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Former Madoff employee Eric Lipkin sentenced to 9 months of home detention

Bernard Madoff aide Eric Lipkin Wednesday became the second ex-employee of the fraudster to avoid prison because he cooperated with the government, but he was ordered to serve 9 months of home detention.

U.S. District Judge Laura Taylor Swain said that Lipkin, the son of a former Madoff controller and an assistant to top Madoff lieutenant Frank DiPascali, did not know it was a Ponzi scheme, but knowingly created phony records that aided the massive fraud.

"His crimes shattered dreams and changed lives forever," said the judge, who also ordered Lipkin to perform 200 hours of community service and imposed a $30.6 billion forfeiture order that theoretically Lipkin is responsible for along with others who have been convicted.

Lipkin, 41, of Ridgewood, New Jersey, pleaded guilty in 2011 to six charges including conspiracy, falsifying records and bank fraud. He began working for Madoff, under the tutelage of his father, Irwin, right out of high school and faced up to 70 years in prison.

In his statement to the judge, Lipkin expressed remorse. Lipkin said he had cooperated with prosecutors and was working with a bankruptcy trustee to try to recover as much money as possible for victims so that he could model proper behavior for his three daughters.

"I apologize again to everyone I hurt, but I want to say that I will continue to do everything I can to make this right," he said.

On Tuesday, Swain sentenced former Madoff controller Enrica Cotellessa-Pitz, who also cooperated with authorities and who testified in 2013 at the trial of five Madoff aides, to probation without home detention.

She said that Lipkin, in addition to helping create false records that Madoff used to hide his fraud from auditors and regulators, had created a false Madoff account statement for himself to fraudulently obtain a bank loan. Swain said that even after the firm's collapse he used money derived from Madoff to pay off personal debts.

"Mr. Lipkin not only followed instructions, but he also used these methods for his own personal benefit," the judge said.

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