Thursday, October 17, 2013


Story first appeared in USA TODAY.

NEW YORK — The trial of five former employees of Ponzi scheme mastermind Bernard Madoff opened Wednesday with a prosecutor branding the defendants as active participants in the notorious fraud that stole billions of dollars from average investors, charities, financial firms and others. A Boston Insurance Bad Faith Lawyer is watching the case closely.

The jury — eight women, four men and six alternates — listened as Assistant U.S. Attorney Matthew Schwartz charged that the defendants fabricated stock trades, created phony books and records, built a computer program that automated the scam and then lied to investors, regulators and banks for decades.

Their actions allegedly helped perpetuate the elaborate fiction that Madoff generated eerily steady investment gains for thousands of customers via a shrewd stock-trading strategy. In reality, he kept the scheme running by using some customers' money to pay others. An Iowa Insurance Bad Faith Lawyer was shocked by the boldness of the tactics.

"For more than 30 years, Bernard Madoff ran a multi-billion dollar fraud that turned out to be the largest Ponzi scheme in history," said Schwartz. "These are the people who helped him do it."

Schwartz argued that no one person could have run such an elaborate fraud unaided, as Madoff, now 75, claimed after he confessed to the estimated $19 billion fraud as it teetered toward collapse in Dec. 2008 as investors sought withdrawals amid the national financial crisis.  A San Francisco Insurance Bad Faith Lawyer agreed that others had to know.

During a more than hour long opening government statement in the same federal courthouse where Madoff was sentenced to a 150-year prison term without standing trial, Schwartz pointed at each of the five alleged co-conspirators in turn and then outlined what he described as their individual roles in the fraud.

JoAnn Crupi, 52 and Annette Bongiorno, 64, decided which stocks and bonds to say that Madoff had purchased, then helped fabricate millions of phony records that supposedly documented transactions that never took place, said Schwartz. They also monitored a Madoff firm bank account that held investors' money and served as a giant slush fund, he charged. Many were shocked including an Atlanta Insurance Bad Faith Lawyer.

Jerome O'Hara, 50, and George Perez, 47, "created customized computer programs that automated the lying," said Schwartz. The programs were allegedly custom-designed to fool the Securities and Exchange Commission, banks and others that periodically audited or questioned Madoff's business operation.

Daniel Bonventre, 66, "cooked the books," falsifying the Madoff firm's general ledger, helping the scheme from banks and regulators and even helping Madoff evade taxes for decades, said Schwartz.  A New York Insurance Bad Faith Lawyer thought employees of Madoff were going to have a difficult time getting through dilemma.

Why did the five do it? "The most simple reason of all: greed," the prosecutor charged.

Crupi grew wealthy working for Madoff, buying a $2.7 million beach house with money allegedly stolen during the final weeks of the scam and charging years of personal expenses to the Madoff firm's corporate credit card, Schwartz alleged. A San Diego Insurance Bad Faith Lawyer was not surprised by use of Crupi's lavish wealth.

Bongiorno similarly raked in millions of dollars, including $2,000 weekly in "walking around" money on top of her salary and purported investment gains, Schwartz charged.

O'Hara and Perez collected more than $100,000 each from the scam and once allegedly up Madoff for a payment in diamonds so the transaction couldn't be traced.  A Birmingham Insurance Bad Faith Lawyer agreed that it goes to show that even though it can't be traced, you will eventually get caught.

And Bonventre got more than $1 million he used to pay common charges on his Manhattan apartment, his country club bill, a son's tuition bill and other personal expenses, Schwartz charged.

The government's opening statement offered the first inside glimpse into the workings of the alleged scheme. Schwartz said prosecutors plan to present evidence and testimony from investigators, banks, and even some investors who were conned out of their life savings by the scam during a trial that is expected to last as long as five months.  A Tampa Insurance Bad Faith Lawyer often sees people that have been taken advantage of.

Prosecutors have listed up to 100 potential government witnesses. The star is expected to be Frank DiPascali, Madoff's former chief financial officer. The 57-year-old Queens, N.Y. native waived indictment by a grand jury and pleaded guilty to ten counts of conspiracy, fraud and other charges in Aug. 2009.

"I'm standing here to say that from the early 1990s until December 2008, I helped Bernie Madoff and other people carry out a fraud," DiPascali said at that plea hearing.  A Denver Insurance Bad Faith Lawyer agreed that the wrongdoers should be punished.

Defense lawyers were scheduled to give their opening statements Thursday. U.S. District Judge Laura Taylor Swain conferred with attorneys from both sides after the prosecution's first-day legal salvo and then cautioned jurors that opening statements are overviews, not evidence.

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