Madoff payroll manager pleads guilty to involvement in Ponzi fraud News
Madoff payroll manager pleads guilty to involvement in Ponzi fraud
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[JURIST] Eric Lipkin, payroll manager for Bernard L Madoff [JURIST news archive] Investment Securities LLC, pleaded guilty on Monday to six criminal counts [charges, PDF] in the US District Court for the Southern District of New York [official website] related to his involvement in a Ponzi scheme that defrauded investors of billions of dollars. Lipkin admitted [Guardian report] to falsifying documents to show nonexistent account holdings, adding fake employees to the company’s payroll and lying to get a loan. The parties filed a cooperation agreement [text, PDF] indicating Lipkin’s and the prosecutors’ intent to comply with information disclosure requests and agreements. Lipkin delivered his plea to Judge Laura Taylor Swain, who said Lipkin could face up to 70 years in prison. Also on Monday, the US Securities and Exchange Commission (SEC) [official website] sued [complaint, PDF] Lipkin in the same federal court for violations of the Securities Act of 1933, Securities Exchange Act of 1934 and the Investment Advisers Act of 1940 [texts, PDF]. The SEC complaint requests that the court order Lipkin to disgorge his illegally acquired earnings and pay civil penalties.

A US bankruptcy judge approved a historic settlement [JURIST report] in January with the estate of Jeffry Picower, a friend and investor of fraudulent financier Madoff. As part of the approved settlement, Picower’s widow agreed to forfeit an unprecedented $7.2 billion to Trustee Irving Picard [WSJ report] to be returned to victims of the multi-billion dollar Ponzi scheme. In December, Picard filed close to 60 lawsuits in an attempt to recover more than $40 billion [JURIST report] from numerous banks, hedge funds and individuals, coinciding with the two-year deadline for seeking compensation. Former financial chief for Madoff, Frank DiPascali, pleaded guilty [JURIST report] in August 2009 to 10 criminal counts [charges, PDF] for his role in the Ponzi scheme. In late June 2009, Madoff was sentenced to 150 years in prison [JURIST report]. In March 2009, Madoff’s accountant David Friehling was charged with fraud [JURIST report] by the SEC. Just prior to that, Madoff pleaded guilty to 11 charges of fraud after agreeing to a partial judgment from the SEC [JURIST reports] for civil charges stemming from his role in defrauding investors.

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