Madoff Family Members Could be Target of Next Round of Indictments

After months of investigations, Federal prosecutors may be going after members of Bernard Madoff’s family. Madoff, 71, was recently sentenced to 150 years in prison for running a massive Ponzi scheme that is estimated to be the largest in history and which has allegedly cost investors as much as $65 billion.

Most recently, Frank DiPascali, finance head at Madoff’s investment advisory firm—Bernard L. Madoff Investment Securities LLC—agreed to plead guilty. To date, only DiPascali, Madoff, and the firm’s external accountant, David Friehling have been charged with any crimes.

The Securities and Exchange Commission (SEC) has come under fire for apparently missing warnings that something was amiss with Madoff’s investment advisory business and has been shamed for its inability to detect Madoff’s fraud and its role in the well-publicized investment bank collapse, which has been blamed—in part—for the current financial downturn, said the Washington Post previously.

The disgraced financier apologized at his sentencing in June for lying to thousands of investors; deceiving his wife, Ruth; his brother, Peter; and his sons, Andrew and Mark, said Bloomberg.com. Peter, the firm’s chief compliance office is considered quite vulnerable as far as ongoing investigations are concerned.

Although Bernard was initially stripped of $171 billion and all of his personal property, as well as $80 million in assets Ruth claims were hers, the wife of the mastermind still walked away with $2.5 million, more than many of Madoff’s duped investors.

According to The Daily Beast, an FBI source said investigators have collected evidence against Madoff’s family members, citing specifically, Bernard’s brother, Peter, and his sons, Andrew and Mark. “There is enough hard evidence [against the family members] that the U.S. Attorney’s office could provide to a grand jury,” said the FBI source, quoted The Daily Beast. “Whether they will is anybody’s guess. They’re in a mess over there. They really don’t know what they’re doing,” the source added.

Prosecutors also consider Annette Bongiorno to be “a person of interest,” said The Daily Beast. Bongiorno allegedly told employees at the firm to “falsify statements and create bogus data rather than execute real trades for clients,” said The Daily Beast, which also cited a note written by Bongiorno that ordered “an employee to falsify client statements and not to argue about it.” In a previous story that was broken by The Daily Beast, authorities searching a warehouse in Queens, New York, found 20 million documents related to the case. The letter penned by Bongiorno was among the documents.

Previous reports, said The Daily Beast, discussed that Bongiorno was also known to have directed her assistants to check stocks, average the previous month’s pricing, and send bogus statements to clients.

Late last month federal marshals began inventorying possessions from Ruth and Bernard Madoff’s $7.5 million Manhattan penthouse and $3.5 million Montauk home in anticipation of an auction. Newsday reported that the contents at both well-appointed properties included a Steinway piano and silverware and that the properties and tens of millions of dollars in assets were turned over to the government when Madoff was sentenced. A $10-million Palm Beach house was surrendered in 2009, reported Newsday and Madoff’s yacht and other boats are slated to be sold. Lawyers in France said a yacht there is under the control of the French courts, added Newsday. Ruth Madoff was previously removed from the New York penthouse by marshals.

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