By Joseph Ax
NEW YORK, March 6 The government's star witness
in the criminal trial of five former Bernard Madoff employees is
a lifelong liar whose capacity for falsehood rivaled only that
of Madoff himself, lawyers for two defendants told a federal
jury on Thursday.
Making closing arguments in New York federal court after
five months of testimony and a six-hour government summation,
lawyers for the defendants sought to undermine the testimony of
former Madoff lieutenant Frank DiPascali, who spent weeks
describing how all five defendants were complicit in a dizzying
array of fraudulent activity.
Larry Krantz, who represents computer programmer George
Perez, called DiPascali a "con man's con man" and said, "Mr.
Perez was used, abused and manipulated by two of the greatest
criminal masterminds of all time: Bernie Madoff and Frank
Eric Breslin, the lawyer for portfolio manager Joann Crupi,
referred to DiPascali's "corrupt and rotten essence, which
permeated this courtroom for a month."
The five defendants are charged with helping perpetrate a
massive Ponzi scheme at Madoff's investment firm. In addition to
Perez and Crupi, they include another computer programmer,
Jerome O'Hara; portfolio manager Annette Bongiorno; and the
firm's operations director, Daniel Bonventre.
All five have argued that they were duped by Madoff into
thinking the firm's investment advisory business was legitimate
and only later found out that no trading took place in that
Madoff himself is serving a 150-year prison sentence after
pleading guilty to the scheme, which cost investors
approximately $17 billion in principal losses when it collapsed
Prosecutors have said Perez and O'Hara wrote computer
programs that generated millions of false trading records to
fool U.S. Securities and Exchange Commission investigators and
Those programs included code that assigned random
transaction numbers, time stamps and even banking counterparties
to make the trading activity seem more real. There could be no
legitimate reason to create such code, Zach said in closing
arguments earlier this week.
The government also accused Crupi of backdating countless
fake trades in customer accounts, helping to forge documents for
auditors and overseeing cash flow in the bank account where the
fraud was centered.
Both Krantz and Breslin argued that their clients were just
like many other employees at Madoff's firm who participated in
the fraud without realizing what was happening, thanks to
Madoff's talent for deception.
Breslin invoked Buell Frazier, the man who unwittingly drove
Lee Harvey Oswald to the book depository in Dallas on the day he
assassinated President John F. Kennedy and accepted Oswald's
statement that the bag carrying his rifle actually contained
"There were a lot of blameless people at Madoff Securities,"
When Perez and O'Hara became suspicious in 2006 about how
their programs were used, Krantz said, they told DiPascali and
Madoff they were no longer "comfortable" writing programs that
altered past statements.
Krantz described that as a courageous move. Prosecutors,
however, have characterized it as an act of extortion, not
bravery, in an effort to get salary raises.
Krantz also pointed out that DiPascali admitted under
cross-examination that he had repeatedly lied to Perez and
O'Hara about the nature of their work to ensure they would help
him perpetuate the fraud.
"If they're in on the fraud, why on earth does Frank
DiPascali have to lie over and over to get them to do his dirty
work?" Krantz said. "It makes no sense."
DiPascali, Krantz added, has lied under oath before, when he
testified before the SEC regarding the firm's purported trading
strategies. He also changed his story several times between his
first meetings with government agents and his testimony at the
trial, Krantz said.
"This is not a typical human being," Krantz said. "This is a
human being who lost a grasp of truth and falsity a long time
Closing arguments by defense lawyers are expected to last
several more days.
The case is USA v. O'Hara et al, U.S. District Court,
Southern District of New York, No. 10-cr-0228.