Ex-Madoff Finance Chief Could Point U.S. to Other Accomplices
August 10th, 2009This might be interesting to watch.
Via: Bloomberg:
Frank DiPascali, the finance chief at Bernard Madoff’s investment advisory business who agreed to plead guilty, could help prosecutors build criminal cases against other players in his boss’s $65 billion Ponzi scheme.
DiPascali, 52, is scheduled to enter his plea tomorrow in federal court in Manhattan, U.S. Attorney Lev Dassin told a judge in an Aug. 8 letter that didn’t specify the charges. DiPascali would waive indictment and plead guilty, which signals to lawyers that he is cooperating to lessen his prison term.
“I believe he’s cooperating,” said John J. Fahy, a former federal prosecutor not involved in the case. “He would be very valuable to the government because he has been close to Madoff for so many years and had to have seen some of the fraudulent transactions that went on. From what we know of Madoff, he trusted very few people.”
Madoff, 71, is serving a 150-year prison term after pleading guilty to running the largest fraud to pay early clients with money from new investors. Madoff’s failure to identify accomplices or substantially help the receiver locating assets of his firm, Bernard L. Madoff Investment Securities LLC, makes DiPascali valuable, said attorney Andrew Hruska.
“From what I understand, he was perfectly placed to understand all aspects of the fraud,” said Hruska, a former federal prosecutor not involved in the case.
DiPascali spent 33 years at the firm, playing a key role in operations on the 17th floor of the midtown Manhattan building where Madoff’s fraudulent investment advisory business was based, according to investors. Investor Tim Murray said in January that DiPascali was a “street-smart New Yorker” who fielded phone calls about his money at the firm.
‘He is the Guy’
“To a Madoff customer with a discretionary account, he is the guy,” Murray said. “There is nobody else.”
Only Madoff and the firm’s outside accountant, David Friehling, have been charged so far with crimes. Friehling has pleaded not guilty to charges of fraud and making false statements to the U.S. Securities and Exchange Commission.
DiPascali was “closest to the actual operations of the Ponzi scheme,” said Columbia University Professor John Coffee, a securities law expert.
“If there was anything known by anyone else but Bernie Madoff, it was known by Frank DiPascali,” Coffee said. “The question is who had direct conversations with Frank DiPascali and what was said.”
