Portfolio managers Annette Bongiorno and Joann Crupi, computer
programmers Jerome O'Hara and George Perez and back-office director
Daniel Bonventre spent years hiding the fraud from the outside world
while collecting millions of dollars in salary and perks, Assistant
U.S. Attorney John Zach told jurors.
"Day after day, year after year, these defendants pulled off an
avalanche of different lies that enabled Madoff Securities to steal
billions of dollars from investors," said Zach, whose closing
argument in the five-month-long trial was expected to last much of
Wednesday as well.
Madoff's worldwide fraud cost his clients an estimated $17 billion
in principal losses. Madoff, who said he acted alone, was arrested
in December 2008 and pleaded guilty in March 2009. He is serving a
150-year prison sentence.
The five former employees say they were duped by Madoff into
believing his investment advisory business was legitimate. Their
lawyers will deliver closing arguments after the prosecution.
On Tuesday, the prosecutor discussed the specific allegations
against each defendant in turn.
He focused his attention first on Bonventre and Bongiorno, two of
the earliest employees at Bernard L. Madoff Investment Securities
LLC, who both chose to testify in their own defense during the
Bonventre was in charge of overseeing the firm's general ledger, as
well as the bank account that was the "beating heart" of the fraud,
Zach said, and siphoned money from the account to prop up the firm's
failing brokerage business.
His testimony that he had no idea Madoff was operating a fraud,
simply cannot be credited, Zach said.
Bongiorno, meanwhile, did not deny that she registered thousands of
backdated false trades in customer accounts. But she said on the
witness stand she was only following orders from Madoff and did not
realize there was anything wrong with it.
"To hear her tell it, she didn't pay any attention to anything going
on at Madoff Securities," except for the millions of dollars going
into her own investment accounts, Zach said. "She was not testifying
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He held up a box full of index cards that listed fake trades to be
entered into accounts and told the jury that it was kept on her desk
at the firm.
Zach said that both aides profited handsomely from the fraud,
with Bonventre sending his son to private school and Bongiorno
purchasing a Bentley sedan, among other luxuries.
Crupi, Zach said, helped deceive auditors from the U.S. Securities
and Exchange Commission and from outside accounting firms while
employing fake trades in her own account to avoid taxes.
And O'Hara and Perez, the computer programmers, designed corrupt
programs that generated doctored documents to conceal the fraudulent
"They essentially were the oil that made the fraud work," Zach said.
The case is USA v. O'Hara et al, U.S. District Court, Southern
District of New York, No. 10-cr-0228.
(Editing by Grant McCool)
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