Fake Profit
The U.S. alleges the group on trial knew Madoff’s securities firm didn’t conduct real trades and used money from earlier investors to pay off new ones. When the fraud collapsed almost five years ago, thousands of customers lost at least $17 billion in principal and $48 billion in fake profit they believed was being held in their accounts.
The defendants created millions of false account statements and elaborate trading records to mislead anyone who came in contact with the company, and became rich in the process, Assistant U.S. Attorney Matthew Schwartz told jurors Oct. 16 in the courtroom not far from Wall Street, where Madoff’s company was once based in the 1970s.
“They enabled the fraud in different but essential ways,” Schwartz told the 12-person jury. “They did it for the most simple reason of all -- greed.”
Bonventre was fooled by Madoff’s “depraved and pathological lies,” Andrew Frisch, his lawyer, said yesterday. “Dan did what Madoff told him to do. That’s what the evidence will show. Dan believed Madoff like so many others.”
Legitimate Unit
Bonventre, who started working for Madoff in the 1960s when he was 22, was part of the firm’s legitimate broker-dealer unit and didn’t know about the fraud at the investment advisory business, Frisch said.
Bonventre “never lied, never shredded documents, never ran and hid” after Madoff’s arrest in 2008, Frisch said. “He had no reason to. He didn’t know about the Ponzi scheme.”
In his guilty plea in 2009, Madoff said the market-making and proprietary trading side of his firm was “legitimate” while admitting he ran the scheme from the advisory business, Bernard L. Madoff Investment Securities LLC.
Bongiorno started working for the company straight out of high school and never learned how a securities company was supposed to operate, her lawyer, Roland Riopelle, said in his opening statement.