First Madoff employee to be charged: Frank DiPascali, CFO
Filed under: People, Investing
So far in the Madoff scandal only one person other than Madoff has been charged. His accountant, David Friehling, was accused of securities fraud and investment-adviser fraud and four counts of making false filings with the Securities and Exchange Commission on July 17. Friehling pleaded not guilty.Now cases against Madoff employees appear to be moving forward. Frank DiPascali, who was chief financial officer for Bernard L. Madoff Investment Securities, will likely be charged in the next few days. Government prosecutors filed a notice of intent, but did not specify the charges. The notice, which was signed two days ago indicated that DiPascali will waive his right to an indictment. That likely means that DiPascali agrees to admit guilt and cooperate with authorities in exchange for leniency. This is the same type of document prosecutors filed before Madoff pleaded guilty.
This filing is probably just the beginning of what will likely be a stream of indictments against other Madoff employees and possibly family members. Frequently, once one person agrees to cooperate others come forward as well. The big question is who else will he named. Also, how much information has DiPascali given already and, now that he appears to have made an agreement with the prosecutors, will he continue to provide in order to get leniency.
DiPascali was introduced to Madoff by Annette Bongiorno, who was his next door neighbor when he was growing up. Annette Bongiorno has been one of the key players under investigation. She worked for Madoff for 40 years and it has been reported that she instructed assistants to generate trading tickets that appear to be bogus.
According to investigators, she would ask assistants to research daily share prices for blue chip stocks from the previous month or several months earlier. Using these researched numbers, Bongiorno would instruct assistants to generate the "trading" tickets, so they could show gains that were in line with Madoff's steady annual returns. Investigators obtained this information from talking with Bongiorno's assistants.
Others that could be drawn into the case if DiPascali testifies are members of the Madoff family. The most likely family member who may be at risk is Peter Madoff, Madoff's younger brother. He had the title of compliance officer, which made him responsible for assuring the firm followed securities laws and regulations. Peter Madoff and Bernard Madoff were listed as officers of the firm on SEC flings.
Madoff stayed silent most likely to protect others in his company as well as family members. He is serving 150 years in prison, and all but $2.5 million of the assets held by he and his wife have been seized by the U.S. Marshals. Ruth Madoff has been put on a spending leash to be sure she isn't hiding other money.
Lita Epstein has written more than 25 books including Reading Financial for Dummies and Trading for Dummies.
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Fed stalls on Chinese bank deal, costs taxpayers $1.7 billion
Dell in a handbasket: Should founder Michael Dell resign?
Reader Comments (Page 1 of 3)
8-07-2009 @ 8:49PM
todd said...
It takes alot of fools to mess with people and there money, if Madoff thought that he would be the only one going to jail, he must be dreaming or living in another country.
Reply
8-08-2009 @ 10:49AM
Lizard said...
They're off to a good start. Now let's indict some of the jewish "non-profits" who were in on the action, saying they lost everything. Anyone who says they lost their entire savings to Madoff were participating on this scam, no question about it. No half-intelligent person invests all of their money in one instrument, unless they are confident they will not be losing anything,ie., knowledge of the scam.
8-07-2009 @ 9:23PM
Ken said...
"...assets held by he and his wife..." Just a comment on the writing of this article, if I may. Proper English grammar would be "...assets held by his wife and him..."
Reply
8-08-2009 @ 10:26AM
sjamieson said...
Spelling police strika once agairn
8-08-2009 @ 9:53PM
Tim said...
Get a grip on the proper grammar, Ken. You're probably the kind of jerk, who tells someone who is eating a cheeseburger, that it is bad for him.
8-07-2009 @ 10:44PM
lisa said...
It's funny, but true. When one has so much it's never enough. Now what? Nothing is left.
Reply
8-07-2009 @ 10:45PM
ern22 said...
Thank God for sending us Obama/
Reply
8-09-2009 @ 1:20PM
sonja said...
You have got to be kidding, OBUMMER IS PULLING OFF ONE OF THE BIGGEST PONZI SCHEMES EVER, HE SHOULD BE JAILED ALSO.
8-07-2009 @ 11:28PM
Joanna said...
ABOUT TIME.
Reply
8-07-2009 @ 11:58PM
Suzie said...
Throw them all in prison, including Mrs. Madoff. She reaped the benefits and lived high on the hog, just like the rest of the scumbags.
Reply
8-08-2009 @ 12:05AM
James said...
ern222.. You are so inteliigent.. Enjoy your ride to the slaugheterhouse... You Moron!!!
Reply
8-08-2009 @ 12:16AM
George said...
What, they are going to charge Di Pascali? A guy with a good paisan name like Di Pascali counldn't possibly be involved in anything shady. Its a frame up of a good Italian boy.
Reply
8-08-2009 @ 4:16AM
Miss Carol Dijkhuyzen said...
Stop it...you are nuts for saying such evil words against our President Obama.Shame on your ignorance.
From Carol in Monaco.
Reply
8-08-2009 @ 6:13AM
danzillo4 said...
What about the recievers of donations from madoff, Congress and the Sinate, who NONE have returned the MONEY as they should and distribute it to the investors who were swindled!
Reply
8-08-2009 @ 8:19AM
timothy said...
Which 'assistants' are guilty of a criminal offense and which are not ?????? If the assistants were 'creating' trading tickets (buy or sell confirmations) they must have realized they were involved in a dishonest enterprise. If they didnt head for the door, they are guilty of being part of a criminal operation. "I had to follow orders to keep my job"...is NOT a legal excuse.
Reply
8-08-2009 @ 8:57AM
bernie said...
This is what America is all about. Our government gives away our real wealth, why having a blind eye on wallstreet allowing gangsters to steal from the innocent. Our so called ivy leaugue universities put out these gangsters CEO'S.
Reply
8-08-2009 @ 9:59AM
Frank said...
Kind of ironic to know the ultimate Ponzi scheme players is the US government continuously taking money from Peter to pay Paul (by law this is illegal), spending money it does not have hoping of future tax increases. The Madoff's go to jail and the Congress men responsible for all mess go to another cocktail party. But then we have nothing but to blame ourselves.
Reply
8-08-2009 @ 10:01AM
John said...
China just executed a businessman accused of fraud. Sound,s like we should start that here and maybe this kind of crap would end.
Reply
8-08-2009 @ 10:29AM
sjamieson said...
So smug they were (especially peter) when I did construction on their Manhattan offices. Now 20 years later I sit comfortably in my modest while they go to prison mere crooks.
Reply
8-08-2009 @ 10:52AM
Earl said...
When Clinton left office this country was in good shape Bush trashed this country and everything it stands for Obama was left with a real mess to deal with and has done great with the crap that was left to fix , at least you know he is on the job and if not for nut cases out there we could get alot of great things done and put our country back on the a solid footing. Town hall meetings should be controled and all sides could speak and may even learn something in the process angry mobs should not be tolorated civil dialogue should, why should we be held captive by big companys who are afraid of losing control its all about keeping the statis quo. CHANGE
Reply