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Ex-Madoff Workers Face More Charges in Fraud Indictment

Ex-Madoff Workers Face New Charges in Fraud Dating to 1970s
Daniel Bonventre, a former employee at Bernard L. Madoff Investment Securities LLC, exits federal court in New York. Photographer: Louis Lanzano/Bloomberg

Five longtime employees of Bernard Madoff’s former investment firm face more charges related to the jailed con man’s Ponzi scheme, which the government claims got its start in the 1970s.

U.S. Attorney Preet Bharara in Manhattan yesterday released a revised indictment expanding the charges against former Madoff employees Daniel Bonventre, Annette Bongiorno, Joann Crupi, Jerome O’Hara and George Perez. The indictment adds to the 17 criminal counts filed against the former employees in November 2010, for a total of 33 counts.

Bonventre, 65, and Bongiorno, 64, worked for Madoff for 40 years, with Bongiorno rising to the level of supervisor and account manager. Crupi, 51, an employee since 1983, tracked daily bank account activity, prosecutors said. Perez, 46 and O’Hara, 49, started at the firm in the early 1990s.

Madoff, 74, pleaded guilty to fraud in 2009 for cheating investors out of $20 billion in principal. He’s serving a 150-year term in federal prison in North Carolina.

The defendants are scheduled to be arraigned on the new charges at a hearing today before U.S. District Judge Laura Taylor Swain, Bharara’s office said in the statement.

Additional Pressure

The new charges put additional pressure on the former employees, who have pleaded not guilty in the case. New charges against Bonventre and Crupi include bank fraud, which is punishable by as much as 30 years in prison.

The new indictment contains 22 counts against Bonventre, including conspiracy, securities fraud and filing false tax returns. Bongiorno is charged with 10 counts including conspiracy, securities fraud and tax evasion. Crupi faces 13 counts including conspiracy, securities fraud, falsifying records and tax evasion.

O’Hara and Perez each face eight counts of conspiracy, securities fraud and falsifying records.

The new charges appear to include information from former Madoff employees who pleaded guilty and are cooperating with the government’s investigation. Seven people, in addition to Bernard Madoff, have pleaded guilty.

Former Chief Financial Officer Frank DiPascali, who began working for Madoff in 1975, Madoff’s former accountant David Friehling, former employees Craig Kugel, David Kugel, Enrica Cotellessa-Pitz and Eric Lipkin have pleaded guilty. In June, Peter Madoff, Bernard Madoff’s brother, pleaded guilty. Peter Madoff didn’t agree to cooperate. He’s scheduled to be sentenced next month. Irwin Lipkin, hired in 1964, plans to plead guilty in the case, according to prosecutors.

Bonventre’s lawyer, Andrew Frisch; Bongiorno’s lawyer, Maurice Sercarz; Crupi’s lawyer, Eric Breslin; O’Hara’s lawyer, Gordon Mehler; and Perez’s lawyer, Larry Krantz, didn’t immediately return voice-mail messages yesterday seeking comment on the new charges after regular business hours.

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

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