The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king go to trial today as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds.
The trial in federal court in Manhattan is expected to last up to five months and feature the unveiling of the government’s prize witness — Frank DiPascali, Madoff’s former chief financial officer.
The government is counting on him to explain to jurors the roles each defendant played in a fraud that prosecutors say stretched back into the early 1970s and consumed nearly US$20 billion invested by thousands of victims, including retirees, charities, school trusts and even Holocaust survivors. Much of the money has since been recovered by a court-appointed trustee.
Amid a collapsing economy, Madoff was forced to reveal his fraud in December 2008, acknowledging that accounts he had told investors were worth nearly US$68 billion only days earlier actually held only a few hundred million dollars. He pleaded guilty to fraud charges a few months later and was sentenced to a 150-year prison term in Butner, North Carolina.
Madoff, 75, claimed during his guilty plea that he acted alone, but the government says that was not true and will use the trial to try to prove it.
Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and computer programmers Jerome O’Hara and George Perez. All have pleaded not guilty. Six others have pleaded guilty in the case, including DiPascali.
Pretrial maneuvers included an effort by prosecutors to exclude from evidence any mention of the sexual and romantic activities that seemed to permeate Madoff’s offices when he was perceived as a high-flying Wall Street guru, so smart that he could ensure double-digit returns to his investors even when the economy was flat or in decline.
MULTI-DECADE FRAUD
“Suffice it to say that the government’s investigation has revealed that, over the course of the multi-decade fraud alleged in the indictment, a number of Madoff Securities employees and customers — including expected witnesses, defendants and others — were engaged in romantic or sexual relationships,” prosecutors said in court papers.
The government said Madoff himself was engaged in a love triangle with one of the defendants.
US District Judge Laura Taylor Swain, a calm, thoughtful presence, has not yet said for certain whether the salacious allegations can be aired in the courtroom.
Yet, she has excluded much of the evidence of the lavish lifestyles enjoyed by the defendants as Madoff splashed them with tens of millions of dollars even as the Ponzi scheme grew closer to its abrupt culmination.
Jurors will not hear about Bongiorno’s Mercedes or her vacation home or her shopping forays to pricey department stores.
‘WALL STREET GREED’
As her lawyers wrote in persuading the judge to exclude personal expenses: “The government seeks to tap into the public’s generalized anger at ‘Wall Street Greed,’ which has the potential to result in an unjust verdict fabricated’ from the jury’s emotional response to proof that is not tethered to any element of the charges against Ms Bongiorno.”
Crupi’s lawyers made a similar argument, saying: “Whether she purchased a beach house or not, went on vacation or not, bought a deluxe refrigerator or not, proves nothing about what happened ... or what Ms Crupi knew.”
Still, the judge is allowing into evidence information about the beach house and a Caribbean vacation for another defendant because Madoff’s firm directly helped fund them.
And the first trial may not be the last.
Just days ago, prosecutors charged a 77-year-old accounting executive, saying he directed others since at least the early 1990s to falsify records and help conceal Madoff’s fraud. He, too, has pleaded not guilty.
CONFRONTATION: The water cannon attack was the second this month on the Philippine supply boat ‘Unaizah May 4,’ after an incident on March 5 The China Coast Guard yesterday morning blocked a Philippine supply vessel and damaged it with water cannons near a reef off the Southeast Asian country, the Philippines said. The Philippine military released video of what it said was a nearly hour-long attack off the Second Thomas Shoal (Renai Shoal, 仁愛暗沙) in the contested South China Sea, where Chinese ships have unleashed water cannons and collided with Philippine vessels in similar standoffs in the past few months. The China Coast Guard and other vessels “once again harassed, blocked, deployed water cannons, and executed dangerous maneuvers” against a routine rotation and resupply mission to
GLOBAL COMBAT AIR PROGRAM: The potential purchasers would be limited to the 15 nations with which Tokyo has signed defense partnership and equipment transfer deals Japan’s Cabinet yesterday approved a plan to sell future next-generation fighter jets that it is developing with the UK and Italy to other nations, in the latest move away from the country’s post-World War II pacifist principles. The contentious decision to allow international arms sales is expected to help secure Japan’s role in the joint fighter jet project, and is part of a move to build up the Japanese arms industry and bolster its role in global security. The Cabinet also endorsed a revision to Japan’s arms equipment and technology transfer guidelines to allow coproduced lethal weapons to be sold to nations
‘POLITICAL EARTHQUAKE’: Leo Varadkar said he was ‘no longer the best person’ to lead the nation and was stepping down for political, as well as personal, reasons Leo Varadkar on Wednesday announced that he was stepping down as Ireland’s prime minister and leader of the Fine Gael party in the governing coalition, citing “personal and political” reasons. Pundits called the surprise move, just 10 weeks before Ireland holds European Parliament and local elections, a “political earthquake.” A general election has to be held within a year. Irish Deputy Prime Minister Micheal Martin, leader of Fianna Fail, the main coalition partner, said Varadkar’s announcement was “unexpected,” but added that he expected the government to run its full term. An emotional Varadkar, who is in his second stint as prime minister and at
Thousands of devotees, some in a state of trance, gathered at a Buddhist temple on the outskirts of Bangkok renowned for sacred tattoos known as Sak Yant, paying their respects to a revered monk who mastered the practice and seeking purification. The gathering at Wat Bang Phra Buddhist temple is part of a Thai Wai Khru ritual in which devotees pay homage to Luang Phor Pern, the temple’s formal abbot, who died in 2002. He had a reputation for refining and popularizing the temple’s Sak Yant tattoo style. The idea that tattoos confer magical powers has existed in many parts of Asia