Frank DiPascali, for one, knew it was a fraud from his first day on the job. Didn't stop him from working there for another 38 years, but the point is, he knew what was up from the beginning, Dipascali said today in court.
Bernard Madoff’s finance chief, who pleaded guilty to aiding his $17 billion fraud, said he could tell right away that fake trades were being used in customer accounts in 1975 when he joined the firm after high school. The fraudulent trading went on “for as long as I could remember,” Frank DiPascali, 57, told a jury in Manhattan federal court today at the trial of five former colleagues. “It was virtually impossible not to know what was happening.” DiPascali, who started working for Madoff as a researcher when he was 19, is the highest-ranking former Madoff executive to testify in the first criminal trial stemming from the Ponzi scheme, which the U.S. has said began in the early 1970s and collapsed at the peak of the financial crisis...DiPascali told jurors today there was no way employees at Madoff’s investment advisory unit could have confused fake trades for real ones, because the real trading taking place at Madoff’s broker-dealer involved counterparties, current trading prices and the coordination of several people making simultaneous phone calls “in a very noisy environment.”
By comparison, the fake trading in the investment advisory unit was based on historical prices taken out of newspapers and given to Bongiorno on index cards in a small, metal box about once a month, he said.