|Frank DiPascali, Jr.|
DiPascali in 2009
Queens, New York, US
|Occupation||director of options trading
chief financial officer
|Known for||Ponzi scheme, director of options trading and chief financial officer of Bernard L. Madoff Investment Securities (prior)|
|conspiracy, securities fraud, investment advisor fraud, mail fraud, wire fraud, perjury, income tax evasion, international money laundering, falsifying books and records of a broker-dealer, and falsifying books and records of an investment advisor|
Frank DiPascali, Jr. (born October 28, 1956) worked for Bernard L. Madoff Investment Securities LLC for 33 years and was a key lieutenant of Bernard Madoff. He referred to himself as "director of options trading" and as "chief financial officer". On August 11, 2009, he pled guilty to ten counts related to the Madoff investment scandal. He was denied bail before sentencing and immediately jailed. He has been represented by attorney Marc Mukasey, a son of former U.S. Attorney General Michael Mukasey. Mukasey said that while Mr. DiPascali was “1,000 percent guilty”, he had believed—before the Ponzi scheme collapsed—that Madoff could somehow repay his clients.
DiPascali grew up next door to Annette Bongiorno, Madoff's long time personal secretary. She recruited him to work for Madoff. He graduated from Archbishop Molloy High School in Queens, New York in 1974, and joined Madoff's firm in 1975, ultimately rising to be CFO. According to him, he was enrolled at St. John’s University and Brooklyn College. DiPascali and his wife, JoAnne, lived in a five-bedroom house with a pool on seven acres in Bridgewater Township, New Jersey assessed at $1.38 million. They had two black Mercedes and a 61-foot boat, registered to Dorothy-Jo Sportfishing LLC.
Di Pascali's brother-in-law, Robert Cardile, bought his former house in Bridgewater for $400,000. Cardile began working for Madoff in 1985, and responded to phone inquiries for DiPascali.
In January, 2005, a tax lien of $77,479 by the IRS for the 1996 tax year was paid by DiPascali three months later. In 2000 New Jersey unpaid taxes of $72,943 were paid. In 1993, New York State Tax Commission filed an action for $21,685, which was also paid.
Financial journalist and Madoff biographer Erin Arvedlund describes DiPascali as an abrasive man who padded his resume. Since 1975, at age 18, DiPascali eventually oversaw the day-to-day operations of Madoff's investment-advisory business. He became the director of options in 1986, and CFO in 1996. He also claims to have been a director of Madoff Securities International in London. He was the person many of Madoff's investors dealt with regarding their accounts. Madoff told investors DiPascali executed trades. However, a court-appointed trustee found that no trading had occurred for at least 13 years. Prosecutors have asked at least three employees, Eric Lipkin, JoAnn Crupi, and Robert Cardile, DiPascali's brother-in-law, about his role in the firm. Investors spoke to these other employees and would fax orders if they needed to withdraw money. DiPascali's name was sometimes given as an alternate contact.
Criminal and civil complaints and guilty plea
According to an SEC memo, DiPascali "responded evasively" to questioning following Madoff's arrest.
DiPascali pleaded guilty on August 11, 2009, to 10 federal criminal charges: conspiracy, securities fraud, investment advisor fraud, mail fraud, wire fraud, perjury, income tax evasion, international money laundering, falsifying books and records of a broker-dealer, and falsifying books and records of an investment advisor. He admitted to the US District Court that he learned in the late 1980s or early 1990s that no trading was occurring in Madoff's investment-advisory client accounts. About 2002, he set up an account for himself at the firm named after his fishing yacht, Dorothy Jo. Having never made a contribution, he withdrew more than $5 million. His salary and bonuses was over $2 million annually. He recounted how he, Madoff, and "other people" manipulated account statements, leading clients to believe that they were creating wealth for them. "No purchases or sales of securities were actually taking place in their accounts. It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time." He has agreed to connect the dots and to name names, with sentencing anticipated in May, 2010. He faces a maximum sentence of 125 years in federal prison. Prosecutors are seeking more than $170 billion in forfeiture, the same amount sought from Madoff, which represents funds deposited by investors and later disbursed to other investors. The same day, a Securities and Exchange Commission civil complaint was filed against DiPascali.
Prosecutors continue to seek bail for him, but the presiding Judge Richard J. Sullivan has contended he is a flight risk. At a bail hearing on October 28, 2009, United States Federal Judge Sullivan, deferred a decision and requested additional information, while a representative of the victims of the scheme opposed DiPascali's release. According to the Federal Bureau of Prisons, Frank DiPascali, register number 62586-054, was released November 12, 2009.
The Madoff case is U.S. v. Madoff, 09-cr-213, U.S. District Court, Southern District of New York (Manhattan).
- Affinity fraud
- Financial crisis of 2007–2010
- Participants in the Madoff investment scandal
- Recovery of funds from the Madoff investment scandal
- Voreacos, David (August 10, 2009). "Ex-Madoff Finance Chief Could Point U.S. to Other Accomplices". Bloomberg. Retrieved August 10, 2009.
- Eposito, Richard; Megan Churchman, and Brian Ross (11 August 2009). "Bernard Madoff's Right Hand Man Pleads Guilty, Will Tell All". ABC News. Retrieved 11 August 2009.
- "United States v. Frank DiPascali, Jr., 09 Cr. ___ (RJS)". ABC News. 11 August 2009. Retrieved 11 August 2009.
- "Madoff put under curfew as he seeks people to vouch for him". USA Today. 2008-12-17. Retrieved 2009-04-21.
- Voreacos, David; David Glovin and Patricia Hurtado (January 16, 2009). "Madoff’s ‘Street-Smart’ Aide DiPascali Was Investors’ Go-To Guy". Bloomberg (Bloomberg.com). Retrieved June 16, 2009.
- "‘It Was All Fake': Madoff Aide Details Scheme". The New York Times. August 12, 2009. Retrieved May 2, 2010.
- Page 2: Frank DiPascali Pleads Guilty, Bernard Madoff's Accomplice - ABC News
- "Madoff's ‘Street-Smart' Aide DiPascali Was Investors' Go-To Guy". Bloomberg. January 16, 2009.
- Antilla, Susan (August 10, 2009). "Madoff Got Cozy With SEC, Ran Ponzi Scheme on Creaky IBM: Books". Bloomberg. Retrieved August 11, 2009.
- Bray, Chad; Lauricella, Tom (August 12, 2009). "'All Fake': Key Madoff Executive Admits Guilt". The Wall Street Journal.
- Efrati, Amir (March 9, 2009). "Madoff Aide Allegedly Got Fake 'Tickets' of Trading". The Wall Street Journal.
- Lucchetti, Aaron; Efrati, Amir; Lauricella, Tom (January 21, 2209). "Madoff's Point Man Is Cast in Same Role for Prosecutors". The Wall Street Journal. Retrieved March 25, 2009.
- Efrati, Amir; Aaron Lucchetti and Tom Lauricella (December 23, 2008). "Probe Eyes Audit Files, Role of Aide To Madoff". The Wall Street Journal (Dow Jones). Retrieved December 23, 2008.
- United States v. Frank DiPascali, Jr., 09 Cr., ABC
- DiPascali Faces Conspiracy, Fraud, Tax Charges, Bloomberg, August 11, 2009
- Glovin, David and Voreacos, David (August 8, 2009). "Ex-Madoff CFO DiPascali to Be Charged, Plead Guilty, U.S. Says". Bloomberg.
- Healy, Jack (August 11, 2009). "Madoff Aide Says Scheme ‘Hurt Thousands of People’". New York Times. Retrieved August 11, 2009.
- Frank DiPascali Pleads Guilty, Bernard Madoff's Accomplice - ABC News
- The Wall Street Journal http://online.wsj.com/public/resources/documents/SEC2009-182.pdf
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- Henriques, Diana B. (October 17, 2009). "Prosecutors Again Seek Bail for Man Who Helped Madoff". The New York Times. Retrieved May 2, 2010.
- McCoy, Kevin (October 29, 2009). "Judge delays decision on bail for Madoff aide DiPascali". USA Today. Retrieved May 2, 2010.
- Frank DiPascali DOJ Information/Plea Agreement (August, 2009)