Frank DiPascali, 57, is expected to provide an insider description of the scam and the roles the five allegedly played in helping Madoff steal more than $17 billion from thousands of charities, celebrities, ordinary investors, financial firms and other entities.
He pleaded guilty in August 2009 to 10 counts of conspiracy, fraud and other charges, and faces a potential 125-year maximum prison term. Hoping to gain leniency, DiPascali cooperated with federal investigators probing the decades-long scheme and agreed to testify.
"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 as he pleaded guilty to U.S. District Court Judge Richard Sullivan.
Prosecutors detailed DiPascali's continuing cooperation in a heavily-redacted Nov. 15 letter filed with Sullivan. The judge set a sentencing update for May 2014.
The defendants who will face their familiar ex-associate on the witness stand are: Daniel Bonventre, Madoff's former director of operations; Annette Bongiorno, a former executive assistant; JoAnn Crupi, another ex-assistant; and former computer programmers Jerome O'Hara and George Perez.
Although they received large salaries and other financial perks from Madoff, all have pleaded not guilty and claimed they, too, were victims of their former boss.
The five are charged in a 10-count criminal conspiracy and fraud indictment. Prosecution presentation opened Oct. 16 in Manhattan federal court and so far has consisted of lower-level Madoff associates who have pleaded guilty and other witnesses.
Aware of the impact DiPascali's unsavory central role in the scam could have on jurors, prosecutors are expected to argue it was necessary to secure his testimony! to provide detailed first-hand evidence of the mechanics of the fraud.
But defense lawyers signaled during their opening statements last month that they planned to argue that DiPascali would say anything to shorten his potential prison term, and thus can't be trusted to tell the truth.
O'Hara defense lawyer Gordon Mehler argued that recruiting DiPascali to testify against the former co-workers was "the equivalent of the Big Bad Wolf getting on the witness stand and condemning Little Red Riding Hood."
DiPascali's expected appearance comes days before the five-year anniversary of the scam's collapse. Struggling with investor withdrawals in the wake of the national financial crisis, Madoff confessed to his sons in December 2008, and they alerted authorities.
Madoff, 75, subsequently pleaded guilty without standing trial. He's now serving a 150-year prison sentence in a North Carolina federal facility.
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