Madoff Ex-Aides’ Jury Deliberates for Second Day in N.Y.Erik Larson
A federal jury in Manhattan continued deliberations for a second day in the trial of five former aides to Bernard Madoff accused of aiding his $17.5 billion Ponzi scheme -- the biggest in U.S. history.
The group allegedly conspired to use millions of fake account statements and false trade confirmations for decades to trick customers of Madoff’s investment advisory business 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 in the first criminal trial of Madoff employees. It lasted five months.
“Given the length of the trial and the number of defendants, I would expect that the jury will deliberate for days as it sifts through the evidence,” said Richard Scheff, a former federal prosecutor who works on white-collar criminal cases. “Juries are conscientious, want to do their job the right way and do the right thing.”
Madoff, 75, admitted to the fraud and was arrested on Dec. 11, 2008, when he ran out of money to pay customer withdrawals. He pleaded guilty in 2009 and is serving a 150-year sentence in a federal prison in North Carolina.
The defendants said they were duped by Madoff into carrying out his fraud because they trusted him and believed he was respected by regulators and his peers in the industry.
Defense lawyers said in their closing statements to the jury that the U.S. didn’t prove its case and relied on speculation and witnesses who lied, including former colleagues who pleaded guilty in the fraud.
The defendants are Annette Bongiorno, who ran the investment advisory unit at the center of the fraud; Joann Crupi, who managed large accounts; Daniel Bonventre, the ex-operations chief of Madoff’s broker-dealer; and computer programmers George Perez and Jerome O’Hara, accused of automating the scam as the scheme expanded in the 1990s.
Jurors yesterday gave handwritten notes to U.S. District Judge Laura Taylor Swain, who oversaw the trial. They asked for a list of the required elements to prove each count, according to copies of the messages filed today in court. They also asked for copies of evidence and testimony.
In one note they asked to see a transcript of the testimony of Bonventre, who took the stand in his own defense, and Madoff’s former controller, Enrica Cotellessa-Pitz, who pleaded guilty and testified against him.
Jurors also asked for the testimony of Madoff’s former finance chief, Frank DiPascali, who pleaded guilty and took the stand for 17 days to give evidence against all five defendants in a bid for leniency when he’s sentenced.
The jury also asked for highlighter pens and salt and pepper for their meals.
If convicted, the defendants’ sentences might 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 predetermined 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, prosecutors said.
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 from Madoff after realizing how central they were to the fraud, prosecutors said.
The case is U.S. v. O’Hara, 10-cr-00228, U.S. District Court, Southern District of New York (Manhattan).