Madoff's CFO Pleads Guilty; Faces 125 Years
Bernie Madoff's longtime finance chief pled guilty in federal court this afternoon to helping his boss carry out a $65 million dollar Ponzi scheme.
The accountant, Frank DiPascali, had been employed at Bernie L. Madoff Investment Securities for more than three decades. He was responsible for managing thousands of accounts and accepted billions of dollars from individuals, charities, pension funds, and other investors. He also helped develop the internal computer system that gave investors the false impression that their money was being invested as promised.
In short, Madoff was head chef, while DiPascali was one of those that actually cooked the books.
According to the government's complaint, the scheme worked like this:
"On a regular basis, Madoff provided guidance to DiPascali about the gains or losses that he wanted to be reflected in the account statements . . . Based on that guidance, Dipascali and other coconspirators prepared model baskets of S&P 100 stocks based on historical market prices and tracked how those hypothetical baskets would have performed in the actual marketplace to determine whether and when to "enter the market." Whenever Madoff informed DiPascali that he had decided to "enter the market," Dispascali and others would cause the computer to produce tens of thousands of false documents that purported to confirm that pruchase of securities that had, in fact, not been purchased."
DiPascali, who is 52 and from New Jersey, pled guilty to to conspiracy, securities fraud, investment adviser fraud, falsifying records of a broker-dealer, falsifying records of an investment adviser, mail fraud, wire fraud, international money laundering, perjury, and attempting to evade federal income taxes. He faces a maximum of 125 years in prison and the prospect of returning his ill-gotten profits.
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