Bernie Madoff Would Have Been Hopeless Without His Secretaries


Think Bernie Madoff and his deputy Frank DiPascali were able to keep a $65 billion Ponzi scheme running for so many years because they were some kind of evil geniuses? Pfft. Think again. Like many businessmen of a certain age, they just tossed off orders. It was their administrative assistants, JoAnn Crupi and Annette Bongiorno, both charged with fraud by the SEC today, who did all of the real work: dealing with clients, making sure client redemptions didn't drain the Ponzi pool, and really just orchestrating the whole show.

Here's a day in the life of JoAnn Crupi, according to the SEC complaint:

At the beginning of each year, Madoff communicated to Crupi the rate of return the D Funds were to achieve that year. Crupi ensured that the D Funds "earned" this rate of return by using historical prices obtained from printouts from a Bloomberg terminal (such terminals facilitate access to financial information) to assemble a fictional "basket" of profitable trades, using Excel to calculate the profit of the basket. Additionally, each individual stock in the basket was hedged with fictitious puts and calls. Once Crupi had selected a profitable basket of trades, she asked DiPascali to view the basket, and then she or DiPascali would instruct the data entry clerks to run a computer program to simulate the purchase and sale of the basket by each of the D Funds, and to create confirmations and statements reflecting those trades.

And she was organized!

Crupi kept a daily record of the funds deposited in and withdrawn from the Main Ponzi Scheme Account, and memorialized this information daily on index cards and sheets that she maintained by hand.

All that, and they probably made dinner reservations too. At least it seems like they probably got good presents when Secretary's Day came around: Bongiorno was arrested at her second home in Boca Raton.

SEC Charges Two Longtime Madoff Employees with Fraud [SEC]