Five former aides to investment manager Bernard Madoff were convicted on Monday of charges that they helped their boss conceal his multibillion-dollar Ponzi scheme for years.
A federal jury in New York found back-office director Daniel Bonventre, portfolio managers Annette Bongiorno and Joann Crupi, and computer programmers Jerome O'Hara and George Perez guilty on all counts, including securities fraud and conspiracy to defraud clients.
The trial lasted more than five months. The five defendants will be sentenced in late July.
"These five defendants played crucial roles in constructing and maintaining the house of cards that was the Madoff investment fraud," U.S. Attorney Preet Bharara said in a statement. "The scheme these defendants helped perpetrate cost innumerable investors their life savings. Now it likely will cost the defendants their freedom."
Madoff, 75, is serving a 150-year-prison sentence after pleading guilty in March 2009 to charges stemming from a Ponzi scheme that is estimated to have cost investors more than $17 billion of principal. He was arrested in December 2008.
Nine other people have pleaded guilty in connection with Madoff's fraud, some of whom testified at the trial as cooperating government witnesses.
As the verdict was read in court, there was no visible reaction from the defendants, who faced among them a total of 31 counts from securities fraud to tax evasion.
"The list of Bernard Madoff's victims now includes these five former employees," Andrew Frisch, a lawyer for Bonventre, said after the verdict, adding that he plans to appeal.
At the trial, prosecutors introduced as evidence thousands of pages of internal documents seized from Madoff's investment firm and called dozens of witnesses.
Madoff's right-hand man, Frank DiPascali, testified as part of a plea deal with the government and implicated each of the five defendants in the fraud. Defense lawyers urged the jury to disregard his testimony, calling him an inveterate liar desperate to avoid a lifelong prison term.
But several jurors interviewed after the verdict said they found DiPascali credible.
"It was pretty captivating," said Sheila Amato, an art teacher.
Jurors scoffed at the testimony of Bongiorno and Bonventre, who surprised trail watchers by taking the stand in their own defense and denying knowing about any fraud.
"They should be embarrassed," said Nancy Goldberg, an instructional assistant for at-risk public school students. She said their testimony was simply not believable.
While there was little dispute that various defendants engaged in activities such as backdating fake trades and creating false documents, the case turned on whether they knew at the time that they were aiding Madoff's fraud.
The defendants had said Madoff duped them into becoming unwitting accomplices. Madoff, they said, created silos inside the firm to ensure that no aide could see the entire picture and used his considerable charm to keep them in the dark.
"Why wouldn't she believe him?" Roland Riopelle, the lawyer for Bongiorno, said during his closing argument, arguing that Madoff convinced her that backdating trades was allowed. "He was the head of the firm and the chairman of NASDAQ. She was by design, by Mr. Madoff's design, living in her own little bubble."
But prosecutors pointed to reams of documents, many featuring handwritten notes from the defendants, as clear evidence the defendants knew what was happening.
"The notion that these defendants didn't know the trading was fake is an absurdity," Assistant U.S. Attorney Randall Jackson said at the end of the trial.
Asked whether the defense could have anything differently, Eric Breslin, a lawyer for Crupi, said, "Madoff was a tall mountain to climb."
The case is U.S. v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-00228.