Madoff aide reveals secrets behind fraud

Frank DiPascali promises cooperation in investigation

On Tuesday, Frank DiPascali, aide to the indicted financial fraudster, Bernie Madoff, revealed the secrets behind one of the biggest scams to ever hit Wall Street. DiPascali was just out of high school, in 1975, when he was hired by Madoff as a research analyst. He has since dedicated his life to taking care of the particulars of Madoff’s infamous Ponzi scheme. According to DiPascali, Madoff used stock history to create fake account statements, and also transferred money between his London and New York offices to fool investors into thinking the company was earning commissions on stock trades. DiPascali also explained how Madoff’s company designed a fake computer stock-trading program to deceive regulators. Still, Judge Richard Sullivan of the Federal District Court wasn’t all that impressed with DiPascali’s cooperation, and ultimately denied the $2.5 bail agreement that prosecution and defense lawyers had agreed upon. Facing 125 years in prison, Sullivan said, DiPascali might not be so inclined to show up for his trial in May. In court, Mr. DiPascali announced his plans to work cooperatively with the prosecution, saying he will “dedicate all [his] energy to trying to explain to others how this happened.”

The New York Times

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.