Frank DiPascali, the finance chief at Bernard Madoff’s investment advisory business, pleaded guilty to helping his boss carry out a $65 billion Ponzi scheme. DiPascali pleaded guilty to 10 counts, including conspiracy, fraud and money laundering. DiPascali has been cooperating with prosecutors, explaining how he and others helped Madoff defraud investors by using money from new clients to pay earlier ones at Bernard L. Madoff Investment Securities LLC.
Maybe we will get some insight into how the fraud began and what sent Madoff and DiPascali over to the dark side. The crime is done and the victims have lost. I am hoping to get some insight into the fraud so we can apply those lessons going forward.
In addition to the criminal proceedings, the Securities and Exchange Commission also filed a complaint against DiPascali. He has consented to a proposed partial judgment, which would impose a permanent injunction against him. The part DiPascali did not consent to were the issues of disgorgement and a financial penalty which will be decided at a later time.
The judge denied a bail request by prosecutors and DiPascali’s lawyer, who argued that sending him to jail would hamper his cooperation in the investigation. He is expected to provide prosecutors with a road map of those in the Madoff inner circle who were involved in the scheme that swindled investors out of an estimated $64.8 billion.