In his own sinister way, you have to admit that Bernie Madoff was a very clever fellow. From the outset however, we all should have realized that no one could be that clever. As it has turned out, Bernie had plenty of help and ignorance is no defense.
Despite Bernie expressing to the world that he acted alone, this past week five of his formerly faithful employees will now be doing what is commonly known as the “perp walk.”
In an Associated Press article (March 24, 2014), we learn that:
“Prosecutors unveiled hundreds of exhibits and showcased dozens of witnesses to try to prove charges against Annette Bongiorno, Madoff’s longtime secretary; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and Jerome O’Hara and George Perez, both computer programmers.”
Thirty three counts were leveled against this group. Not all of them had the same numbers of charges, but what they did have in common was conspiracy. The group worked together to separate investors from their money. The case showed that the group had worked together in order to defraud billions; in fact, $20 billion. It was an elaborate scheme – and all very official looking on each monthly statement, but in the end, major investors and minor alike, lost everything they had invested.
Tepid defenses
According to the report:
“Bongiorno and Bonventre testified for several days in their own defense. They insisted they were victims of Madoff’s fraud as well, losing millions of dollars they had invested with him because they believed in and trusted him…Bongiorno, 65, told the jury she once asked how the firm was ‘making money when everyone else was losing money.’ Madoff told her they could make money in a down market by shorting stocks. Bongiorno said she believed him.”
The case is further confusing because another ex-employee and the operation’s finance chief, Frank DiPascali, cooperated with the prosecution. DiPascali admitted under oath that he used Perez and O’Hara to fabricate his monthly financial statements and essentially whenever they got suspicious, he put them on a new project.
Everyone charged with conspiracy said that they had lost money too, but let’s not be so fast.
We are the victims
It would be easier for me to write about this case if I could find just one hero in the bunch. It is hard to do. Before the case exploded in Madoff’s face, Ms. Bongiorno referred to Mr. Madoff as “her hero.” I will grant you that Madoff did some nice things for her family such as getting Ms. Bongiorno’s mother into a nursing home. But come on now; she worked for Bernie for almost 40 years. It is not possible to work in any capacity on Wall Street for 40 years and not have one clue about the stock market. If Bernie was making money by “shorting stocks,” don’t we suspect that another firm or several firms – somewhere, might have thought of that strategy as well?
As for the two computer programmers, it would emerge that they were intentionally falsifying records and manipulating transactions. Did no one tell them that such activities were illegal?
In my opinion, I think the programmers believed they were playing a high-tech game and that they were in on a private secret. If Bernie Madoff wanted his investors to see a double-digit return, then by golly, they could generate that outcome. It was a game.
As to the boss (DiPascali) who testified against his own people in order to save his own hide, he might escape judicial scrutiny, but as for ethical scrutiny, he will never be right in my eyes.
I view none of the accused as victims. The Madoff case is very much like a highly contagious disease. Everyone who came into contact with it became sick. But they all had a choice.
Some will say this case was about greed. I say it was about a lack of an ethical grounding. Sooner or later, it was bound to happen but let’s not deceive ourselves into thinking that Bernie acted alone.
Important to realize…
This case shows with crystal clarity that one cannot use Ignorance as a defense. Madoff plead guilty, but his associates who helped perpetrate the crime were guilty as well. Don’t say “I didn’t know” and think you’ll be set free!
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