Ex-Madoff worker set to plead guilty: court papers

Reuters

By Jonathan Stempel

NEW YORK (Reuters) - A former payroll manager for Bernard Madoff's investment firm is expected on Monday to plead guilty to charges he helped his former boss conduct fraud, court papers show.

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Eric Lipkin is expected to plead guilty to six criminal charges including bank fraud, making false statements, two counts of falsifying books and records, and two counts of conspiracy, according to a letter from prosecutors filed on Thursday in U.S. District Court in Manhattan.

James Filan, a lawyer for Lipkin, declined to comment.

The bank fraud charge, the most serious count, carries a maximum 30 years in prison plus fines and forfeitures. Lipkin agreed to cooperate with prosecutors in connection with his plea, the letter shows. The letter was dated Wednesday.

Lipkin would become the ninth former employee at Bernard L. Madoff Investment Securities LLC to be criminally charged over Madoff's Ponzi scheme.

Madoff, his long-time lieutenant Frank DiPascali, and an outside accountant have pleaded guilty. Five others -- Daniel Bonventre, Annette Bongiorno, Joann Crupi, Jerome O'Hara and George Perez -- have pleaded not guilty.

Lipkin and other family members were sued last year by Irving Picard, the court-appointed trustee seeking money for Madoff's victims, seeking to recover $9.2 million they allegedly reaped improperly from Madoff's Ponzi scheme.

Among those sued was Eric Lipkin's father, Irwin Lipkin, described by Picard as one of the first workers hired by Madoff, as early as 1964.

Picard said Eric Lipkin joined Madoff's firm in 1992, eventually becoming its payroll manager, and "played an active role" in helping him deceive regulators.

Eric Lipkin did this in part by falsifying trades and the identities of counterparties, and making it appear that Madoff's customers were achieving steady returns on their accounts, Picard said.

Madoff, 73, pleaded guilty in 2009 to running an estimated $65 billion fraud. He is serving a 150-year prison sentence.

The case is U.S. v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-00228.

(Reporting by Jonathan Stempel; Editing by Tim Dobbyn)