Tuesday 20 February 2018

Former Bernie Madoff employee pleads guilty in tax fraud scheme

A FORMER employee at the investment firm run by Bernard Madoff has pleaded guilty to paying fake salaries as part of a tax fraud scheme.

Craig Kugel, 38, pleaded guilty in US federal court in New York to false tax returns, false statements and tax fraud conspiracy.

The charges were separate to Madoff's Ponzi scheme, in which investors were paid phony returns consisting of money skimmed from other investors' principal.

Kugel's scheme involved paying three people who did not work for the disgraced firm.

He was "aware that there were individuals on BLMIS's payroll who did not work for the firm but who nevertheless received salaries and benefits, and he created and maintained false BLMIS employee records on their behalf," the US attorney's office in Manhattan said.

Kugel also admitted to using a Madoff firm corporate American Express card to pay for "$200,000 in personal expenses, including luxury clothes, jewelry, and vacations for himself and his family," none of which was reported on his income tax returns, the US attorney's office said.

Kugel faces a maximum sentence of 19 years in prison and will be sentenced on December 13.

Madoff pleaded guilty to his Ponzi scheme in 2009 and was sentenced to 150 years in prison.

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business