The trustee in the Bernard Madoff case has filed lawsuits totaling more than $70 million against some of Madoff's former employees.
In lengthy complaints filed in Manhattan federal bankruptcy court on Friday, trustee Irving Picard accused the former Madoff aides of receiving tens of millions of dollars in salaries, bonuses and other payments while they knew or should have known that Madoff was running a giant investment fraud.
In some cases Picard accused the aides of falsifying company books and trading records as part of the scheme that investigators believe ripped off $20 billion from investors.
Picard also disclosed that he believes the fraud, for which Madoff was sentenced to 150 years in prison, began as far back as the 1970s.
Named in the five complaints filed Friday were two Manhasset residents, Madoff back-office employee Annette Bongiorno and trader David Kugel. Picard also sued Madoff's ex-controller, Enrica Cotellessa-Pitz, of Ozone Park, and David Bonventre, the head of operations for Madoff's company.
Another employee, Joanne Crupi of New Jersey, also received a complaint.
Picard has said he intends to file several lawsuits beginning this week to get back hundreds of millions of dollars he believes was wrongfully paid out by Madoff.
The suits will be aimed primarily at investors who allegedly received from Madoff more than they originally invested, Picard has said. The trustee deems those customers to be "net winners" and his assertion is they received cash stolen from later investors in the scheme. The lawsuits must be filed by Dec. 10, the two-year anniversary of the crash of Madoff's company.
Court records show that Picard is suing the ex-employees not only to get back what they reaped from their investment accounts, but for the return of salaries and other compensation. Picard said in earlier court filings that he reserved the right to not only go after net profits but also the principal amounts for investors who knew or should have known of the Ponzi scheme.
"The allegation that Dan Bonventre knew about the Ponzi scheme is absolute fiction and is unprovable," defense attorney Andrew Frisch said Saturday. Bonventre was indicted in February in connection with the Madoff fraud.
Bongiorno's attorney, Maurice Sercarz, didn't return an e-mail or a telephone call for comment. Cotellessa-Pitz and Kugel didn't return telephone calls and their attorneys weren't identified in court records. Crupi couldn't be reached for comment.