Bernard Madoff’s inner circle moved a step closer to learning its fate as a jury prepared to decide whether the group’s members aided a $17.5 billion Ponzi scheme in the first criminal trial stemming from the fraud.
Closing arguments ended today, and U.S. District Judge Laura Taylor Swain in Manhattan, who has overseen the trial of five ex-Madoff aides since October, began giving the jury legal instructions. Jurors will begin deliberating March 17, she said.
“If you consider all of the evidence for this case, there is only one verdict for these defendants that is consistent with common sense and the law,” Assistant U.S. Attorney Randall Jackson said in his final remarks to jurors. “That verdict is guilty.”
The five are accused in a 31-count indictment of conspiring to use millions of fake account statements and false trade confirmations to trick customers into believing they owned shares in the world’s biggest companies.
Instead, prosecutors said, the victims’ money was used to enrich the firm’s wealthiest clients, give employees exorbitant pay and keep the Ponzi scheme in business. Each defendant was essential to keeping the fraud going, prosecutors said.
Jackson yesterday compared the five ex-Madoff aides to children who discovered Santa Claus was fake and pretended to believe in him anyway to keep getting gifts. Today, he likened them to restaurant employees who served cat meat instead of the beef they had on the menu.
The people who “set computerized cat traps in alleyways” and worked in the kitchen “cutting up cats” are as guilty as the person who came up with the scheme, Jackson said.
At the end of his closing argument, Jackson reminded jurors that the room in which they assembled in October is named for the late Constance Baker Motley, a former civil rights activist who was the first black woman named to the federal court bench. The prosecutor urged the jurors, who are mostly racial minorities, to take the case as seriously as the judge would.
After the jury was dismissed, Larry Krantz, the lawyer for former Madoff computer programmer George Perez, complained that Jackson had added a “racial subtext” to the case. Swain, who is black and was once a law clerk to Baker Motley, noted the objection for the record. Jackson, also black, didn’t respond.
Swain complained about the length of the prosecution’s rebuttal, saying the government’s “aggressive strategy” in interpreting evidence triggered frequent defense objections. She repeatedly sustained defense objections in recent days.
Defense lawyers said in their closings that the U.S. didn’t prove its case and relied on speculation and witnesses who lied.
On trial are Annette Bongiorno and Joann Crupi, who managed accounts for Madoff; Daniel Bonventre, who was director of operations; and computer programmers Perez and Jerome O’Hara.
If convicted, the defendants’ possible sentences may range from 58 years in prison for Bongiorno to as long as about 200 years for Bonventre, according to prosecutors.
Prosecutors allege that Bongiorno, who they say got rich off the fraud, is feigning ignorance and knew that backdating trades to reach set returns was wrong.
Crupi, who worked with Bongiorno managing large accounts, also backdated trades and participated in bank fraud by lying about the value of accounts on loan paperwork, according to prosecutors.
Perez and O’Hara wrote computer code that had no purpose other than to make fake documents look real and alter account statements, prosecutors said. The men, who joined the firm in the 1990s, extorted higher pay and bonuses out of Madoff after realizing how central they were to the fraud, prosecutors said.
Bonventre, who joined Madoff in the 1960s as one of his first employees, siphoned about $800 million in customer money from the investment business to cover losses in the broker-dealer unit he ran, prosecutors said. He oversaw the firm’s phony ledger, they said.
The five said they were duped by Madoff into unwittingly carrying out his fraud because they trusted him and believed he was respected by regulators and the industry.
Madoff, 75, pleaded guilty to fraud in 2009 and is serving a 150-year sentence in a federal prison on North Carolina. He has said he carried out the fraud alone.
The case is U.S. v. O’Hara, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).