Defense: Madoff kept employees in dark about fraud

18 Oct

JoAnn Crupi, right, arrives to federal court in New York, Tuesday, Oct. 8, 2013. The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; Crupi, an account manager; and computer programmers Jerome O’Hara and George Perez. All have pleaded not guilty. (AP Photo/Seth Wenig)

JoAnn Crupi, right, arrives to federal court in New York, Tuesday, Oct. 8, 2013. The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; Crupi, an account manager; and computer programmers Jerome O’Hara and George Perez. All have pleaded not guilty. (AP Photo/Seth Wenig)

Annette Bongiorno arrives to federal court in New York, Tuesday, Oct. 8, 2013. The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and computer programmers Jerome O’Hara and George Perez. All have pleaded not guilty. (AP Photo/Seth Wenig)

Daniel Bonventre arrives to federal court in New York, Tuesday, Oct. 8, 2013. The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Annette Bongiorno, a supervisor in his private investment business; Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and computer programmers Jerome O’Hara and George Perez. All have pleaded not guilty. (AP Photo/Seth Wenig)

George Perez arrives to federal court in New York, Tuesday, Oct. 8, 2013. The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. Prosecutors say fictitious trades and phantom accounts were created with help from Madoff’s secretary, Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and computer programmers Jerome O’Hara and Perez. All have pleaded not guilty. (AP Photo/Seth Wenig)

FILE – In this April 12, 2010 file photo, Jerome O’Hara, former computer programmer for Bernard L. Madoff Investment Securities LLC, exits Manhattan federal court in New York. O’Hara, and four other back-office subordinates of the Ponzi king go to trial Tuesday, Oct. 8, 2013 as the government for the first time shows a jury what it has collected in its five-year probe of one of history’s biggest frauds. (AP Photo/ Louis Lanzano, File)

(AP) — Bernard Madoff was a Wall Street rock star who charmed and deceived billionaires, celebrities, government regulators and his employees, including five of his ex-workers who are on trial for fraud, defense attorneys told a jury Thursday in opening statements.

Attorney Andrew Frisch said Madoff and his former finance chief — government cooperator Frank DiPascali — were “depraved and pathological,” delivering millions of lies to disguise a fraud that cheated thousands of investors out of billions of dollars.

Defense lawyers described Madoff as god-like at his firm, a former NASDAQ chairman who hid his heartless, corrupt and greedy side with extraordinary generosity. They said he was a swaggering Wall Street icon, a control freak, a great liar, a genius manipulator, extremely demanding, eccentric and temperamental, private and secretive, domineering and controlling.

“Celebrities, movie stars, Sandy Koufax. They all believed in Bernie Madoff,” said Eric Breslin, an attorney for JoAnn Crupi, 52, an account manager for Madoff for 25 years. “He literally had millionaires eating out of his hand, begging him to invest their money. … The world was taken in. The government will not be able to prove JoAnn Crupi knew any better.”

He said Madoff, 75, who is serving a 150-year prison sentence, would not appear in court but “his shadow will be in this courtroom every day.”

On Wednesday, a prosecutor accused the former employees of being crucial components of a fraud that remained hidden for decades, but defense lawyers insisted Madoff fooled their clients just as he did Securities and Exchange Commission inspectors and sophisticated financial experts.

Frisch portrayed his client, Daniel Bonventre, as enamored by Madoff. Bonventre, 66, rose to a position of director of operations after joining the firm in the late 1960s. He oversaw the legitimate side of Madoff’s business, not the secretive private investment wing, Frisch said.

“Dan believed Madoff, like so many others,” Frisch said. “He devoted his life to Madoff. … Dan is broken but he is not guilty.”

Roland Riopelle, attorney for Madoff’s longtime secretary, Annette Bongiorno, 64, said his client too was taken in by “a kind of rock star in the securities industry.”

“The government simply cannot prove that she knew there was a fraud and intended to hurt anyone,” he said.

Bongiorno started working for Madoff in the 1960s when she was 19, eventually becoming a supervisor responsible for maintaining the accounts of longtime customers, Riopelle said.

He noted she kept her money in company’s accounts until the fraud was revealed and encouraged family and friends to invest, something she would not do if she was “really some kind of monster.”

Frisch described Madoff as a “Wall Street icon,” someone as large in stature in the securities industry as Donald Trump in real estate, LeBron James in basketball or Oprah Winfrey on television. He said Madoff’s clients included filmmaker Steven Spielberg and actors Kevin Bacon and John Malkovich.

Attorney Gordon Mehler, representing computer programmer Jerome O’Hara, 50, warned jurors to beware of the government’s star witness, DiPascali, saying he was such an architect of the fraud that his blaming other Madoff employees would be like “the Big Bad Wolf getting on the witness stand and condemning Little Red Riding Hood.”

He said O’Hara and another computer programmer on trial, George Perez, 47, were duped by Madoff.

The trial follows the 2008 collapse of Madoff’s private investment business, which cost clients nearly $20 billion. A court-appointed trustee has recovered much of the money.

When the fraud was revealed, Madoff admitted that the nearly $68 billion he claimed existed in accounts was actually only $300 million.

Associated PressSource: http://hosted2.ap.org/APDEFAULT/386c25518f464186bf7a2ac026580ce7/Article_2013-10-17-Madoff%20Fraud-Trial/id-7cbb82028484407bb6e62f2195ae38e8
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