UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 13, 2009

MADOFF AIDE EXPLAINS HOW IT WAS DONE

NY Times - Frank DiPascali was a "kid from Queens" fresh out of high school when he landed a job in 1975 with a rising star on Wall Street named Bernard L. Madoff.

On Tuesday, Mr. DiPascali stood in a federal courtroom in Lower Manhattan and admitted that, for at least the last 20 years, he had helped Mr. Madoff carry out one of the biggest frauds in Wall Street history.

Indeed, he detailed for the first time how he and unidentified others helped Mr. Madoff perpetuate the crime - using historical stock data from the Internet to create fake trade blotters, sending out fraudulent account statements to clients and arranging wire transfers between Mr. Madoff's London and New York offices to create the impression that the firm was earning commissions from stock trades. . .

Mr. DiPascali described how he, Mr. Madoff and unidentified "other people" created fake account statements, shuffled money between bank accounts and perpetuated a years-long fairy tale that they were making money for clients of Bernard L. Madoff Investment Securities.

"No purchases or sales of securities were actually taking place in their accounts," Mr. DiPascali said. "It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time."

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