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Madoff Five Trial Judge Cuts Jury to 11 After One Falls Ill

The jury deciding the fate of five of Bernard Madoff’s former employees charged with aiding his $17.5 billion Ponzi scheme will resume deliberations today with 11 members after one fell ill and was dismissed by a judge.

The juror’s health isn’t likely to improve soon and replacing her with one of four alternates who attended the five-month trial would have been disruptive because deliberations were under way for two days before the illness, U.S. District Judge Laura Taylor Swain in Manhattan said yesterday. The remaining jurors will be told of the change today, she said.

“I believe it is the efficient way to go and is in the best interest of justice,” Swain told prosecutors and defense lawyers who agreed to the plan before the hearing started. The jurors have already made “substantial progress,” she said.

The trial, which started in October, is the first stemming from the Ponzi scheme, the largest in U.S. history. Madoff confessed to the fraud in his investment-advisory business and was arrested in December 2008. The defendants, who worked for Madoff for decades, claim they were duped by an expert con man who tricked them into aiding the swindle and assisting with fake securities trades and falsified documents.

Reduced Jury

A reduced jury isn’t usually helpful for the defense, said Stuart Slotnick, who represents defendants accused of white-collar crimes and isn’t involved in the case.

“The more jurors the better because all jurors have to agree upon a criminal verdict beyond a reasonable doubt,” said Slotnick, with Buchanan Ingersoll & Rooney PC in New York.

At least one defense lawyer in the case, Eric Breslin, said at a hearing yesterday, before the ruling, that there were “significant faultlines” among the defense regarding whether the ill juror should be replaced.

Agreeing to the reduction was a “strategic decision” that will benefit at least some of the five defendants, Roland Riopelle, the lawyer for Annette Bongiorno, who ran the investment advisory unit, said yesterday after court.

“Our view is we want a verdict; we don’t want a mistrial,” Riopelle said. Using an alternate “can be very disruptive.”

Family Conflict

One alternate juror was used on the last day of the trial - - before deliberations started -- to replace a juror who had to leave due to a scheduling conflict involving his family. Another alternate was dismissed during the trial after she had an asthma attack and an ambulance was called. The other alternates were dismissed and advised to stand by in case they were needed and barred from talking to the media.

The defendants are charged with using millions of fake account statements and trade confirmations to trick customers of Madoff’s investment firm into believing they owned shares in the world’s biggest companies.

The other defendants are Joann Crupi, who managed large accounts; Daniel Bonventre, the ex-operations chief of Madoff’s broker-dealer; and computer programmers George Perez and Jerome O’Hara, accused of automating the scam as the scheme expanded in the 1990s.

For decades, the victims’ money was used to enrich the firm’s wealthiest clients, give employees exorbitant pay and keep the scheme going, the government alleged.

During the five-month criminal trial, prosecutors claimed each defendant was essential to perpetrating the fraud.

If convicted, the five Madoff aides face as long as 20 years in prison on the most serious count of securities fraud. Madoff pleaded guilty but declined to cooperate with the government. He is serving a 150-year prison sentence.

The case is U.S. v. O’Hara, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net David E. Rovella, Fred Strasser

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