Madoff’s Right-Hand Man Pleads Guilty in Massive Ponzi Scheme

The man who served as a top deputy to admitted Wall Street swindler Bernard Madoff pleaded guilty today to charges he helped carry out the record-setting $65 billion Ponzi scheme.

Frank DiPascali for the first time admitted his role in Madoff’s scheme by pleading guilty to charges of conspiracy, securities fraud, perjury, and money laundering. He faces up to more than 100 years behind bars and a half-million dollar fine when he is sentenced at a later date.

Madoff was sentenced in June and ordered to serve 150 years in federal prison for defrauding thousands of investment clients in a Ponzi scheme that went on undetected for nearly two decades. Madoff admitted the scheme in December 2008, just as the worsening financial crisis had exposed his investment empire as nothing more than an elaborate shell game.

“I Helped Bernie Madoff”

Standing in a Manhattan courtroom, the 52-year-old DiPascali told the judge that he knew Madoff was ripping off thousands of investors as early as nearly 20 years ago.

“I’m standing here today to tell you that from the early 1990s to 2008, I helped Bernie Madoff and other people carry out a fraud,” he said, reading from a prepared statement, according to a Reuters news report.

Not surprisingly, DiPascali did not in open court name names of the “other people” he says helped orchestrate the fraud. However, in exchange for agreeing to plead guilty to the charges, U.S. District Judge Richard Sullivan is expected to consider a lighter sentence for DiPascali.

Former CEO Pleads Guilty, Others Charged, Too

DiPascali worked for Bernard L. Madoff Investment Securities LLC for 33 years as chief financial officer and in other posts, prosecutors said. Federal prosecutors have long said they suspected other people close to Madoff either knew of or actively assisted in the scheme.

In March, certified public accountant David G. Friehling and his accounting firm, Friehling & Horowitz, CPAs, P.C. were charged by the SEC for his alleged role in helping cover up Madoff’s scheme. According to the SEC, Friehling and his firm falsely claimed to have conducted proper audits Madoff’s books between 1991 and 2008.

Also, at least one hedge fund manager has been charged by the Securities and Exchange Commission for allegedly funneling clients and billions of dollars to Madoff’s fraudulent scheme.

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