The SEC is Going After the Geeks


First, Bernie the boss turned himself in, saying he did it all by himself. Nobody believed that, including the SEC. So the SEC went after Madoff’s right-hand man, DiPascali, and Madoff’s accountant, Friehling. Now the SEC is going after the geeks.

The Securities and Exchange Commission charged two computer programmers for their role in helping Bernie Madoff cover up the fraud at Bernard L. Madoff Investment Securities LLC for more than 15 years. The SEC alleges that Jerome O’Hara of Malverne, N.Y., and George Perez of East Brunswick, N.J., provided the technical support necessary to produce false documents and trading records, and took hush money to help keep the scheme going.

“Without the help of O’Hara and Perez, the Madoff fraud would not have been possible.They used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff’s scheme for so many years.”

O’Hara and Perez wrote programs that generated many thousands of pages of fake trade blotters, stock records, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate nonexistent trading. Bernie used a separate computer internally known as “House 17” to process advisory account data. The SEC alleges that O’Hara and Perez knew that the House 17 computer was missing a host of functioning programs necessary for actual securities trading and reporting. According to the SEC’s complaint, they recognized that the trades being entered into House 17 and the account statements and trade confirmations being sent to investors did not reflect actual trades.

According to the complaint, the two geeks tried to escape from Bernie’s clutches. Apparently a salary increase of 25% and a $60,000 bonus was enough to buy their silence.