In December 2008, two of Bernard Madoff's most loyal employees met on a Manhattan street corner and fretted over a closely held secret that the rest of the world would learn about eight days later: Their boss was a con man for the ages.

Frank DiPascali told JoAnn Crupi that Madoff had just confided that his investment firm was out of money and that client accounts -- worth billions on paper -- actually had no more value than Monopoly money, authorities say.

The pair then is alleged to have cooked up a cover story that quickly collapsed under the weight of the largest Ponzi scheme in history -- one authorities say cost investors an estimated $17.3 billion.

The exchange was recounted for the first time in a newly rewritten indictment last week expanding the case and charges against five defendants headed for a trial next year.

The indictment brings into sharper focus the final few years of a fraud the government says dated to at least the early 1970s.

It portrays a private investment business in Manhattan where as many as a dozen officers grew a fraud so sophisticated that repeated probes by the Securities and Exchange Commission and queries from banks and investors could draw no blood. All the while, it says, they rewarded themselves with millions of dollars, sometimes tax-free or with taxes greatly reduced by fake losses.

Those facing a criminal trial next year are Annette Bongiorno, 64, Madoff's longtime secretary and a supervisor in his private investment business; Daniel Bonventre, 65, his director of operations for investments; Crupi, 51, who managed accounts; and two computer programmers, Jerome O'Hara, 49, and George Perez, 46. All have pleaded not guilty.

Besides Madoff, 74, who is serving a 150-year prison sentence, six others have pleaded guilty in the case, including former finance chief DiPascali.

The new account fills in information prosecutors learned as they built their case with help from several cooperators, including DiPascali.

As the government tells it, the fraud appears to have started in a measured way in the 1970s as phony documents were regularly manufactured to make it appear investor funds were being invested. Lists of bogus trades of securities were based on data gleaned from published sources of market information.

By the 1990s, according to the indictment, Madoff leaned on his back-office workers to produce and mail thousands of pages of statements to customers of his "split-strike conversion strategy," an investing technique based on a model basket of S&P 100 stocks. Prosecutors say no trades occurred.

Meanwhile, he also had hired O'Hara and Perez, who created software programs that made it easier to churn out bogus securities trades that could be used in phony statements to investors, the government said.

All the while, Madoff was telling investors they were making up to 45 percent in annual gains. The indictment said Madoff sometimes asked his workers to create bogus losses from phony trades to shield him from tax liabilities.

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