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February 20, 2010

DOJ suggests "extraordinary" leniency justified for Bernie Madoff's lieutenant

As detailed in this New York Times article, federal prosecutors "expect to recommend 'extraordinary' leniency for Frank DiPascali Jr., who has admitted being Bernard L. Madoff’s crucial lieutenant in history’s largest Ponzi scheme, according to documents made public in federal court in Manhattan on Friday." Here's more from the piece (which includes links to two must-read documents for Madoff mavens):

Mr. DiPascali, who is facing up to 125 years in prison, “has already provided substantial assistance to the government in its investigation and prosecution of others” and “it is likely his cooperation will result in an extraordinary letter” in support of a lower sentence, prosecutors reported.

The disclosure was made in a letter submitted under seal to Judge Richard J. Sullivan of Federal District Court in December. The rest of the 10-page letter apparently described the specific help provided by Mr. DiPascali but the details remain secret in the heavily redacted letter.

To release the details now would cause “significant harm” to the government’s criminal investigation of the enormous Ponzi scheme operated by Mr. Madoff with Mr. DiPascali’s help, prosecutors told Judge Sullivan.

The letter was submitted as part of government and defense efforts to win Mr. DiPascali’s release on bail pending his sentencing this year on securities fraud and conspiracy charges.

Those efforts, rebuffed twice by Judge Sullivan, were finally successful last week after significantly tighter conditions were proposed and accepted.  The restrictions include a $10 million personal bond secured by the homes and retirement savings of several family members and friends, home detention with an electronic monitoring device in place and close surveillance by federal agents.

Although Judge Sullivan agreed that the new package was adequate to ensure that Mr. DiPascali would not flee, he expressed intense dissatisfaction with the bail arrangement that the defendant has negotiated with prosecutors.

In his order approving bail, Judge Sullivan said he nevertheless “believes that the government’s decision to endorse (and enhance) defendant’s bail proposal — and that endorsement is critical to the current application — is misguided.”

February 20, 2010 at 10:31 AM | Permalink


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Clearly there is no honor among thieves and we can only hope this
miscreant is ratting out all of those who helped perpetuate this fraud
and were rewarded with one of Madoff's 244 "special" non-split strike accounts which generated returns in excess off 100%.: the Madoff family in toto, Bernie's long time "friends" and "philanthopists", the
accountants and auditors, the feeders who extracted exhorbitant fees etc..

Who knows? Maybe he will even give up some of the government regulators
present at Shana's wedding who were persuaded to look the other way.

Posted by: thewiseking | Feb 20, 2010 4:14:00 PM

Can't help but wonder, in this time of epic "symbolic" white-collar sentences, what would constitute extraordinary leniency, fifty years? Forty years?

Posted by: John K | Feb 21, 2010 1:03:28 PM

I don’t think the judge should be so aggressively second-guessing an agreement that both parties to the litigation (the defendant and the government) are satisfied with.

Posted by: Marc Shepherd | Feb 22, 2010 9:16:52 AM

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