Madoff aide faces criminal charges
SEC calls him key in fraud case
NEW YORK - Bernard Madoff’s claim to have pulled off his multibillion dollar swindle without assistance fell apart further yesterday, as one of his longtime aides was charged with helping him cook the books.
Daniel Bonventre, an accountant who worked for Madoff since the late 1960s, was arrested early Thursday at his home in Manhattan, authorities said. He faces conspiracy, securities fraud, and tax charges.
The 63-year-old was also sued yesterday by the Securities and Exchange Commission. The SEC accused Bonventre of falsifying records both to disguise Madoff’s fraud and illegally enrich himself.
Bonventre said nothing to reporters after making his initial court appearance on the charges in the afternoon. A judge freed him on a $5 million bond, secured by $2 million in assets. His lawyer, Andrew Frisch, declined to comment.
As they announced the charges, authorities said their investigation has shown that Madoff needed a team of enablers to carry out his massive crime, including people working on the purportedly “legitimate’’ side of the family business, which processed stock trades.
Prosecutors said that, with Bonventre’s knowledge, hundreds of millions of dollars were siphoned out of accounts belonging to Madoff’s clients and used to support the other operations at Bernard Madoff Investment Securities. In some cases, he used client money as collateral to obtain loans.
“A fraud of this magnitude requires a coordinated effort. Bonventre played an essential part by creating bogus financial records to give BMIS the appearance of legitimacy, when in fact the firm lost money and could not have survived without the fraud,’’ said George S. Canellos, director of the SEC’s New York regional office.
Investigators didn’t say how many other people on the supposedly legitimate side of the operation, which was overseen by Madoff’s sons and brother, might have been aware of the fraud.
No members of Madoff’s family have been charged.
In a criminal complaint, however, prosecutors said Bonventre helped arrange millions of dollars in illegal payments and loans to certain unidentified employees and Madoff relatives. Some of the funds were used to buy luxury homes.
Madoff, 71, is serving a 150-year prison sentence after admitting that he operated a Ponzi scheme for at least two decades, cheating thousands of individuals, charities, celebrities, and institutional investors out of billions of dollars.
A number of people affiliated with the business have already pleaded guilty, including Madoff’s chief lieutenant, Frank DiPascali, who has been cooperating with authorities.