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.
HOLLYWOOD IN TURMOIL: Mandy Moore, Paris Hilton and Cary Elwes lost properties to the flames, while awards events planned for this week have been delayed Fires burning in and around Los Angeles have claimed the homes of numerous celebrities, including Billy Crystal, Mandy Moore and Paris Hilton, and led to sweeping disruptions of entertainment events, while at least five people have died. Three awards ceremonies planned for this weekend have been postponed. Next week’s Oscar nominations have been delayed, while tens of thousands of city residents had been displaced and were awaiting word on whether their homes survived the flames — some of them the city’s most famous denizens. More than 1,900 structures had been destroyed and the number was expected to increase. More than 130,000 people
THE ‘MONSTER’: The Philippines on Saturday sent a vessel to confront a 12,000-tonne Chinese ship that had entered its exclusive economic zone The Philippines yesterday said it deployed a coast guard ship to challenge Chinese patrol boats attempting to “alter the existing status quo” of the disputed South China Sea. Philippine Coast Guard spokesman Commodore Jay Tarriela said Chinese patrol ships had this year come as close as 60 nautical miles (111km) west of the main Philippine island of Luzon. “Their goal is to normalize such deployments, and if these actions go unnoticed and unchallenged, it will enable them to alter the existing status quo,” he said in a statement. He later told reporters that Manila had deployed a coast guard ship to the area
A group of Uyghur men who were detained in Thailand more than one decade ago said that the Thai government is preparing to deport them to China, alarming activists and family members who say the men are at risk of abuse and torture if they are sent back. Forty-three Uyghur men held in Bangkok made a public appeal to halt what they called an imminent threat of deportation. “We could be imprisoned and we might even lose our lives,” the letter said. “We urgently appeal to all international organizations and countries concerned with human rights to intervene immediately to save us from
Some things might go without saying, but just in case... Belgium’s food agency issued a public health warning as the festive season wrapped up on Tuesday: Do not eat your Christmas tree. The unusual message came after the city of Ghent, an environmentalist stronghold in the country’s East Flanders region, raised eyebrows by posting tips for recycling the conifers on the dinner table. Pointing with enthusiasm to examples from Scandinavia, the town Web site suggested needles could be stripped, blanched and dried — for use in making flavored butter, for instance. Asked what they thought of the idea, the reply
RSS