Tuesday, August 11, 2009

A break in the Madoff case

The WSJ just reported that former Madoff aide, Frank DiPascali Jr., plead guilty to knowingly helping Bernie Madoff perpetuate his $50 billion Ponzi scheme for several decades. We all knew Bernie was lying when he said nobody else knew anything or helped him with the scheme but this is a break in that someone else has admitted to helping Bernie. Hopefully, Mr. DiPascali can shed some light on others who helped Bernie. Here are a few quotes from the WSJ:

Mr. DiPascali ... said Mr. Madoff had amassed a stable of clients as an investment adviser by the early 1990s, but no purchases or sales of securities were taking place in their client accounts. Mr. DiPascali said he learned in the late 1980s or early 1990s that no trading was occurring in those client accounts.

"It was all fake; it was all fictitious," Mr. DiPascali said. "It was wrong, and I knew it at the time."

He admitted to helping perpetuate the illusion that trading was taking place by lying to clients on the phone and through the mail. He admitted to creating fake client documents to reflect the "specific rate of return" Mr. Madoff directed the client receive.

He said he also lied under oath to the SEC in 2006 at Mr. Madoff's direction.

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