Looks as though Madoff’s pal will be staying in prison

Judge doesn’t see the value in his testimony.

A judge today questioned the value of any testimony from Bernie Madoff’s right hand man — coldly declaring that anyone who could be hurt by Frank DiPascali is “in prison in Butner, North Carolina or at the bottom of a swimming pool someplace.”

You may recall that DiPascali, who ran Madoff’s scam for decades, showed up in court a few months ago to plead guilty and, pursuant to a deal with the prosecutors, who claim they need his cooperation, expected to go home the same day. The judge didn’t buy it and if his comments today are any indication, still doesn’t. Fine by me.

(h/t, Horsejock)

Was denying DiPascali bail a dumb move?

John Carney thinks so – if Frank’s cooped up in jail he can’t cooperate very well with the investigation into the Madoff matter and, worse, other conspirators will realize that they have nothing to gain by speaking up. Carney makes some good points – follow the link and read them – but I’m not so sure he’s right. True, if DiPascali is held in jail until his sentencing next May 10, he’ll be of little use to the prosecution and judging from their arguments in favor of bail, there is still much that DiPascali can tell them. But if, as the judge hinted, he can get sprung when something better than a $2.5 million bond, secured by $750,000 in real estate is offered, then maybe a few weeks contemplating what the rest of his life could look like will serve as a further incentive. Guess we’ll find out.

Go directly to jail

Madoff’s man Frank DiPascali was sent to jail today, where he’ll stay at least until sentencing in May of next year. As part of the plea bargain, the prosecutors had agreed to let the man stay free on bail but as in all such bargains, the judge doesn’t have to go along. In this case, he didn’t. Good.

Attorneys argued the former chief financial officer should be free on bail to help investigators sift through a mountain of evidence. But U.S. District Judge Richard Sullivan surprised both sides by ordering DiPascali jailed immediately — a rarity for a cooperator in a white-collar case who had pleaded guilty.

Sullivan said he felt compelled to keep 52-year-old DiPascali locked up after hearing the defendant admit that, at Madoff’s direction, he lied to the Securities and Exchange Commission in 2006 when he thought they might discover the fraud. The judge said he was troubled too that DiPascali also lied repeatedly “to people who entrusted him with their life savings.”

Defense attorney Marc Mukasey told Sullivan his client was “completely unprepared for this” and tried several times to persuade the judge to change his mind. He described DiPascali as a genuinely repentant cooperator who won the trust of FBI agents by speaking to them nearly every day since late last year.

But in the end, a dejected-looking DiPascali was handcuffed and led out of the courtroom.

My God, next we’ll learn that medical care’s expensive and there’s corruption on the waterfront!

Madoff CFO Frank DiPascali confesses that the Madoff Ponzi was a fake all along and he and others knew it.

Mr. DiPascali admitted to helping Mr. Madoff and others engage in a scheme that “hurt thousands of people” between the early 1990s and 2008.

He said Mr. Madoff had amassed a stable of clients as an investment adviser by the early 1990s, but no purchases or sales of securities were taking place in their client accounts. Mr. DiPascali said he learned in the late 1980s or early 1990s that no trading was occurring in those client accounts.

“It was all fake; it was all fictitious,” Mr. DiPascali said. “It was wrong, and I knew it at the time.

The Journal article points out that the total time on all charges, if cumulative, amount to 125 years. No word on who DiPascali’s ratted out but his admission that he helped Bernie “and others” run the scam is going to ruin some people’s sleep tonight. If anyone goes for a one-way swim off the Hamptons early tomorrow morning, I’d understand.

DiPascali update

Madoff’s CFO is  in court, where the U.S. has presented a 10 – count charging document to which he’s expected to plead guilty later today. (bumped)

The charging document, filed in Manhattan federal court just hours before the scheduled plea proceeding, accuses DiPascali, 52, of conspiracy, securities fraud, investment adviser fraud, falsifying records, money laundering, perjury and other crimes.

DiPascali worked for 33 years in the investment advisory arm of Bernard L. Madoff Investment Securities in New York, many of them as chief financial executive, before the 2008 economic decline exposed a fraud of as much as $65 billion (39.3 billion pounds).

Madoff, who swindled large and small investors worldwide over at least 20 years, admitted in a guilty plea in March to having operated a classic Ponzi scheme, a fraud in which early investors are paid with the money of new clients.

DiPascali faces a maximum sentence of 20 years for several of the crimes with which he is charged.

The man is 52. Wanna bet he’d like to get out of jail before he’s 70? I hear the first stirrings of a canary concert.

Update: Aha! Now the WSJ is following the story. They reach the same conclusion I do, which is that Frankie’s singing. Cool!

The new name you’ve gotta know: Frank DiPascali. [obviously written by someone not reading this blog – Ed.] He’s the former CFO of the Madoff investment-advisory business. We blogged about him last Friday, here, when word broke that he’d be charged by the U.S. in connection with the multibillion-dollar Ponzi scheme.

Today, however, come the charges themselves. Click  here for the government’s filing; here for the WSJ story; here for the Bloomberg story. The charges are ten-fold. Among the crimes allegedly committed by DiPascali: mail fraud, wire fraud, securities fraud, investment-advisory fraud and perjury. But the big one: Conspiracy.

Of course, we have no idea who else the government thinks may have conspired with DiPascali, aside from Bernie himself, but the very notion is pretty intriguing given that DiPascali has decided to plead guilty — today, as a matter of fact. Also new news: according to the government (here), DiPascali has a plea agreement with the government. Bernie, as you’ll recall, didn’t.

In a letter to the court dated Monday, prosecutors recommended that DiPascali be released on a $2.5 million bond secured by his sister’s home.

It’s Frank DiPascali Day in federal court

The Noels flee Round Hill

Bernie Madoff’s CFO, Frank DiPascali, is in court this morning pleading out. The feds have had eight months to squeeze this guy dry and, while Bernie may have chosen to clam up and take the rap, there’s no chance DiPascali’s done that – he’s talked, guaranteed. How do I know this? Because if he hadn’t, the prosecuters wouldn’t be accepting his plea.

It’s not just the Noels who must be spending a nervous day today, but Andy, Mark, and everyone who gave Bernie other people’s money in exchange for a fee.

Andres Piedrahita flies to Mexico, pleads guilty

Well no, not yet, but depending on what Madoff’s lieutenant Frank DiPascali says tomorrow, he might want to. Sounds like Mexican prisons are a wonderland compared to our own and Andres already knows the lingo. He should have a ball.

Inside the high concrete walls ringed by barbed wire, past the heavily armed men in black uniforms with stern expressions, inmates rule the roost. Some well-heeled prisoners pay to have keys to their cells. When life inside, with its pizza deliveries, prostitutes and binges on drugs and alcohol, becomes too confining, prisoners sometimes pay off the guards for a furlough or an outright jailbreak.

“Our prisons are businesses more than anything else,” said Pedro Arellano Aguilar, an expert on prisons. He has visited scores of them in Mexico and has come away with a dire view of what takes place inside. “Everything is for sale and everything can be bought.”

Walter can breath a (small) sigh of relief

Madoff’s lieutenant, Frank DiPascali, is spilling the beans in exchange for a lighter sentence but apparently can’t come up with any dirt on Walter, Ruth, or the boys. I’m sure that will make the Noel’s last days at 175 Round Hill more pleasurable, knowing that, while they’ll be losing the cottage to creditors, Walter won’t be exchanging his digs for federal concrete, but what value is this guy? I mean, great, he’s providing details of how the fraud worked, but big deal: Bernie’s plead guilty and who cares, really, how he did it? If I were a federal prosecutor I’d want names and dates from this slimeball before agreeing to any plea deal otherwise, why bother? Come on, Frank, make something up if you have to – we’re starving out here in Greenwich.