Former Madoff executive gets 10 years in prison, ordered to forfeit $155 billion

NEW YORK, N.Y. – Bernard Madoff’s ex-director of operations for investments was sentenced Monday to 10 years in prison by a judge who cited the fraud’s “smouldering ruins” as she kicked off an eight-day stretch during which she will announce the punishments of four other former Madoff workers.

“You lived a prestigious and luxurious life for decades. We now all know it was supported by a massive fraud,” U.S. District Judge Laura Taylor Swain told 67-year-old Daniel Bonventre after she announced his sentence, including an order to forfeit $155 billion. “We all live among the smouldering ruins literally of thousands of lives, yours included.”

“You were not an architect of the Ponzi scheme and are not a person who is evil at heart. You should not spend the rest of your life in prison,” she said as she explained leniency that will likely be encouraging to Madoff’s former secretary, Annette Bongiorno, 66, computer programmers Jerome O’Hara, 51, and George Perez, 48; and account manager JoAnn Crupi, 53.

They face sentencing proceedings through next Monday. The four and Bonventre were convicted at trial earlier this year.

Federal sentencing guidelines had called for Bonventre to spend the rest of his life in prison, with a maximum of 220 years, 70 years longer than the 150-year term being served by Madoff. The Probation Department had recommended a 20-year term, while prosecutors had urged a sentence significantly longer than that. The defence recommended Bonventre receive home confinement, community service or a short term of incarceration.

The judge ordered Bonventre to report to prison Feb. 19. She said she will recommend he be permitted to spend the last year in home detention.

Swain acknowledged the pain of thousands of investors and others who lost billions in a fraud that began in the 1970s.

But she drew a clear distinction between Madoff and Bonventre, saying Bonventre was a “pampered, compliance and over-compensated worker who wilfully blinded himself to the truth” after helping the fraud along since 1992 by falsifying books and records.

“I was used by the ultimate con man,” Bonventre said before his sentence was pronounced.

Madoff was arrested in December 2008 and pleaded guilty to fraud charges three months later. He was ordered to forfeit $171 billion. The huge forfeiture numbers represent an amount of money connected to the fraud, not the amount stolen or lost.

Madoff, the one-time Nasdaq chairman, told investors in financial statements in November 2008 that the nearly $20 billion they had given him had grown in value to over $60 billion. In reality, Madoff didn’t invest their money and was nearly broke.

Prosecutors have said that the five convicted at trial deserved stiffer sentences than Madoff’s brother, Peter, who received a maximum 10-year sentence. Peter Madoff, the one-time compliance director for Madoff’s firm, had pleaded guilty.

They said Bonventre and Bongiorno were the most culpable of the five because of their “40-year involvement at the very heart of the fraud.” They said Crupi, who joined later but “took on an active and ambitious role,” was next while the computer programmers were slightly less culpable than Crupi.