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Semone Anderson

Madoff Aide Allegedly Orders Creation of Fake Trading Tickets

About three weeks ago, Toomre Capital Markets LLC ("TCM") wrote about Annette Bongiorno, Bernie Madoff's former long-time secretary, in the post Annette Bongiorno, Madoff Aide Falls Under Suspicion. On Monday March 9th 2009, Ms. Bongiorno is back in the news on the front page of the Markets section of The Wall Street Journal.

In the article entitled Madoff Aide Allegedly Got Fake 'Tickets' of Trading, WSJ reporter Amil Efrati reveals that Ms. Bongiorno allegedly directed two assistants to create the bogus trading "tickets." These tickets documented the purported trades, which in turn resulted in gains that were in line with Mr. Madoff's steady annual returns.

"The two assistants to Ms. Bongiorno, Semone Anderson and Winnie Jackson, did clerical work and helped generate stock-trade confirmations for client accounts, which purported to show gains that were later applied to client accounts. The confirmations are now believed to have been fictitious, according to a court-appointed trustee who is liquidating the Madoff firm. Ms. Bongiorno, 60 years old, was once Mr. Madoff's personal secretary and later oversaw some of the firm's oldest accounts. The two assistants were interviewed by the U.S. attorney's office for the Southern District of New York through what are called proffer agreements, in which prosecutors agree not to use their statements against them as long as they tell the truth, according to people familiar with the matter."

Given that Ms. Bongiorno apparently also actively raised funds for the Madoff fraud from her neighbors in Queens New York, this new information highly suggests to Toomre Capital Markets LLC that Ms. Bongiorno will likely be facing some criminal penalties of her own. Surely, if she was ordering the creation of bogus trade tickets, she must have known for some period that Bernie Madoff's investment operation was a scam. If she further profited from fees received from managing so-called "RuAnn" feeder accounts for friends from her old neighborhood, federal prosecutors are likely to come down on her hard. Of course, though, she might have some juicy information about the possible participation of say Ruth Madoff, Peter Madoff and/or either of the sons, Andy or Mark Madoff that just might mitigate her criminal penalties.

This WSJ article also reveals that Federal prosecutors have recently turned their attention to a separate group that handled many of the institutional investment accounts mired in the Madoff fraud. "That group was headed by Frank DiPascali Jr., 52, who hasn't yet been asked to speak with prosecutors, according to a person familiar with the matter. Mr. DiPascali's lawyer declined to comment on his client's behalf. Mr. DiPascali referred to himself as the "director of options trading" at the firm and Mr. Madoff told investors he executed trades, despite the fact that a court-appointed trustee found that no trading occurred for at least the past 13 years. Prosecutors have asked at least three employees who worked under Mr. DiPascali about his role in the firm, according to a person familiar with the matter. The employees, Eric Lipkin, JoAnn Crupi and Robert Cardile, who is Mr. DiPascali's brother-in-law, also had proffer agreements with prosecutors."