Published October 02, 2012
NEW YORK – Five former employees of Bernard Madoff, charged with helping the conman run a multibillion-dollar Ponzi scheme over several decades, will have their chance to fight the allegations at trial in a year's time.
At a hearing in Manhattan federal court on Tuesday, a judge set aside as long as 3-1/2 months for a trial to start on Oct. 7, 2013, as the defendants entered pleas of not guilty to dozens of additional charges filed by U.S. prosecutors on Monday.
The three men and two women were first indicted in 2010.
A prosecutor told the judge that several other people who also once worked for Madoff before his December 2008 arrest and collapse of his investment firm, would testify against their former colleagues at trial.
A Ponzi scheme is a scam in which early investors are paid with the money of new clients. At Madoff's firm, trades showing huge profits were simply fabricated, according to prosecutors.
Madoff, 74, pleaded guilty in March 2009 to running a fraud of as much as $65 billion at his Bernard L. Madoff Investment Securities LLC in New York. He is serving a 150-year prison sentence. The trustee leading the search for money to return to Madoff's victims says Madoff defrauded customers of about $20 billion.
Monday's superseding indictment said five backroom staff, former operations manager Daniel Bonventre, former investment advisory employees Annette Bongiorno and Joann Crupi, and former computer programmers Jerome O'Hara and George Perez face new charges of bank fraud and tax offenses.
Their lawyers asked U.S. District Judge Laura Taylor Swain for more time to prepare for trial.
Crupi's lawyer Eric Breslin said that "given the extent of the allegations, we have gone back to square one" in terms of defending their case.
Last November, David Kugel, a former trader at the firm, told the court as part of his guilty plea that the fraud began in the early 1970s with several employees, including Bongiorno and Crupi, working together to fake records.
At the time of his plea, Madoff said he acted alone, but prosecutors have since charged 12 associates, including seven who pleaded guilty in the hope of receiving a lighter sentence.
They include Madoff's younger brother Peter Madoff, who agreed to accept a prison sentence of 10 years when he admitted in June to charges that he helped advance the Ponzi scheme while serving as the firm's chief compliance officer.
The case is USA v O'Hara et al in U.S. District Court for the Southern District of New York, No. 10-0228.