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2 former Madoff workers arrested in Ponzi case

Two former longtime employees at Bernard Madoff's firm were arrested Thursday in connection with the investigation into the now-imprisoned swindler's Ponzi scheme, the FBI said.
/ Source: Reuters

Two former longtime employees at Bernard Madoff's firm were arrested on Thursday in connection with the investigation into the now-imprisoned swindler's Ponzi scheme, the FBI said.

Jo Ann Crupi and Annette Bongiorno were among those considered part of the inner circle at Madoff's investment advisory firm. Crupi and Bongiorno had worked for Madoff for 25 and 40 years, respectively.

Madoff had insisted that he acted alone in carrying out the estimated $65 billion Ponzi scheme, uncovered in December 2008. Since then, at least seven other people have been arrested or pleaded guilty in connection with the case.

Crupi was arrested at her home in Westfield, New Jersey, and Bongiorno was arrested in Florida, an FBI spokesman said.

The charges are expected to be unsealed later Thursday in Manhattan federal court, the spokesman said.

Lawyers for Crupi and Bongiorno could not immediately be reached for comment. The U.S. attorney's office in New York did not immediately return a call.

Federal prosecutors earlier this year filed civil lawsuits against the women seeking the return of at least $7.4 million. They said Crupi and Bongiorno bought luxury cars and invested in property with funds from defrauded Madoff investors.

Madoff, 72, is serving a 150-year sentence at a North Carolina federal prison after pleading guilty last year. He had run Bernard L. Madoff Investment Securities LLC, a money management firm that lured investors with steady returns that turned out to be fictitious.

Others who have pleaded guilty include former chief financial officer Frank DiPascali, who is cooperating with prosecutors and under house arrest, and former accountant David Friehling.

Among those arrested are former director of operations Daniel Bonventre and former computer programmers Jerome O'Hara and George Perez.

Investigators last year were probing at least 10 people on possible criminal charges, a person familiar with the case said at the time. The government has relied heavily on DiPascali's knowledge of Madoff's business in pursuing criminal charges against other employees.

In their civil lawsuit against Bongiorno, prosecutors sought to recover $5.1 million of assets, including homes in New York and Boca Raton, Florida and a 2005 Bentley. The civil lawsuit against Crupi sought the return of $2.3 million.

Irving Picard, the court-appointed trustee overseeing the bankruptcy of Madoff's firm, has also sued Crupi and Bongiorno. He has filed dozens of lawsuits to recover money from firms and individuals he says benefited from Madoff's fraud.

Picard has said he has recovered $1.5 billion for victims through Sept. 30.