NEW YORK - Frank DiPascali, epic fraudster Bernard Madoff's deputy and a key witness in the only US criminal trial to spill out of the collapse of his multibillion-dollar Ponzi scheme, has died, his lawyer said Sunday.
DiPascali, 58, died of lung cancer on May 7, said his attorney, Marc Mukasey. He had been set to be sentenced by a federal judge in Manhattan in September after pleading guilty to charges including securities fraud and conspiracy as part of a co-operation agreement. "He was grateful to have been able to make some amends by helping the government these past few years," Mukasey said in a statement.
Cooperators are typically sentenced after an investigation is complete in order to give judges a full picture of the extent of their assistance.
Madoff, 77, is serving a 150-year prison term after pleading guilty in 2009 to running a scheme that cost investors more than an estimated USD$17 billion (S$22.6 billion) in principal.
He was arrested in December 2008 as the economic downturn prompted customers of Bernard L. Madoff Investment Securities LLC to seek redemptions that he was unable to cover.
While Madoff said he acted alone in the fraud, prosecutors ultimately secured the trial convictions or guilty pleas of 14 other people, including DiPascali.
DiPascali, who worked for Madoff for 33 years and rose to become chief financial officer and his right-hand man, was the third person to plead guilty, agreeing to co-operate with authorities in hopes of receiving a lenient sentence. "I don't how I went from being an 18-year-old kid who didn't have a job to standing here in the court today," DiPascali said during his August 2009 plea hearing. "I didn't know anything about Wall Street." DiPascali became the star witness in the trial of five former Madoff employees, testifying that they took part in creating fake records to hide the fact that no trading was occurring in customer accounts.
While DiPascali acknowledged knowing those efforts were illegal, he said Madoff convinced him that he had money elsewhere. "I understood the entire fraud to be something other than it was," DiPascali testified.
Lawyers for the employees - former back office director Daniel Bonventre, portfolio managers JoAnn Crupi and Annette Bongiorno and computer programmers Jerome O'Hara and George Perez - countered that DiPascali was a liar.
A jury in March 2014 found the five guilty on all counts, including securities fraud and conspiracy.
A federal judge earlier this year imposed prison sentences of 10 years for Bonventre, six years for Bongiorno and Crupi and 2-1/2 for O'Hara and Perez.