(Corrects to add Lipkin surname in 12th paragraph)
By Basil Katz
NEW YORK, Nov 8 (Reuters) – One of Bernard Madoff’s
longest-serving employees pleaded guilty on Thursday to
falsifying records, a conspiracy that a prosecutor said began in
the 1970s at the start of the multibillion-dollar Ponzi scheme.
Irwin Lipkin, 74, a former controller of Bernard L. Madoff
Investment Securities LLC, told a Manhattan federal court judge
that for years he fudged the books on Madoff’s orders, but that
at no point did he suspect the epic, decades-long fraud.
“While working for Bernie Madoff, I made accounting entries
in financial records that I knew were inaccurate,” Lipkin said.
“At no time before I retired was I ever aware that Mr Madoff or
anyone else at the company was engaged in the Ponzi scheme
reported in the media.”
Lipkin, who signed a plea agreement with federal
prosecutors, pleaded guilty to charges of conspiracy to commit
securities fraud and falsifying documents. The charges carry up
to 10 years in prison.
Lipkin’s son, Eric Lipkin, another former Madoff employee,
pleaded guilty in 2011 to criminal charges of bank fraud and
charges that he reported people were Madoff employees so they
could receive retirement benefits.
Irwin Lipkin joined Madoff’s firm in 1964, he told the court
on Thursday. He was Madoff’s first employee who was not a Madoff
family member. Although he retired in 1998, he and his wife
illegally remained on the Madoff payroll and received benefits
but did not work, Lipkin said.
Prosecutor Julian Moore told judge Laura Taylor Swain that
“as early as the mid 1970s” Lipkin had begun changing the
financial records of accounts at Madoff’s direction.
Madoff, 74, was charged in December 2008 with a decades-long
fraud that the government originally estimated at as much as
$64.5 billion. He pleaded guilty in March 2009 and is serving a
150-year prison sentence.
The trustee leading the search for money to return to
Madoff’s victims says Madoff defrauded customers of about $20
billion. The trustee, Irving Picard, so far has won over $9
billion in recoveries and settlement agreements.
On June 29, Madoff’s brother Peter pleaded guilty to
criminal charges. He had been chief compliance officer at his
brother’s firm. He has agreed to accept a 10-year prison term
and will be sentenced in December.
Of more than a dozen people charged in the case, apart from
Bernard Madoff, five have pleaded not guilty and are awaiting
trial.
Among those five, Irwin Lipkin on Thursday said former
investment advisory employee Annette Bongiorno had helped him
falsify trading records. A lawyer for Bongiorno declined
comment.
The case is U.S. v. O’Hara et al, U.S. District Court,
Southern District of New York, No. 10-cr-228.
(Reporting By Basil Katz; Editing by Gary Hill)
