Bernard Madoff's inner circle goes on trial

Mon Oct 7, 2013 1:38pm EDT
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By Bernard Vaughan

NEW YORK (Reuters) - Madoff did not do it alone.

That is the message prosecutors will pound home as five of Bernard Madoff's long-time employees go on trial this week accused of enabling his $65 billion Ponzi scheme.

Madoff pleaded guilty in 2009 to defrauding investors at Bernard L. Madoff Investment Securities LLC, which imploded in late 2008. He is serving a 150-year prison sentence.

Madoff said he acted alone, but prosecutors have since charged 15 of his associates.

The five who go on trial on Tuesday were paid handsomely to help Madoff dupe investors and regulators, prosecutors allege. All five have pleaded not guilty and some of them have said in court filings that they did not know about the fraud.

In an indictment in July, prosecutors said the five employees created false records and fabricated exotic-sounding transactions to explain the firm's consistent high returns.

Whether they touted a "convertible arbitrage strategy," a "split-strike conversion strategy" or no particular strategy, "the truth was that Madoff and his co-conspirators - with very rare exception - were not making any trades at all," the indictment said.

The defendants are Daniel Bonventre, the director of operations for the firm's back office, who started working for Madoff around 1968; Annette Bongiorno and Joann Crupi, who managed clients' investment accounts; and computer programmers Jerome O'Hara and George Perez, whom prosecutors say helped the firm deceive the U.S. Securities and Exchange Commission and Internal Revenue Service, among others.   Continued...

Convicted swindler Bernard Madoff (C) enters his plea of guilty in Manhattan Federal Court in this courtroom drawing March 12, 2009. REUTERS/Shirley Shepard