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Defense says Madoff workers followed orders

Bernard Madoff, center, walks out from federal court

Bernard Madoff, center, walks out from federal court after a bail hearing in Manhattan. Five of his former employees are on trial in November 2013 for aiding his fraud which stole billions from investors. Credit: Getty Images, 2009

Federal prosecutors "drank the Kool-Aid" when they relied on the cooperation of a key aide to swindler Bernard Madoff to make a federal fraud case against five former employees of the investment company currently on trial, a defense attorney said Monday.

In his closing argument to the jury, attorney Gordon Mehler, who is defending computer programmer Jerome O'Hara, likened the prosecution to a train that could only be derailed by the jury.

Mehler said that Frank DiPascali, who admitted playing a major role in Madoff's Ponzi scheme, which led to investor losses of about $17 billion, was a man desperate to make a deal with prosecutors to save his own skin. DiPascali was a key government witness in the current trial.

Mehler is expected to finish his summation Tuesday morning.

O'Hara, of Malverne, and four other former Madoff employees have been on trial in federal court in Manhattan for five months, facing charges that they helped engineer the massive Madoff conspiracy at Bernard L. Madoff Securities.

The indictment said they helped defraud investors by falsifying books and other records, misleading regulators, as well as other crimes. The giant scam, the largest in Wall Street's history, finally unraveled in December 2008 when Madoff admitted to his family that he had been running a Ponzi scheme for years. He pleaded guilty to securities fraud and is serving a 150-year sentence in federal prison.

Among the key elements of the defense cases are the individual defendants, some of whom worked in part for Madoff's legitimate securities trading business and according to their lawyers, weren't aware that he was running a Ponzi scheme. They were only following orders when they produced account statements for investors that were bogus, lawyers said.

Mehler's summation is expected to be followed Tuesday morning by Roland C. Riopelle, who is representing Madoff's ex-secretary Annette Bongiorno of Manhasset. The afternoon summations are scheduled to include that of Andrew Frisch, who is defending Daniel Bonventre of Manhattan.

Federal prosecutors will get a chance to offer a rebuttal summation after the defense is finished. The defendants face prison time and forfeiture of their assets if convicted.

Manhattan federal Judge Laura Taylor Swain said she hoped to get the case to the jury on Friday.

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