Fraud Trial Begins Today For 5 Former Madoff Employees

Posted On Tuesday, October 8, 2013

The trial of five former employees of Bernard Madoff began today in a Manhattan federal courtroom.  The employees, all of whom allegedly furthered Madoff’s Ponzi scheme, are Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and two computer programmers, Jerome O’Hara and George Perez.  In 17-count superseding indictment found here, the five face a variety of federal charges related the Ponzi scheme, including securities fraud, records falsification, and tax evasion.

The government has alleged that Madoff manufactured fictitious trades and phantom accounts with help from Ms. Bongiorno as well as the other four defendants.  Bongiorno has been described as Madoff’s secretary but also worked in Madoff’s investment business for 40 years managing hundreds of investment accounts, which as of 2008, ostensibly had a cumulative balance of $8.5 billion dollars.  The government also claims that the defendants created false documents which were ultimately distributed as accountant statements to investors.  These statements allegedly employed complicated Wall Street terminology to suggest that Madoff was using sophisticated techniques to generate the significant profits.

In March 2009, Madoff pled guilty to eleven felony charges related to his role in the scheme reportedly involving $65 billion.  In June 2009, he was sentenced to 150 years imprisonment and is presently incarcerated at a federal institution in North Carolina.  While Madoff claimed during his guilty plea to have acted alone, federal prosecutors disagree and hope to prove otherwise in the ongoing trial of the five defendants.  The trial is expected to last up to five months.