Bernard Madoff's multibillion-dollar fraud began in the early 1970s with several employees working together to fake records when no trades actually took place, a former trader at Madoff's firm said in pleading guilty to criminal charges Monday.
The former trader, David Kugel, told a Manhattan federal court judge that he and two other longtime Madoff employees, Annette Bongiorno and Joann Crupi, used rates of returns on client statements that were pre-determined by Madoff himself.
"I worked together with them to create the false trades and make them appear on investment advisor client statements and confirmations," Kugel, 66, said in admitting to six charges.
Kugel, who is cooperating with the government investigation, said the trades were executed only on paper. "Specifically between the early 1970s to December 2008 I helped create fake back-dated trades."
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