Madoff's Top Aide Pleads Guilty; Though Cooperating, Sent to Jail

Madoff's Top Aide Pleads Guilty; Though Cooperating, Sent to Jail
The New York Law Journal - August 11, 2009

Bernard L. Madoff's right-hand man pleaded guilty yesterday and is cooperating in the government's investigation into the largest Ponzi scheme in history. Frank DiPascali Jr. waived indictment and entered guilty pleas to 10 counts in a criminal information before Southern District Judge Richard J. Sullivan. Mr. DiPascali admitted he was part of a scheme that cost institutions, individual investors and charities billions of dollars. In spite of his cooperation with the government and over the objections of both his defense counsel and the prosecution, Judge Sullivan took the unusual step of ordering Mr. DiPascali be jailed immediately.  

Department of Justice Press Release

For Immediate Release
August 11, 2009 United States Attorney's Office
Southern District of New York
Contact: (212) 637-2600
Former Employee at Bernard L. Madoff Investment Securities LLC Pleads Guilty to Ten-Count Criminal Information

NEW YORK—Lev. Dassin, the Acting United States Attorney for the Southern District of New York, Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), Alan D. Lebowitz, the Deputy Assistant Secretary of the United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA), and Patricia J. Haynes, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service (IRS), announced today that Frank DiPascali, Jr. pleaded guilty to ten felony counts contained in a criminal information. DiPascali, formerly an employee of Bernard L. Madoff Investment Securities LLC, pleaded guilty in Manhattan federal court before United States District Judge Richard J. Sullivan to conspiracy, securities fraud, investment adviser fraud, falsifying records of a broker-dealer, falsifying records of an investment adviser, mail fraud, wire fraud, international money laundering, perjury and attempting to evade federal income taxes. DiPascali, 52, of New Jersey, faces a statutory maximum sentence of 125 years in prison. He is also subject to mandatory restitution and faces criminal fines up to twice the gross gain or loss derived from the offense. Additionally, the criminal information to which DiPascali pleaded guilty includes forfeiture allegations that would require DiPascali to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property. The statutory maximum sentences for each of the charged offenses are set forth in an attached chart. Judge Sullivan remanded DiPascali and set a sentencing control date for May 15, 2010. Mr. Dassin praised the investigative work of the FBI, DOL-EBSA, and the IRS and thanked the SEC for its assistance. Mr. Dassin added that the investigation is continuing.  Assistant United States Attorneys Marc Litt, Lisa A. Baroni, William J. Stellmach, Barbara A. Ward, and Sharon Frase are in charge of the prosecution.

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