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NEW YORK (Reuters) - Members of Bernard Madoff's inner circle indulged in expensive wine, cruises and jaunts to Las Vegas, all paid for by his investment firm, prosecutors said on Monday in a trial of five former long-time Madoff associates.
The expenses were listed on the corporate credit card statement of portfolio manager Joann Crupi, one of five people on trial in New York accused of helping Madoff pull off a fraud that cost investors an estimated $19 billion.
Assistant U.S. Attorney John Zach showed jurors Crupi's corporate credit card statements for 2004, 2005 and 2006, noting that she took cruises and trips to Las Vegas with family members and bought wine at Wine Library in Springfield, New Jersey, where she spent almost $2,000 on one occasion.
Zach asked witness Charlene White, a former employee at Bernard Madoff Securities LLC, whether she observed any behavior by Crupi that would have explained the expenditures as legitimate business expenses.
"In November of 2005 ... did you observe Ms. Crupi passing out almost $2,000 of wine for a Thanksgiving celebration?" Zach asked White.
Zach likewise asked White if events at work could explain the cruises or trips to Las Vegas.
"No," said White, who began working at Madoff's firm in 1993.
Crupi's lawyer, Eric Breslin, objected several times to Zach's questioning of White, the second witness to testify in a trial expected to last as long as five months.
White, a former data entry worker, was not in a position to know what was a legitimate business expense and what was not, Breslin told U.S. District Judge Laura Taylor Swain after the jury was excused for lunch.
Swain ruled that Zach could continue to ask her if she observed wine from Crupi in the office, but not whether the expenses were legitimate.
In addition to Crupi, the defendants include Daniel Bonventre, the director of operations for the firm; Annette Bongiorno, another portfolio manager; and Jerome O'Hara and George Perez, both computer programmers.
All five pleaded not guilty and their lawyers have said they did not know about Madoff's scheme or were merely puppets under Madoff's spell.
Madoff, 75, is serving a 150-year prison sentence after pleading guilty in 2009 to defrauding investors in his investment firm.
The case is USA v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-0228.
Reporting by Bernard Vaughan; Editing by Richard Chang