Thursday 18 January 2018

Madoff case is far from over as detectives look at associates

Bernard Madoff arriving at Manhattan federal court in New York during his trial
Bernard Madoff arriving at Manhattan federal court in New York during his trial

US officials pursuing their investigation of Bernard Madoff's Ponzi scheme are focusing on close associates of the convicted con man who insist they didn't know of any wrongdoing.

The continuing investigation into Madoff's $65bn fraud may implicate as many as 10 other people, some of whom deny any knowledge of the massive fraud, sources said.

Madoff (71) was sentenced on Monday to 150 years in prison for operating what prosecutors called a crime of "unprecedented proportion". He was charged with using his New York-based firm, Bernard L Madoff Investment Securities LLC, to take money from new investors to pay off old ones.

"Investigators' first focus will be on whether those around him, either from the start or over time, had actual knowledge of the fraud," said Daniel Richman, a professor at Columbia Law School in New York and an ex-federal prosecutor. "Investigators are at least sceptical of the claims of those around him that at no point did they know of the fraud or its dimensions."

Madoff's scam ran since at least the early 1990s and defrauded thousands of victims. He was charged with fraud and money laundering after the government said he confessed to his sons and the Federal Bureau of Investigation. FBI agents have spent the last six months interviewing individuals as they attempt to unravel Madoff's fraud scheme, a source said.

"It was a calculated, well orchestrated, long-term fraud, that this defendant carried out month after month, year after year, decade after decade," assistant Manhattan US Attorney Lisa Baroni told US District Judge Denny Chin at Madoff's sentencing. "He created literally hundreds and hundreds of thousands of fake documents every year."

Federal authorities are now scrutinising those who worked in close proximity to Madoff at his firm.

Madoff said in court that he "deceived" his 200 employees, his wife, Ruth, as well as his brother and two sons, "who spent their whole adult life helping to build a successful and respectful business".

Only a few employees worked closely with Madoff on the 17th floor of his firm's Midtown Manhattan building, where their boss ran an investment-adviser business that was off limits to most other workers. (Bloomberg)

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