No, you haven't heard the last of the Bernard Madoff mess. While Bernie continues to grant interviews from his jail cell, prosecutors continue to grapple with pending criminal pleas and prosecutions, and civil litigants continue their search for assets and more defendants. The saga still has life in it.
According to recent government allegations and pleas, Eric S. Lipkin was employed by the investment advisory firm of Bernard L. Madoff Investment Securities LLC ("BLMIS"), from the mid-1980s until the firm's demise on December 11, 2008. The government alleges that in 1996, Lipkin and a number of co-conspirators began falsifying the books and records at BLMIS.
SIDE BAR: Among those alleged to be Lipkin's co-conspirators are:
NOTE: The charges and allegations contained in an Complaint, Information, or Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Federal prosecutors alleged that while working in concert with certain co-conspirators, Lipkin
In an alleged effort to mislead auditors, Lipkin and others are charged with creating fake reports purportedly obtained by the Depository Trust Company ("DTC") that showed the securities holdings of BLMIS IA clients. However, those holdings were fabricated and nonexistent.
In addition to allegations concerning fraud pertaining to BLMIS's investment advisory accounts, the government alleges that at the direction of other co-conspirators, including Bonventre, Lipkin knowingly created false BLMIS books and records reflecting individuals who did not actually work at the firm. These non-employees received salaries and benefits, and a number of these fake employees were falsely reported to DOL as among the firm's staff.
On June 5, 2011, Lipkin, 37, pled guilty in Manhattan federal court to a six-count Superseding Information , which charged him with:
Lipkin also agreed to cooperate with the Government in its ongoing investigation of BLMIS.
Pursuant to the Cooperation Agreement entered into with the Government, Lipkin will forfeit at least $1.4 million as well as his interest in his home and various investment accounts. The net proceeds from the sale of the forfeited property will be used to compensate victims of the fraud.
Without admitting or denying the allegations of the SEC's Complaint, on June 6, 2011, Lipkin consented to a proposed partial judgment, which, if entered by the court, will impose a permanent injunction against Lipkin and require him to disgorge ill-gotten gains and pay a fine in an amount to be determined by the court at a later time.
Note From Bill Singer: Although much has been written about the Madoff cases, sometimes the facts and nuances get lost as reporters parse through the voluminous pleadings involved in these matters. I have linked below the full-text of Lipkin's Criminal Information and Cooperation Agreement, and the SEC Complaint. They provide quite a bit of depth and context, and I commend their reading to those of you truly interested in understanding the issues of this case: