March 12 (Bloomberg) -- Bernard Madoff’s securities firm was a modern-day Sodom or Gomorrah, the biblical cities destroyed by God for their immorality, a defense lawyer told jurors in the trial of five of the con man’s ex-aides.
Annette Bongiorno, a former account manager accused of aiding Madoff’s $17 billion Ponzi scheme, is like an innocent dweller of the ancient towns who God killed alongside the guilty to prove a point, her lawyer, Roland Riopelle, said in his closing statement yesterday in federal court in Manhattan.
Riopelle mocked what he called the prosecution’s lack of evidence against Bongiorno by saying the documents and testimony in the five-month trial were akin to an empty chair in the courtroom presented as proof that Angelina Jolie had attended the proceedings wearing a “string bikini.”
“The chair’s right there! It must be so!” said Riopelle, whose client ran Madoff’s New York-based investment advisory business at the center of the fraud.
The trial, which started in October, is the first stemming from Madoff’s swindle, which collapsed after his confession and arrest in December 2008. Bongiorno, hired by Madoff in 1968, when she was 19, claims he took advantage of her lack of training in the industry and duped her into aiding the fraud.
The five former colleagues are accused of conspiring to use fake account statements and false trade confirmations to trick thousands of customers into believing they owned shares in the world’s biggest companies. Instead, their cash was used to enrich insiders and prop-up Madoff’s money-losing operations, according to a 31-count indictment in the case.
Closing arguments are scheduled to continue today. U.S. District Judge Laura Taylor Swain, who is presiding over the trial, said the jury of eight women and four men should begin deliberations by March 14.
Prosecutors said Bongiorno had to have known it was illegal to backdate trades to maximize profit for Madoff’s earliest investors -- a practice she admitted was standard and said she never realized was wrong. Bongiorno also backdated her own trades, including by making it appear she sold her shares in Lehman Brothers Holdings Inc. just before it went bankrupt, the U.S. alleges.
Bongiorno believed the trading was taking place in bulk in Madoff’s legitimate broker-dealer unit, or overseas in his London office, allowing customers to choose from an inventory of trades at an array of prices, Riopelle said.
Riopelle said prosecutors were “obsessed” with Bongiorno’s compensation, focusing evidence on her salary and bonuses in a bid to make jurors envious and resentful toward the former executive. The government ignored evidence that other employees made more than Bongiorno, even though they had worked there a fraction of the time and weren’t involved in the alleged conspiracy, he said.
Bongiorono’s salary and bonuses swelled to more than $600,000 before Madoff’s arrest -- enough for the executive to buy a Bentley, two Mercedes Benzes, a home in New York and a condo in Florida for $6.5 million. Bongiorno had about $50 million in her personal investment advisory account when the firm went bust, though much of that was based on fake trading profit over the years. Most of her assets have been seized.
“The government wants you to be angry and jealous,” Riopelle said. “They want you to focus on the money” because they don’t have real evidence, he said.
Riopelle also reminded the jury that none of the former Madoff employees who pleaded guilty in the case and testified at the trial were aware of the Ponzi scheme, though they admitted guilt for other actions at the firm.
“Not one of them knew what the heck was going on at that place,” Riopelle said.
Prosecutors also misrepresented Bongiorno’s hand-written notes to herself as proof she knew of the fraud, even though it was just her way of remembering what Madoff told her to do, the lawyer said.
Riopelle compared himself to Elizabeth Taylor’s “fifth husband on their wedding night” because he was one of the last defense lawyers to give his closing summation to jurors and was seeking to keep their attention.
The other defendants in the trial are Daniel Bonventre, Madoff’s former operations director who ran the broker-dealer unit; Joann Crupi, who managed large investment-advisory accounts; and computer programmers Jerome O’Hara and George Perez, accused of writing code needed to print millions of pages of fraudulent paperwork.
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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