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Bernie Madoff's CFO Figured Out The Whole Thing Was A Scam Sometime In The Late 80s

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At which point he decided he'd stick around for another 20 or so years.

As a top lieutenant to Bernard L. Madoff, Frank DiPascali Jr. spent much of the past three decades safeguarding secrets. But the 56-year-old Queens, N.Y., native is about to spill some of them. Mr. DiPascali, now under house arrest in an undisclosed location, is set to take the stand as a key government witness in its criminal case against five former employees of the convicted Ponzi-scheme operator at Bernard L. Madoff Investment Securities LLC...Mr. DiPascali was 18 years old when he joined Mr. Madoff's firm in 1975. He stayed for 33 years. At the time of his guilty plea, Mr. DiPascali said he long thought Mr. Madoff ran a prestigious, successful company. In the late 1980s or early 1990s, though, Mr. DiPiscali realized no trading was happening in the accounts held by Mr. Madoff's investment-advisory clients, according to the former employee. Rather than blow the whistle, Mr. DiPascali admitted to helping keep the fraud alive. He began lying to clients and faking documents to maintain the illusion of profitable trades.

His loyalty paid off. U.S. securities regulators claimed Mr. DiPiscali got more than $2 million a year in salary and bonuses, and an office on the 17th floor of the skyscraper known as the Lipstick building in Midtown Manhattan, where much of the fraud was carried out. "It was all fake," he said at a court hearing. "It was all fictitious."

Cooperator Frank DiPascali Tapped for Key Role in Trial of Madoff Employees [WSJ]