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 Assistant U.S. Attorney Randall Jackson asked Bonventre repeatedly
whether he was "close friends" with one of four co-defendants
accused of helping to conceal Madoff's decades-long,
multibillion-dollar fraud, former portfolio manager Annette
Bongiorno. Bonventre repeatedly said he did not know what Jackson
meant.
"You went to college, correct?" Jackson asked with a note of
frustration in his voice. "Do you have any difficulty with the
definition of the word ‘close'?"
A flustered Bonventre eventually said, "Yes, I struggle with the
meaning of ‘close.'" Bonventre did, however, acknowledge that he and
Bongiorno were friendly colleagues.
Bonventre, 67, who worked at Madoff's firm for 40 years, is the
first of five former employees on trial in federal court in
Manhattan to take the unusual step of testifying. The trial began in
October, nearly five years after the December 2008 arrest of Madoff,
now 75 and in prison.
The other defendants charged with helping Madoff conceal his fraud
by using false documents and fake trades, Bongiorno, portfolio
manager Joann Crupi and computer programmers Jerome O'Hara and
George Perez, have not made a final decision on whether they will
take the stand.
All five have argued they were unaware of Madoff's fraud, which cost
investors an estimated $17 billion in principal losses. Under
questioning from his lawyer, Bonventre said he only learned of the
scheme when Madoff was arrested.
Madoff pleaded guilty in March 2009 and he is serving a 150-year
prison sentence.
Wednesday's testimony drew a crowd of onlookers, including
high-ranking members of the U.S. Attorney's office, as Jackson
challenged Bonventre on everything from his corporate title to his
tax returns.
Putting his hands on his hips and widening his eyes in disbelief,
Jackson's body language seemed aimed at convincing the jury that
Bonventre, who directed the firm's broker-dealer unit, simply could
not be believed.
Earlier in the trial, two former Madoff aides who are cooperating
with prosecutors testified that Bonventre helped create forged
versions of statements showing the firm's securities holdings at an
outside clearinghouse.
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On Wednesday, Bonventre said he became aware of a project to print
statements but did not work on it. He said Madoff explained to him
that he wanted to print his own versions rather than purchase paper
statements from the clearinghouse to save money. That did not make
sense, Bonventre said, because by that time the firm largely
received the information electronically.
"This raised no red flags for you?" Jackson asked.
Bonventre replied that he told Madoff the project was unnecessary,
but he said he did not think it was suspicious. Prosecutors charge
that the fake statements were used to fool regulators into believing
the firm's investment advisory unit was legitimate.
Bonventre's lawyer, Andrew Frisch, pointed out during questioning of
his client that Bonventre's son, two stepsons, cousin and nephew all
worked at Madoff's firm at different times.
Frisch asked Bonventre whether he would have helped get them those
jobs had he known of the fraud.
When Bonventre said no, Frisch asked, "Any doubt about that?"
"None whatsoever," Bonventre said.
The testimony is scheduled to resume on Thursday.
The case is USA v. O'Hara et al, U.S. District Court, Southern
District of New York, No. 10-cr-0228.
(Reporting by Joseph Ax; editing by
Grant McCool)
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