Madoff Ex-Aides’ Fraud Trial ‘Juiced Up,’ Lawyer SaysErik Larson
The trial of five former aides to Bernard Madoff was “juiced up” with a flirtatious e-mail taken out of context and two innocent checks to the con man’s wife that were used as evidence, a defense lawyer said.
When the U.S. showed jurors a 2007 e-mail from one of the defendants, Daniel Bonventre, to his wife stating, “You don’t know this, but we have people here who read all the e-mails,” prosecutors left out details that revealed its innocence, the lawyer, Andrew Frisch, said yesterday in his closing statement in Manhattan federal court.
The message from Bonventre, Madoff’s ex-director of operations, was in response to something “amorous” his wife had written, Frisch said. “If it’s so obvious Dan is guilty, why do they do this? Why do they juice it up?” he said to jurors.
The criminal trial, which started in October, is the first stemming from Madoff’s $17 billion Ponzi scheme, which collapsed after his confession and arrest in December 2008.
The e-mail is just one example of the speculative nature of the government’s evidence against Bonventre, who never worked in Madoff’s investment advisory unit, where the fraud took place, and didn’t interact with its customers or regulators, Frisch said.
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.
The U.S. alleges Bonventre helped hide Madoff’s investment advisory unit from regulators and funneled about $800 million in customer cash to finance the broker-dealer unit he oversaw.
Frisch showed jurors copies of two $40,000 checks Bonventre wrote to Madoff in 2004, which prosecutors used as evidence in the trial. Madoff had signed the checks over to his wife Ruth’s bank account.
The government presented the checks without offering proof of what they meant in order to insinuate there was “some elaborate, nefarious agreement” between Bonventre and Ruth Madoff, who shared the task of managing the checking account for the investment-advisory business, Frisch said.
Bonventre’s explanation that the checks were for repaying Madoff for personal expenses on his corporate credit card were ignored by prosecutors, Frisch said.
“It’s another example of creating a cloud of suspicion from nothing,” Frisch said.
The U.S. threatened former Madoff controller Enrica Cotellessa-Pitz to secure a guilty plea and have her testify against the five defendants, Frisch said.
When she testified in November, she “was like a deer in headlights” on the stand, struggling to answer questions because she had to go against her natural inclination to tell the truth and lie to please the government, Frisch said. Cotellessa-Pitz was “in anguish” on the stand, Frisch said. “She’s not to blame for buckling to the pressure.”
Bonventre was also tricked by Madoff like thousands of others, lulled into a false sense of security by the firm’s success and the praise he received in the industry, Frisch said.
“Madoff was secretive, demanded confidentiality and, unbeknownst to the world, was a pathological liar who duped sophisticated investors, well-known businesses and celebrities,” Frisch said.
When Bonventre testified at trial, he told jurors Madoff could be a bully who mocked and ridiculed people and would say in anger that “he was surrounded by idiots and assassins,” Frisch said.
Frisch, the last of five defense lawyers to give a closing summation, joined the other four in condemning the government’s key witness, Madoff’s former finance chief, Frank DiPascali, who pleaded guilty in the case and agreed to testify against his onetime colleagues.
DiPascali is a “toxic” witness who implicated Bonventre and the others in a bid to please prosecutors and spend less time behind bars, Frisch said.
DiPascali, who faces a maximum term of 125 years, lied on the witness stand when he said he testified in a related civil case filed by victims of the fraud, Frisch said. In fact, Frisch said, DiPascali refused to answer any questions in that case, undermining his claim to care about the victims of the fraud.
Frisch said the prosecution failed to offer witnesses from the U.S. Securities and Exchange Commission, which had a lot of information about the fraud as a result of being duped by Madoff during audits.
The SEC was a “no show” at the trial, Frisch said. “What are they hiding?”
The closing arguments finished yesterday. The prosecution will give a rebuttal today, followed by as long as a day of legal instructions for the jury from U.S. District Judge Laura Taylor Swain, who is overseeing the trial. Swain said deliberations will probably begin tomorrow.
The case is U.S. v. O’Hara, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).