Madoff Lieutenant Says It Was 'Impossible' Not To Know Firm Was A Fraud
It was anything but boring cooking the books to make Bernard Madoff's returns seem smooth and steady, the arch-fraudster's former CFO testified yesterday.
Frank DiPascali, in his first day on the stand in the trial of five former Madoff employees, said that each of them were intimately involved in deceiving Madoff's investors and regulators—a deception that kept the wraps on a $65 billion Ponzi scheme for decades. DiPascali, who worked for Madoff for more than 30 years, told the jury that the fraud went on "as far back as I can remember" and that "it was virtually impossible not to know what was happening."
The five former employees—Daniel Bonventre, Annette Bongiorno, Joann Crupi, Jerome O'Hara and George Perez—have said that they had no idea Madoff was a fraud, in part because DiPascali hid it from them. But DiPascali regaled the jury with anecdotes about close calls averted with the help of each of the defendants, with whom he said he worked closely on the fraud.
In one case, an auditor for KPMG asked to see daily trading logs. DiPascali said that the defendants had prepared trading records for one day, but that the auditor asked for another.
So, DiPascali said, he called O'Hara and told him to fetch the non-existent records from "the archives." He and the others than spent several hours dummying up the records, which they then put into a refrigerator—to cool down the hot-off-the-printer documents—and then tossed them around "like a medicine ball" to create creases and give a patina of age to the new records.
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Picture: Banksy’s stenciled elephant from “Barely Legal,” 2006.
