There was news earlier this week of Madoff Lieutenant Frank DiPascali’s expansive guilty plea (to 10 felony counts). This broad plea accompanied by loud hints of expansive cooperation with the federal government raises the question of whether Mr. DiPascali was Madoff’s main man; his aide de camp, his Tonto, his Robin, his Hutch, his Watson or his Sundance Kid.
DiPascali admitted under oath he fictionalized customer statements for over 20 years. Using various mechanisms, they together wrote one novel (phony account statements) after another – each more fanciful than the last. No doubt DiPascali worked closely with Madoff and knows where many of the bodies are buried.
But was this the guy who repeatedly stumped the SEC, an array of other regulators, scores of investors and the street for all those years.
I think not.
Nothing in his background suggests the level of genius required in:
finance
math
technology;
politics; and
fiction
DiPascali attended Archbishop Molloy High School in Briarwood Queens. Everything he learned about Wall Street – he learned from Madoff who took him in as a “research analyst” in 1975. His genius was his loyalty– but did he have the stuff of a mastermind or even an number 2.
I don’t think so.
Not that mastermind criminals need an advanced degree from MIT. (think Jesse James and John Dillenger).
My gut (and a little experience as a federal prosecutor) says this isn’t the guy -- this scheme had too many moving parts. Over 6000 investors and $65 billion just for starters. Remember, since Madoff was not buying stocks or bonds or any securities for that matter
– they had a lot, a lot of money to move.
So I put DiPascali at VP of Operations -- an inside guy. He likely knows no more than Peter Madoff, Chief of Compliance or the Madoff sons but likely less than Ruth Madoff and other “friends of Bernie”. I would keep my eye on Madoff’s banker at JPMorganChase. In all those years, they had to know – securities were not being purchased and money was just circling from new to old investors.
So maybe that explains why Judge Sullivan denied Dipascali his release:
a release that the government had agreed to.
Maybe Judge Sullivan recognizes Dipascali has every reason to flee – 125 years of reasons to flee – and he has nothing more to give the feds. But surely someone else does?
Steve Berk, August 12, 2009
Steven N. Berk has over twenty years of litigation experience spanning both the private and public sectors. His practice ranges from representing Fortune 500 Companies, to consumers. Steven is based in Washington, D.C. and founded Berk Law in May 2009....
