Irwin Lipkin, the one-time controller of the company Bernard Madoff used to carry out his multibillion-dollar Ponzi scheme, pleaded guilty to conspiracy to commit securities fraud and falsifying records in federal court in Manhattan Thursday.
Lipkin, 74 and a wheelchair user, said he was the first employee of Bernard L. Madoff Investment Securities in 1964 and altered records regularly at Madoff's instruction until his retirement in 1998, but never knew the business was a Ponzi scheme.
"My belief in Bernie Madoff's trading skills was such that I encouraged my own family to invest," Lipkin told U.S. District Judge Laura Taylor Swain. "In fact, my wife, my sons and my grandchildren invested and lost virtually all of their money."
In his plea, he said that he manipulated financial records to allow Madoff to report desired profit-and-loss numbers to customers and regulators. He also admitted that he and his wife were carried as no-show employees to collect health and retirement benefits, and that he used sham securities trades to cheat on his taxes.
Lipkin, of Paramus, N.J., also admitted the records he manipulated enabled Madoff's scheme, and he apologized to victims.
"These filings helped Mr. Madoff run the Ponzi scheme that harmed thousands of people," he said. "I am truly sorry that I contributed in any way to the massive harm done to so many innocent victims."
Lipkin faces up to 10 years in prison, and also agreed to forfeit up to $170 billion -- prosecutors' estimate of the full scope of the Madoff fraud. He was released on a $1.5-million bail bond pending sentencing March 22.