Madoff ex-deputy testifies about Ponzi 'exit strategy' talk
As his Ponzi scheme collapsed, Bernie Madoff spent his time scrambling for money, gazing out of his 19th-floor office and preparing an elaborate script for his own demise, a onetime deputy said Tuesday in riveting testimony about the fraudster's final days.
Appearing at the trial of five former aides on the eve of the fifth anniversary of Madoff's Dec. 11, 2008, arrest, longtime top assistant Frank DiPascali said Madoff had been "staring out the window" when he called him into his office days after Thanksgiving and began crying.
"He said, 'Frank, I'm at the end of my rope. I don't have any more money,' " testified DiPascali, whose inability to process the news led an infuriated Madoff to raise his voice. "The whole -- thing is a fraud! Don't you understand?"
DiPascali told the federal court jury in Manhattan that Madoff's desk was strewn with notepads filled with "dates and numbers and people," calculating how long his money would last, and laying out a timeline for when to see a lawyer and turn himself in.
"One of the last things I want is to go out of this office in handcuffs in front of all the employees," Madoff said, according to DiPascali. "I want to do this on my own terms." Madoff eventually turned himself in at his apartment.
The five ex-aides -- including account manager Annette Bongiorno, 65, of Manhasset, and computer programmer Jerry O'Hara, 50, of Malverne -- are accused of helping Madoff fool investors and regulators for three decades. The trial began in October.
DiPascali, 57, the government's star witness, pleaded guilty in 2009. During five days on the stand, he has implicated each defendant in producing phony account statements and financial reports. The defendants claim they were duped by Madoff.
In Tuesday's testimony, DiPascali said he knew he was committing crimes at Madoff's side for years, but always believed Madoff had enough money secreted somewhere to pay investors, even as redemption requests mounted in a 2008 market panic.
But as various schemes for raising new money from wealthy investors fell through Madoff became "erratic," and by the time of the closed-door meeting just after Thanksgiving he was "somewhat delirious."
"There were a lot of topics popping in and out that were not cohesive at all," DiPascali testified.
One subject that kept coming up was the future of Madoff's family, DiPascali said. Madoff said that his wife Ruth would be fine because she had $35 million in inherited money and real estate in her name. He was dismissive about his brother and business partner, Peter.
"My damn brother is going to get disbarred," Madoff told DiPascali, "but I don't care about that."
In other testimony Tuesday, DiPascali described negotiations to buy silence from Madoff's two computer experts -- O'Hara and George Perez, 47, of East Brunswick, N.J. -- when they said in 2006 they wanted to stop writing programs to cook the books.
They wanted a reward but not a payoff that would "jump off the page" and get them in trouble, DiPascali testified.
Before a "substantial" raise was negotiated, he said, O'Hara suggested some off-the-books diamonds.
"Are you crazy?" DiPascali said that he answered. "Where am I going to get a bag of diamonds?" Shortly after that episode, he said, another defendant, the New York office's director of operations, Daniel Bonventre, asked over dinner about DiPascali's plan if everything fell apart.
"He explained what his exit strategy was going to be -- that he was always told these trades were happening in Europe, and that he was always told, 'Mind your own business," DiPascali testified.
"I don't have an exit strategy," DiPascali said he responded. "I am knee-deep in this pile and I can't claim I didn't know what was going on."