Skip to main content

Madoff CFO To Sell Madoffs Down River?

  • Author:
  • Updated:

Unlike Bernie-boy, who won't be bribed to talk, longtime Madoff Securities employee and CFO since 1996 Frank DiPascali is apparently willing to "work with" federal officials, in order to get a shorter stay bunking with Bubba. Supposedly he doesn't have any dirt on Lady Ruth McMadoff or sons Mark and Andy but perhaps over time he'll be able to come up with something?

Fortune has learned that Frank DiPascali is trying to negotiate a plea deal with federal prosecutors in which, in exchange for a reduced sentence, he would divulge his encyclopedic knowledge of Madoff's scheme. And unlike his boss, DiPascali is willing to name names.
According to a person familiar with the matter, DiPascali has no evidence that other Madoff family members were participants in the fraud. However, he is prepared to testify that he manipulated phony returns on behalf of some key Madoff investors, including Frank Avellino, who used to run a so-called feeder fund, Jeffry Picower, whose foundation had to close as a result of Madoff-related losses, and others. If, for example, one of these special customers had large gains on other investments, he would tell DiPascali, who would fabricate a loss to reduce the tax bill. If true, that would mean these investors knew their returns were fishy. (Lawyers for Avellino and Picower declined to comment. Marc Mukasey, DiPascali's attorney, says, "We expect and encourage a thorough investigation.")