is scheduled Tuesday afternoon.

Bloomberg said their lawyers did not immediately respond to after-hours messages seeking comment.

Although Bernard Madoff’s scheme was previously reported to involve some $65 billion in losses, based on allegations by prosecutors, that amount apparently may have included some paper profits to investors. He pleaded guilty in 2009 to swindling investors out of $20 billion in principal, Bloomberg notes.

Additional and related coverage:

ABAJournal.com: “Madoff Thought Jig Was Up in 2006, But SEC Didn’t Check Trades”

ABAJournal.com: “Madoff: It Wasn’t About the Money”

ABAJournal.com: “Counseling Memos, Pay Cuts, Suspensions, Demotions for 8 SEC Workers Who Missed Monster Madoff Fraud”

ABAJournal.com: “Compliance Chief Peter Madoff Admits Unknowing Role in Brother Bernard Madoff’s Massive Ponzi Scheme”

Updated at 11:47 a.m. to include more information about amount of Bernard Madoff’s Ponzi scheme.

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