Frank DiPascali, the former Chief Financial Officer for Bernard Madoff, pleaded guilty today in Federal District Court in Lower Manhattan before Judge Richard Sullivan. I reported on this expected plea last week. He's hoping for leniency, but is facing a maximum of 125 years on charges of conspiracy, securities fraud, mail fraud, wire fraud, investment adviser fraud, two counts of falsifying the books of a broker dealer, international money laundering, perjury and federal income tax evasion.
DiPascali was released on a $2.5 million bond secured by his sister's home. U.S. Attorney Marc Litt asked the court to schedule DiPascali's sentencing in May of next year. How well he cooperates with the government case will impact the length of his jail term.
The judge asked DiPascali if he understood his Constitutional rights and asked about his background. DiPascali told the judge he had a high-school education from Archbishop Molloy High School in Briarwood, Queens. He said he was not receiving psychiatric care and his mind was clear. During his plea he said that the transactions were "all fake. It was all fictitious. It was wrong, and I knew it was wrong all the time."
His actions helped Madoff carry off his $65 billion Ponzi Scheme, which destroyed the savings of thousands of smaller investors, as well as celebrities, charities and hedge funds. Even if he gets a lighter sentence for cooperating, the Judge must remember how many people were hurt by this fraud.
So far only two other people face criminal charges. Madoff pleaded guilty but refused to cooperate. He was given a 150 year sentence. His accountant, David G. Friehling, was charged with securities fraud and aiding the investment adviser fraud. He pleaded not guilty.
Lita Epstein has written more than 25 books, including Reading Financial Reports for Dummies and The Complete Idiot's Guide to Value Investing.
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