Madoff Controller Irwin Lipkin to Plead Guilty, U.S. Says

Irwin Lipkin, one of the first employees of Bernard Madoff’s defunct investment firm, is expected to plead guilty to charges of conspiracy and making false statements, the U.S. said.

Lipkin will enter a plea at a hearing in Manhattan federal court, prosecutors in the office of U.S. Attorney Preet Bharara told a federal judge in a letter yesterday.

Lipkin will be the ninth former Madoff employee to plead guilty to criminal charges. He faces as many as five years in prison on each of the two criminal counts, according to the letter signed by assistant U.S. attorneys Julian Moore, Lisa Baroni and Matthew Schwartz. Lipkin’s lawyer, David Richman, declined to comment on the letter.

Lipkin’s son, Eric Lipkin, pleaded guilty to six criminal counts in June 2011, admitting he falsified documents to show non-existent holdings in accounts and to pay people for no-show jobs. Eric Lipkin, who is cooperating with the government’s investigation into the Madoff fraud, faces as many as 70 years in prison when he’s sentenced.

Irving Picard, the New York lawyer appointed to liquidate Madoff’s former firm, sued Eric and Irwin Lipkin and their families in 2010 to recover $9.2 million in money he claims they received from Madoff’s fraud.

Madoff hired Irwin Lipkin in 1964 as one of his firm’s first employees, according to Picard. Madoff continued paying him for several years after he had retired to Florida, Picard said.

‘Like Family’

“Irwin considered himself to be like family to Madoff, and over the years, Irwin served as the controller in Madoff’s inner circle of core employees,” Picard said in his complaint, adding that Irwin referred to Madoff in a 1998 letter as “the brother I never had.”

In June, Peter Madoff pleaded guilty to helping his brother commit the biggest Ponzi scheme in U.S. history. Bernard Madoff, who was arrested in December 2008, pleaded guilty and is serving a 150-year sentence in federal prison in North Carolina.

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

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