Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Madoff employees trial tells of the final days

12 December 2013, 11:16

New York - Bernard Madoff's former right-hand man summed up his boss's arrest exactly five years ago with two words: "Madoff Implodes".

The words in Frank DiPascali's diary entry for 11 December 2008, were shown to jurors on Wednesday on the fifth anniversary of Madoff's fall. The jurors are hearing evidence in the trial of five of Madoff's former employees, who say the New York financier duped them all.

Weeks of testimony in the only criminal trial to result from the collapse of Madoff's once high-flying business culminated in the government's star witness describing the final days of an epic fraud that cost thousands of investors nearly $20bn.

On Tuesday, DiPascali told jurors that Madoff was crying when he revealed he was out of money more than a week before federal authorities and the rest of the world learned the truth.

On Wednesday, DiPascali said Madoff followed up his 3 December 2011, meeting with him by asking him to collect boxes of documents to shred.


DiPascali said he put together more than two dozen boxes of documents as Madoff "very meticulously" went over a client list to identify employees and family members to whom he planned to disburse the nearly $300m that remained.

DiPascali said he realised Madoff had digressed from his careful plan to notify immediate family only after consulting his attorney and destroying documents when his wife, Ruth, who appeared stunned as she passed out gifts at the offices on the day of the company's Christmas party, on 10 December.

"She looked catatonic," he said. "She looked horrible, like she was crying all day. Immediately, I thought he told her."

DiPascali said he skipped the party and was home the next morning when his cellphone rang. Madoff was on the line.

"Frank, the FBI is in the office with my brother," he recalled Madoff telling him.

'Scream out'

DiPascali said he asked why Madoff was calling him and promptly "threw the phone across the room".

DiPascali said he expected to be arrested and began destroying more evidence, including smashing computer flash drives on the floor of his Bridgewater, New Jersey, home. He said he also tossed a gun he owned in a nearby waterway.

When he went to the office later in the day, DiPascali said, "I was shaking." He said "all sorts of regulators and federal authorities" were there, along with Madoff's brother, and he testified that he lied to them.

Later in the day, the announcement of Madoff's arrest came across one of the television monitors, and DiPascali said he heard somebody at Madoff's firm "scream out" when news of his arrest first broke on a financial television programme on one of the company's monitors.

After meeting with his lawyer over the following weekend, DiPascali said, he decided to co-operate and tell the truth. He pleaded guilty to criminal charges in August 2009 that carry the potential for as many as 125 years in prison.

He said he must wear an electronic ankle bracelet and cannot leave his residence without an FBI agent along. He said he surrendered his assets, including his home and car.

His testimony may have helped some defendants, since he conceded on cross-examination that he went to great lengths to shield employees from knowing about the fraud.

'Stick to my story'

He said he made up a story just days before the fraud was revealed to get information he needed from one defendant, Madoff's former long-time secretary Annette Bongiorno because he feared she would "jump out the window when she found out Bernie was out of money".

And his credibility was questioned as he admitted that he perjured himself repeatedly in 2006 testimony to the Securities and Exchange Commission and told countless lies to investors, fellow employees and government regulators since 1975, when he joined the firm.

But his effort to get leniency at sentencing may have gained ground with his testimony that he revealed the fraud to defendant JoAnn Crupi, one of Madoff's account managers, on 4 December 2008, during a walk down a midtown Manhattan street.

After Madoff's arrest, he said, he hugged her and they exchanged Christmas greetings when they encountered each other outside a lawyer's office. He said she emerged from a conference and told him: "I'm going to stick to my story."

- AP


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...