| NEW YORK
NEW YORK Feb 27 Ponzi scheme. Treasury bond.
The Standard & Poor's 500 index. The collapse of Lehman
Those were among the subjects that Annette Bongiorno said on
Thursday she did not understand, despite spending more than 40
years as one of the key employees at Bernard Madoff's investment
Bongiorno is one of five former Madoff workers on trial in
federal court in Manhattan for abetting his fraud, which fell
apart in December 2008, costing investors an estimated $17
billion in principal losses.
Facing questions from a government prosecutor about her
alleged role in concealing Madoff's multibillion-dollar fraud,
Bongiorno did not deny that she entered thousands of backdated
trades in customers' accounts, sometimes years after they had
But she said, again and again, that she was simply following
Madoff's orders, knew next to nothing about Wall Street and had
"no clue" that anything she had done was illegal.
"All the trades were backdated," she said. "I did what I was
Also on trial are former director of operations Daniel
Bonventre, portfolio manager Joann Crupi and computer
programmers Jerome O'Hara and George Perez.
Bonventre and Bongiorno have taken the witness stand in
their own defense, betting that the jury will accept their
claims that they were duped by Madoff into believing the
business was legitimate. All five defendants have said they were
unaware that Madoff, who pleaded guilty and is serving a
150-year prison sentence, was running a Ponzi scheme.
During her testimony, Bongiorno said she believed Madoff was
trading stock in bulk and then deciding later how to divvy up
the transactions among his customers, a practice she thought was
Assistant U.S. Attorney John Zach repeatedly showed
Bongiorno documents on which she had plotted out backdated
trades to enter into customer accounts, though no trading
"You were the one who wrote all these trades in?" Zach
"Yes," Bongiorno replied.
"And your testimony is that for every single one of these
trades, Mr. Madoff told you what to do?" he asked, sounding a
"Yes," she answered.
Upon Madoff's arrest, Bongiorno said, she had to ask another
employee what a Ponzi scheme was. And under questioning from
Zach, she said she couldn't explain the difference between a
stock and a bond and struggled to define the S&P 500.
At one point, Zach showed Bongiorno documents indicating
that sales of Lehman Brothers stock were entered into her
account in October 2008, a month after the investment bank
collapsed, but backdated to August.
"Do you remember what happened to Lehman Brothers in
September 2008?" Zach asked.
"No, but I guess you're going to tell me," she said.
Zach then showed Bongiorno several front-page newspaper
articles from that month about the financial crisis and
questioned her about the timing of the backdated trades.
"That didn't raise a red flag for you?" he asked.
"If I was told to do it, I did it," she said.
Zach also sought to demonstrate that Bongiorno used proceeds
from the fraud to finance a luxurious lifestyle, showing the
jury photographs of her Bentley sedan and the high-end
condominium in Boca Raton, Florida, where she planned to
purchase a $6.5 million home.
The trial, which began more than four months ago, will
resume on Monday and is expected to end in March.
The case is USA v. O'Hara et al, U.S. District Court,
Southern District of New York, No. 10-cr-0228.