Bernard Madoff

[silverwhisper]

trysail quoth:
the SEC is, was, and always will be a bunch of bureaucratic lawyers and brain-dead zombies...[snip]...the SEC is a bureaucracy. they can't analyze their way out of a paper bag and they move at the pace of a garden slug. this has nothing to do with politics; it's the nature of bureaucracy, a highly legalistic environment and the fact that "a bureaucrat has no upside."

that's a pretty simplistic reduction, trysail.

madoff was a former chair of nasdaq. if the SEC was going to take a shot at him, they really had to have all their ducks in a row, and apparently, the same care that he exercised in fooling fairly sophisticated investors for decades was enough to fool the SEC investigators just enough.

ed

 

[Pure]

wonderful interview, jon stewart, re madoff

http://www.huffingtonpost.com/2009/06/30/150-years-of-solitude-dai_n_222900.html

 

[Byron In Exile]

http://www.huffingtonpost.com/2009/06/30/150-years-of-solitude-dai_n_222900.html

"Bundled handjob derivatives..."! Lol...

 

[trysail]

that's a pretty simplistic reduction, trysail.

madoff was a former chair of nasdaq. if the SEC was going to take a shot at him, they really had to have all their ducks in a row, and apparently, the same care that he exercised in fooling fairly sophisticated investors for decades was enough to fool the SEC investigators just enough.

ed

I take issue with your characterization of these folk as "fairly sophisticated investors." They weren't. Most of them were salespeople or dolts or buffoons— but I repeat myself. All of them were pursuing fantasy.

Regretfully, I pursued a career in mathematics— and INTENTIONALLY avoided one in sales.

Wall Street is a gigantic promotion machine. In contrast, the practice of investing is 90% math ( not that Wall Street or the financial media will ever teach, confess or admit it ).

As far as I'm concerned— based on my experience, anyone who was ever connected with NASDAQ is suspect right from the git-go. It has always been the denizen of low lifes— but patsies, lawyers and government bureaucrats don't know that.


"Maybe they should license investors."

 

[silverwhisper]

trysail quoth:
i take issue with your characterization of these folk as "fairly sophisticated investors." they weren't. nost of them were salespeople or dolts or buffoons.

you can take issue with it all you want, but the fact remains that we're talking about a lot of high net-worth individuals, too, some of whom actually are fairly sophisticated investors. and they were fooled, too.

trysail quoth:
based on my experience, anyone who was ever connected with NASDAQ is suspect right from the git-go. it has always been the denizen of low lifes- but patsies, lawyers and government bureaucrats don't know that.

i don't know you. therefore, i don't know what your experience consists of. all i know is that you talk big about it. how about you step up to the table and share?

b/c i've talked with dozens of people at dozens of stock exchanges, in the US and otherwise. IMX, those folks are sharp and dedicated professionals, without exception. and i'm not talking just officers here, either.

so what do you stack up against that, trysail?

ed

 

[trysail]

you can take issue with it all you want, but the fact remains that we're talking about a lot of high net-worth individuals, too, some of whom actually are fairly sophisticated investors. and they were fooled, too.


i don't know you. therefore, i don't know what your experience consists of. all i know is that you talk big about it. how about you step up to the table and share?

b/c i've talked with dozens of people at dozens of stock exchanges, in the US and otherwise. IMX, those folks are sharp and dedicated professionals, without exception. and i'm not talking just officers here, either.

so what do you stack up against that, trysail?

ed

After the academy, I was apprenticed to— and served under— the very best. Thirty years later ...

I have yet to see the name of a Madoff investor I consider an informed and "intelligent investor." There are clearly some celebrities ( but what do they know? ) There are some institutions ( but institutions can [ and frequently do ] behave as stupidly as the rubes ).

The common theme among all the Madoff investor names I've seen thus far is that none of them had the foggiest idea in hell what they were investing in.

There's been a lot of that, lately— including the endowments of Yale, Harvard and UVa— among others.

http://forum.literotica.com/showpost.php?p=28904336&postcount=63



History:

http://farm4.static.flickr.com/3106/3195243628_4926ebc5ab_o.jpg

 

[Boxlicker101]

http://www.npr.org/templates/story/s...ryId=104104561
Suits Filed Against Those Who Profited From Madoff

All Things Considered, May 13, 2009 · The court-appointed trustee looking into disgraced financier Bernard Madoff's operations is suing investors who made large profits in the Ponzi scheme, hoping to get some of the money into the hands of investors who were fleeced.

The trustee, Irving Picard, is targeting investors who made withdrawals from the Madoff firm in the months and years before it collapsed.

"The allegations are that these entities knew or should have known there was a fraud going on. So all the money that they withdrew — the billions of dollars that they withdrew — should come back," says Amir Efrati, who is covering the story for The Wall Street Journal.

Efrati tells Robert Siegel, however, that it might be a problem to collect because much of the money may have already been distributed to other investors who took the money in good faith.

The entities that are being sued say they, too, were victims of Madoff's scheme. Picard counters that though they lost a lot of money, they also made billions.

"These suits were filed against very sophisticated individuals who should have known a lot about the market," Efrati says, "and according to bankruptcy laws, if you didn't notice these red flags or act on these red flags that were in front of your face ... then you might have to give away some of the money that you withdrew."...

This doesn't make much sense. They are saying the investors who took out profits should have known they were bogus. If that's the case, everybody should have known the same thing.

The bolded part seems to contradict itself in ther same sentence.

 

[silverwhisper]

trysail quoth:
after the academy, i was apprenticed to— and served under— the very best. thirty years later ...

yes, that sounds very grand. what does it actually mean? did you ever work for a financial services company, or does this bit of nebulous, grand-sounding summarization mean you really don't have professional experience in this? i'm guessing the latter.

trysail quoth:
i have yet to see the name of a madoff investor i consider an informed and "intelligent investor." there are clearly some celebrities ( but what do they know? ) there are some institutions ( but institutions can [ and frequently do ] behave as stupidly as the rubes ).

the common theme among all the madoff investor names i've seen thus far is that none of them had the foggiest idea in hell what they were investing in.

that's obviously because you didn't read the link i provided earlier and you clearly haven't paid much attention to the matter. henry kaufman was a managing director and economist for salomon brothers, and probably has more understanding of equity markets in his little toe than you and me put together, mort zuckerman built a multi-billion dollar real estate empire, and larry silverstein, real estate developer and owner of the WTC property, among others. none of these guys are exactly casual investors: they're all highly-successful business people.

you're just plain wrong, trysail.

ed

 

[trysail]

yes, that sounds very grand. what does it actually mean? did you ever work for a financial services company, or does this bit of nebulous, grand-sounding summarization mean you really don't have professional experience in this? i'm guessing the latter.

Well, that would mean that you guessed wrong.

that's obviously because you didn't read the link i provided earlier and you clearly haven't paid much attention to the matter. henry kaufman was a managing director and economist for salomon brothers, and probably has more understanding of equity markets in his little toe than you and me put together, mort zuckerman built a multi-billion dollar real estate empire, and larry silverstein, real estate developer and owner of the WTC property, among others. none of these guys are exactly casual investors: they're all highly-successful business people.

you're just plain wrong, trysail.

ed

Some of the dumbest [ and most dishonest ] people I ever knew or met worked for Solly. You could ask Michael Lewis.

You fail to mention HOW MUCH any of these folk put at risk. Kaufman, Silverstein and Zuckerman are busy doing other things ( like real estate in the case of Silverstein and Zuckerman ). Henry is not the sharpest knife in the drawer. On the basis of a passing acquaintanceship, they threw some pocket change in the Madoff bucket— but NOT a material portion of their net worth.

 

[R. Richard]

Bankruptcy laws are complex.

If a Madoff investor took out $5,000 per month, for living expenses, over many years, the money is probably not recoverable, possibly including the money taken out the month Madoff went belly up. The long term nature of the withdrawals would make it effectively impossible to prove that the individual had any suspicion that the Madoff operation was a fraud.

If an individual with a securities license is involved in any material way in the Madoff operation, he/she/it is likely to have to come up with some serious money.

If an indvidual, who had no history of withdrawals, took out, let's say, $10 million in the months just before Madoff went belly up, the most likely outcome will be that the individual will have to disgorge the profit.

 

[voluptuary_manque]

I just hope he lives long enough to fully appreciate life in a cage.`

 

[trysail]

I just hope he lives long enough to fully appreciate life in a cage.`

Madoff Faces Harsher Imprisonment Than Corporate Predecessors

June 30 (Bloomberg) -- Bernard Madoff, sentenced to a prison term six times longer than those given the chief executives of WorldCom Inc. and Enron Corp., will likely serve his time in a harsher prison than those white-collar inmates.

Sentenced to 150 years, Madoff will probably be sent to a medium- or high-security prison, probably in the northeastern U.S, according to lawyers and prison consultants. Even worse for Madoff, fellow inmates serving life sentences may want “to make a name for themselves” by harming the ex-money manager, a former inmate said. The Federal Bureau of Prisons, which will decide where he’s jailed, may isolate Madoff to protect him from other prisoners.

]“If they see an opportunity to take that man out and be in the paper and make a name for themselves, what do they have to lose,” Steve Vincent, a former police officer jailed for theft who now runs Federal Prison Consultant Services in Louisville, Kentucky, said in an interview. “Wherever he goes, they’re going to put him in solitary.”


MORE: http://www.bloomberg.com/apps/news?pid=20601170&sid=apzmc9N7mJkA

 

[Boxlicker101]

Madoff Faces Harsher Imprisonment Than Corporate Predecessors

June 30 (Bloomberg) -- Bernard Madoff, sentenced to a prison term six times longer than those given the chief executives of WorldCom Inc. and Enron Corp., will likely serve his time in a harsher prison than those white-collar inmates.

Sentenced to 150 years, Madoff will probably be sent to a medium- or high-security prison, probably in the northeastern U.S, according to lawyers and prison consultants. Even worse for Madoff, fellow inmates serving life sentences may want “to make a name for themselves” by harming the ex-money manager, a former inmate said. The Federal Bureau of Prisons, which will decide where he’s jailed, may isolate Madoff to protect him from other prisoners.

]“If they see an opportunity to take that man out and be in the paper and make a name for themselves, what do they have to lose,” Steve Vincent, a former police officer jailed for theft who now runs Federal Prison Consultant Services in Louisville, Kentucky, said in an interview. “Wherever he goes, they’re going to put him in solitary.”


MORE: http://www.bloomberg.com/apps/news?pid=20601170&sid=apzmc9N7mJkA

I think the length of his sentence is moot. He certainly isn't going to live another 150 years.

I don't mean that somebody will kill him, although that is possible too. If anybody does, that will be a federal offense and he will face a possible death penalty.

ETA: The length of his sentence doesn't bother me at all. I just hope he doesn't do it in some resort type place such as white collar criminals often do.

 

[SlickTony]

150 years in the razor wire Hilton is a joke for that old coot. He should have to work in a Wal-Mart stocking shelves until he croaks

There are a lot of people, Madoff included, for whom having to eat a lot of Ramen, having to buy reconditioned tires one at a time, and paying half the lights in order to pay all the rent, might be a salutary experience.

 

[JackLuis]

I'll bet Bernie becomes a teacher in the can.

What crook ever almost got away with the money he did?

There will be a lot of people who will want to talk to Bernie. He is after all a social person and scamed a lot of people. To see him as treasurer of the mob in five years even in Leavenworth, wouldn't surprise me.

 

[Boxlicker101]

I'll bet Bernie becomes a teacher in the can.

What crook ever almost got away with the money he did?

There will be a lot of people who will want to talk to Bernie. He is after all a social person and scamed a lot of people. To see him as treasurer of the mob in five years even in Leavenworth, wouldn't surprise me.

It would surprise me a lot. He is doing his time in New York.

http://en.wikipedia.org/wiki/Bernard_Madoff#Sentencing_and_prison_life

The name of that facility sounds suspiciously like some kind of Club Fed. I think I will look it up further.

I would much rasther he went to Leavenworth or some place like that.

 

[silverwhisper]

trysail quoth:
well, that would mean that you guessed wrong.

so you're saying you've spent 3 decades in financial services?

trysail quoth:
some of the dumbest [ and most dishonest ] people i ever knew or met worked for solly.

oddly enough, i've noticed that personal anecdotes are of dubious value in online discussions.

trysail quoth:
you fail to mention how much any of these folk put at risk.

i don't need to. your original statement was a simple and unqualified one, which means a valid counter example is enough to invalidate your assertion, as i have done.

ed

 

[R. Richard]

It would surprise me a lot. He is doing his time in New York.

http://en.wikipedia.org/wiki/Bernard_Madoff#Sentencing_and_prison_life

The name of that facility sounds suspiciously like some kind of Club Fed. I think I will look it up further.

The place quoted in the article is a 'holding cell' only. Madoff is to be sentenced to a federal prison. It won't be 'Club Fed,' but it also won't be Pelican Bay. Chances are that Madoff will be held in solitary, as the chance for a life sentence inmate to make a name for himself by killing Madoff would be too great.

 

[trysail]

The common theme among all the Madoff investors is that none of them had the foggiest idea in hell what they were investing in. That, of course, was the case with 99% of the people [ and institutions ] who invested in all sorts of exotic garbage over the last decade.

Investors threw money at stuff they couldn't value and didn't understand from "high tech" IPOs to CDOs to hedge funds. They did it for the dumbest of reasons— they extrapolated future returns from prior returns ( many of which were "cherry picked" if not— as in the case of Madoff— outright fabrications ).

 

[trysail]

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/01/AR2009070104223.html

"...At least five times over nearly 20 years, the SEC has investigated Madoff's business, but it never discovered the tremendous fraud..."

Harry Markopolos did everything short of leaving a trail of bread crumbs. He was ignored. The SEC simply didn't investigate thoroughly— it can't— in order to properly supervise, regulate and police the investment field, you'd need one trained and experienced investor for each and every salesperson/snake-oil purveyor.

The SEC is, was, and always will be a bunch of bureaucratic lawyers and brain-dead zombies. There are folk who will want to and attempt to politicize this. That's a mistake. The SEC is a bureaucracy. They can't analyze their way out of a paper bag and they move at the pace of a garden slug. This has nothing to do with politics; it's the nature of bureaucracy, a highly legalistic environment and the fact that "a bureaucrat has no upside."

In the end, people HAVE to protect themselves. If you think the SEC or god or your idiot stockbroker son-in-law is going to save you from yourself, you're smoking something.
"If it's too good to be true..."

Anybody who put all their eggs ( or a substantial portion of their eggs ) in a basket like this one was probably going to lose all their money eventually in one way or another. There were lots and lots of red flags and warning signs.

 

[R. Richard]

If you wonder why the SEC didn't investigate Madoff, read the red below. Comment?

SEC lawyer raised alarm about Madoff

Thu Jul 2, 1:48 am ET
WASHINGTON (Reuters) – A U.S. Securities and Exchange Commission lawyer warned about irregularities at Bernard Madoff's financial management firm as far back as 2004, The Washington Post reported on Thursday, citing agency documents and sources familiar with the investigation.

Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, sent emails to a supervisor saying information provided by Madoff during her review didn't add up and suggesting a set of questions to ask his firm, the report said.

Several of the questions directly challenged Madoff activities that turned out to be elements of his massive fraud, the newspaper said.

Madoff, 71, was sentenced to a prison term of 150 years on Monday after he pleaded guilty in March to a decades-long fraud that U.S. prosecutors said drew in as much as $65 billion.

The Washington Post reported that when Walker-Lightfoot reviewed the paper documents and electronic data supplied to the SEC by Madoff, she found it full of inconsistencies, according to documents, a former SEC official and another person knowledgeable about the 2004 investigation.

The newspaper said the SEC staffer raised concerns about Madoff but, at the time, the SEC was under pressure to look for wrongdoing in the mutual fund industry. Walker-Lightfoot was told to focus on a separate probe into mutual funds, the report said.

One of Walker-Lightfoot's supervisors on the case was Eric Swanson, an assistant director of her department, the Post reported, citing two people familiar with the investigation.

Swanson later married Madoff's niece, and their relationship is now under review by the SEC inspector general, who is examining the agency's handling of the Madoff case, the Post reported.

Swanson, no longer with the agency, declined to comment, the Post said.

SEC spokesman John Nester also declined to comment, citing the ongoing investigation by the agency's inspector general, the newspaper said.

 

[HoHoBomb]

Does it occur to anybody else that his name is highly appropriate? After all, Bernie made off with a lot of money.

Mad Off
Made off

 

[trysail]

( Fair Use Excerpt )

Aug. 11 (Bloomberg) -- Frank DiPascali, the finance chief at Bernard Madoff’s investment advisory business, pleaded guilty to helping his boss carry out a $65 billion Ponzi scheme and is helping prosecutors build cases against his accomplices.

DiPascali, 52, pleaded guilty in federal court in Manhattan to 10 counts, including conspiracy, fraud and money laundering. DiPascali has been explaining to prosecutors how Madoff spent two decades committing fraud using money from new clients to pay earlier investors at Bernard L. Madoff Investment Securities LLC.

“I knew I was participating in a fraudulent scheme,” DiPascali told U.S. District Judge Richard Sullivan. “I knew everything I did was wrong, and it was criminal, and I did it knowingly and willfully. I accept complete responsibility for what I did. I apologize to every victim and to my family and the government. I am very, very, very sorry.”

Sullivan denied a $2.5 million bail request and ordered DiPascali to jail immediately. DiPascali was led from the courtroom in handcuffs when the two-hour hearing ended. The judge said he may reconsider DiPascali’s bail request.

Madoff, 71, is serving a 150-year prison term after pleading guilty in March. DiPascali, who faces 125 years, is hoping his cooperation will bring him leniency at sentencing, ...

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLxz11rCieE4

In today's reporting of DiPascali's plea, it emerged that Bernie Madoff was not registered with the Securities and Exchange Commission as a Registered Investment Adviser ( "RIA").

That means— from a strictly legal point of view— that Madoff had no fiduciary obligation to his clients. He was a stockbroker ( for our English friends- a stock jobber ).

Because Madoff was a stockbroker, Madoff customer accounts did not have to be housed at a separate custodian ( who, very importantly, would produce monthly or quarterly itemized statements of the assets ). Quite obviously, Madoff never would have been able to pull off the scam if a third party was producing statements that disagreed with those produced by Madoff.

In addition, the fact that Madoff was not a Registered Investment Adviser means that he was not subject to the extra level of scrutiny that the SEC applies to RIAs.

Harry Marcopolis did everything short of leaving a trail of bread crumbs. He was ignored. The SEC didn't give Madoff a "thumb's up;" it simply didn't investigate thoroughly. The SEC is, was, and always will be a bunch of bureaucratic lawyers and brain-dead zombies. There are folk who will want to and attempt to politicize this. That's a mistake. The SEC is a bureaucracy. They can't analyze their way out of a paper bag and they move at the pace of a garden slug. This has nothing to do with politics; it's the nature of bureaucracy, a highly legalistic environment and the fact that "a bureaucrat has no upside."

In the end, people HAVE to protect themselves. If you think the SEC or god or your idiot stockbroker son-in-law is going to save you from yourself, you're smoking something.
"If it's too good to be true..."

Anybody who put all their eggs ( or a substantial portion of their eggs ) in a basket like this one was probably going to lose all their money eventually in one way or another. There were lots and lots of red flags and warning signs.

 

[Boxlicker101]

Quote:
( Fair Use Excerpt )

Aug. 11 (Bloomberg) -- Frank DiPascali, the finance chief at Bernard Madoff’s investment advisory business, pleaded guilty to helping his boss carry out a $65 billion Ponzi scheme and is helping prosecutors build cases against his accomplices.

DiPascali, 52, pleaded guilty in federal court in Manhattan to 10 counts, including conspiracy, fraud and money laundering. DiPascali has been explaining to prosecutors how Madoff spent two decades committing fraud using money from new clients to pay earlier investors at Bernard L. Madoff Investment Securities LLC.

“I knew I was participating in a fraudulent scheme,” DiPascali told U.S. District Judge Richard Sullivan. “I knew everything I did was wrong, and it was criminal, and I did it knowingly and willfully. I accept complete responsibility for what I did. I apologize to every victim and to my family and the government. I am very, very, very sorry.”

Sullivan denied a $2.5 million bail request and ordered DiPascali to jail immediately. DiPascali was led from the courtroom in handcuffs when the two-hour hearing ended. The judge said he may reconsider DiPascali’s bail request.

Madoff, 71, is serving a 150-year prison term after pleading guilty in March. DiPascali, who faces 125 years, is hoping his cooperation will bring him leniency at sentencing, ...

Does it occur to anybody that the bolded part sounds very much like the way Social Security works?

 

[trysail]

I have yet to see the name of a Madoff investor I consider an informed and "intelligent investor." There are clearly some celebrities ( but what do they know? ) There are some institutions ( but institutions can [ and frequently do ] behave as stupidly as the rubes ).

The common theme among all the Madoff investor names I've seen thus far is that none of them had the foggiest idea in hell what they were investing in.

that's obviously because you didn't read the link i provided earlier and you clearly haven't paid much attention to the matter. henry kaufman was a managing director and economist for salomon brothers... mort zuckerman built a multi-billion dollar real estate empire, and larry silverstein, real estate developer and owner of the WTC property, among others. none of these guys are exactly casual investors: they're all highly-successful business people.

you're just plain wrong, trysail.

ed

I've explained this before; now comes the confirmation. Madoff was intentionally and purposely excluding people who were likely to smell a rat. See the highlighted section below.


http://www.bloomberg.com/apps/news?pid=20601110&sid=alsaRupBZoMU

Aug. 12 (Bloomberg) -- Bernard Madoff used a random-number generator, old stationery, a “phantom” trading platform and an aging computer to hide for decades the world’s biggest Ponzi scheme, U.S. regulators said in claims against the person they called his “key lieutenant,” Frank DiPascali.

An uncontested lawsuit filed yesterday against DiPascali includes the Securities and Exchange Commission’s most detailed account yet of how Madoff, 71, concealed a fraud leading to more than $64 billion in investor losses. DiPascali, 52, and employees at Madoff’s firm spent “significant time and effort” preparing for inquiries from authorities or investors, the complaint says, without identifying any conspirators.

“DiPascali and Madoff ran an extraordinary and massive counterfeiting operation that concealed their fraud from investors and regulators,” the SEC’s enforcement chief, Robert Khuzami, said in a statement.

The SEC is taking heat from lawmakers and investors over its failure to catch the fraud after years of warnings. The agency is overhauling its enforcement unit and how it screens tips while awaiting release of Inspector General David Kotz’s internal examination of the handling of Madoff’s New York firm before his scheme collapsed in December.

“It certainly does help the SEC’s case in the public eye to indicate the degree of fairly sophisticated subterfuge, and show that they weren’t just a bunch of bumblers,” said James Cox, a securities law professor at Duke University in Durham, North Carolina.

Madoff Report Awaited
Lawmakers including Paul Kanjorski, a Pennsylvania Democrat, have sought Kotz’s report as soon as possible as they overhaul financial regulation. The report, scheduled to be published this month, may provide the “definitive” explanation of the SEC’s handling of Madoff, Cox said.

DiPascali, who didn’t complete college, joined Bernard L. Madoff Investment Securities LLC as a 19-year-old research clerk in 1975 and later won promotions. His stature grew in the 1980s while overseeing the “build-out” of the midtown Manhattan office in the Lipstick Building on Third Avenue, the SEC said.

DiPascali “oversaw the mechanics of an entirely fictitious investment strategy,” the SEC wrote in its complaint filed at federal court in Manhattan. He “helped Madoff structure and record non-existent trades that were reflected on millions of pages of customer confirmations and account statements.” He “played a critical role in helping Madoff avoid detection.”

IBM Computer
Under DiPascali’s supervision, Madoff’s programmers organized accounts on a single IBM AS/400 computer, which would automatically allocate fictitious trades to individual accounts, the SEC said. DiPascali had his staff check trades to make sure the reported prices weren’t too high or low for the day.

To keep regulators at bay, he helped create a random-number generator to make it look like trades of various sizes and prices were being carried out in different time zones.

DiPascali, a resident of Bridgewater, New Jersey, also helped build a “phantom” computer trading platform in case an investor, auditor or regulator requested to see the firm’s trading in action.

In the event of a surprise visit, one employee was supposed to enter fake trades on a computer screen while another hid in a nearby office playing the role of a counterparty from a linked computer. They tested the system, the SEC said, without specifying whether it was used. To avoid detection, Madoff closed accounts of investors who worked at sophisticated financial institutions.

Stationery, Letterhead
Madoff kept old stationery and letterhead for his firm in case he needed to fabricate records for prior years, the SEC said. DiPascali also spent “substantial time and effort” mimicking the layout, font and paper used in official reports so he could document his trades, it said.

“It was all fake. It was all fictitious,” DiPascali said yesterday in federal court. “I knew everything I did was wrong, and it was criminal, and I did it knowingly and willfully.”

In the scheme’s final days, DiPascali made a list of family, friends and employees to get the remaining money, the SEC said. Madoff was arrested Dec. 11 and the funds, more than $150 million, were seized before they could be distributed.

Madoff is serving a 150-year prison term after pleading guilty to running the Ponzi scheme. He didn’t identify accomplices and has provided little help to the receiver seeking the assets of his firm.

By 2002, DiPascali opened an account for himself at the firm, naming it after his fishing yacht, Dorothy Jo. Though he never deposited money, he withdrew more than $5 million from 2002 to 2008 to cover personal expenses including a new boat, the SEC said. He took more than $2 million in salary and bonus each year from the fund, it said.

Guilty Plea
DiPascali, who yesterday pleaded guilty in federal court in Manhattan to 10 criminal charges, including conspiracy, fraud and money laundering, faces up to 125 years in prison. He also settled a civil lawsuit with SEC yesterday. Civil penalties in that case may be set later.

The Madoff case is U.S. v. Madoff, 09-cr-213, U.S. District Court, Southern District of New York (Manhattan).