Federal agents Thursday morning arrested two longtime employees of Bernard Madoff, on charges of knowingly participating in his scheme and pocketing millions from it.

According to a grand jury indictment, Annette Bongiorno, 62 - who has houses in Manhasset and Boca Raton, Fla., and who worked for Madoff from 1968 to 2008 - was a supervisor who managed hundreds of accounts that purportedly were worth $8.5 billion as of Nov. 30, 2008.

She was picked up in Boca Raton.

Joann Crupi of Westfield, N.J., 49, who worked for Madoff for 25 years, managed accounts purportedly worth $900 million.

Manhattan U.S. Attorney Preet Bharara said, "year after year, Annette Bongiorno and Joann Crupi protected and perpetuated the Madoff mirage, while putting very real money in their own pockets."

Madoff, who paid off investors with funds stolen from other investors and was sentenced to 150 years in prison, had Bongiorno and others recreate client statements to reflect profitable trades. Bongiorno made up and altered documents to reflect trades that never took place, according to court documents.

In her own company accounts, she deposited $920,000 but withdrew more than $14 million between 1975 and 2008, federal officials said.

Bongiorno and Crupi were each charged with conspiracy, securities fraud and falsifying books and records of a broker-dealer, falsifying books and records of an investment adviser, and tax evasion. If convicted, Bongiorno faces a maximum of 75 years in prison. Crupi faces a maximum of 65 years.

advertisement | advertise on newsday

Maurice H. Sercarz, a Manhattan attorney representing Bongiorno, said, "Now that the government has formally charged my client, we look forward to demonstrating that Annette is not guilty of these allegations."

Bongiorno appeared in court in West Palm Beach, Fla. A bail hearing was scheduled for Monday. Bongiorno will spend at least the weekend in jail. She was asked by U.S. Magistrate Ann Vitunac if she understood the charges. "I understand most of it," she replied. "I don't understand all of it."

At a brief court appearance in Manhattan, a judge set bail for Crupi at $5 million. She was expected to be released sometime Friday With AP