The jury — eight women, four men and six alternates — listened as Assistant U.S. Attorney Matthew Schwartz said the defendants fabricated stock trades, created phony books and records, built a computer program that automated the scam and lied to investors, regulators and banks for decades.
Their actions allegedly helped perpetuate the elaborate fiction that Madoff generated eerily steady returns from stock trades when in reality he was using some customers' money to pay others.
"For more than 30 years, Bernard Madoff ran a multi-billion dollar fraud that turned out to be the largest Ponzi scheme in history," said Schwartz. "These are the people who helped him do it."
During a more than hour long opening government statement, Schwartz pointed at each of the five in turn and then outlined their alleged role in the conspiracy. Madoff could not have kept such an elaborate scheme running for decades alone, said Schwartz.
JoAnn Crupi and Annette Bongiorno decided which stocks and bonds to say that Madoff had purchased when in fact there were virtually no trades, said Schwartz.
Jerome O'Hara and George Perez "created customized computer programs that automated the lying," said Schwartz.
Daniel Bonventre "cooked the books," hiding the scheme from banks and regulators and even helping Madoff evade taxes for decades, said Schwartz.
Why did they do it, asked Schwartz. "The most simple reason of all: greed."
Crupi grew wealthy working for Madoff, buying a $2.7 million beach house with money allegedly stolen from the scam and even charging personal expenses to the Madoff firm's corporate card, he said.
Bongiorno similarly raked in millions of dollars and also withdrew $! 2,000 weekly in "walking around" money on top of the other stolen funds, Schwartz said.
O'Hara and Perez collected more than $100,000 each from the scam and once hit up Madoff for a payment in diamonds so the transaction couldn't be traced, said Schwartz.
And Bonventre got more than $1 million he used to pay common charges on his Manhattan apartment, his country club bill, a son's tuition bill and other personal expenses, he said.
The government's opening statement offered the first inside glimpse into the workings of the scheme. Schwartz said prosecutors plan to present evidence and testimony from investigators, banks, and even some investors who were conned out of their life savings by the scam during a trial that is expected to last as long as five months.
Prosecutors have listed up to 100 potential government witnesses. The star is expected to be Frank DiPascali, Madoff's former chief financial officer. The 57-year-old Queens, N.Y. native waived indictment by a grand jury and pleaded guilty to ten counts of conspiracy, fraud and other charges in Aug. 2009.
"I'm standing here to say that from the early 1990s until December 2008, I helped Bernie Madoff and other people carry out a fraud," DiPascali said at that plea hearing.
Defense lawyers were scheduled to give their opening statements Thursday.
Madoff pleaded guilty in 2009 without standing trial. Now 75, he's serving a 150-year federal prison sentence at a medium-security federal prison in Butner, N.C.
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