Frank DiPascali
Encyclopedia
Frank DiPascali, Jr. 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.
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.
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.
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.
The Madoff case is U.S. v. Madoff, 09-cr-213, U.S. District Court, Southern District of New York (Manhattan).
Bernard Madoff
Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...
. He referred to himself as "director of options
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
trading" and as "chief financial officer
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
". On August 11, 2009, he pled guilty to ten counts related to the Madoff investment scandal
Madoff investment scandal
The Madoff investment scandal broke in December 2008 when former NASDAQ chairman Bernard Madoff admitted that the wealth management arm of his business was an elaborate Ponzi scheme....
. 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.
Personal life
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 SchoolArchbishop Molloy High School
Archbishop Molloy High School is a co-educational, college preparatory, Catholic school for grades 9-12, located on in the Briarwood section of Queens in New York City, thirty minutes east of Manhattan. Molloy currently has an endowment of about $6,000,000 . The school's current principal is Br...
in Queens
Queens
Queens is the easternmost of the five boroughs of New York City. The largest borough in area and the second-largest in population, it is coextensive with Queens County, an administrative division of New York state, in the United States....
, 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
Brooklyn College
Brooklyn College is a senior college of the City University of New York, located in Brooklyn, New York, United States.Established in 1930 by the New York City Board of Higher Education, the College had its beginnings as the Downtown Brooklyn branches of Hunter College and the City College of New...
. DiPascali and his wife, JoAnne, lived in a five-bedroom house with a pool on seven acres in Bridgewater Township, New Jersey
Bridgewater Township, New Jersey
Bridgewater Township is a township in Somerset County, New Jersey, United States. , the township population was 44,464.Bridgewater Township was originally created by Royal Charter on April 4, 1749, from portions of the Northern precinct, and was incorporated as one of New Jersey's initial group of...
assessed at $1.38 million. They had two black Mercedes
Mercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
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
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
unpaid taxes of $72,943 were paid. In 1993, New York State Tax Commission filed an action for $21,685, which was also paid.
Career
Financial journalist and Madoff biographer Erin ArvedlundErin Arvedlund
Erin E. Arvedlund is a financial journalist who has written for Barron's, The Wall Street Journal, the Moscow Times, The New York Times, TheStreet.com, and Portfolio.com. On Feb. 1, 2011, her "Your Money" column debuted in The Philadelphia Inquirer...
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
Conspiracy (crime)
In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement...
, securities fraud
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
, investment advisor fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, mail fraud, wire fraud
Wire fraud
Mail and wire fraud is a federal crime in the United States. Together, 18 U.S.C. §§ 1341, 1343, and 1346 reach any fraudulent scheme or artifice to intentionally deprive another of property or honest services with a nexus to mail or wire communication....
, perjury
Perjury
Perjury, also known as forswearing, is the willful act of swearing a false oath or affirmation to tell the truth, whether spoken or in writing, concerning matters material to a judicial proceeding. That is, the witness falsely promises to tell the truth about matters which affect the outcome of the...
, income tax evasion, international money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
, falsifying books and records of a broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
, and falsifying books and records of an investment advisor
Investment Advisor
The term Investment Advisor is an individual or firm who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities...
. 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.
The Madoff case is U.S. v. Madoff, 09-cr-213, U.S. District Court, Southern District of New York (Manhattan).
See also
- Affinity fraudAffinity fraudAffinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group...
- Financial crisis of 2007–2010
- Participants in the Madoff investment scandal
- Recovery of funds from the Madoff investment scandal
External links
- Frank DiPascali DOJ Information/Plea Agreement (August, 2009)