Today when anyone hears “Ponzi scheme” they think Bernie Madoff. And for good reason, too. Madoff is responsible for the biggest Ponzi scheme in history and had claimed that he worked alone to create the ill-fated ‘business plan’ that is estimated to have caused losses of around $17.3 billion.
Some of the charges that were brought against Madoff in 2008 included securities fraud, wire fraud, mail fraud, money laundering, perjury, theft from employee benefit plans and making false filings with the SEC. March 12, 2009, Madoff pleaded guilty to 11 federal felonies. and was sentenced to 150 years in federal prison on June 29, 2009.
Although Madoff still claims he acted alone, eight people have pled guilty to some degree of involvement in unethical practices involving Madoff and his businesses, including:
- David G. Friehling pled guilty to charges of securities fraud, investment adviser fraud and filing false audit reports with the SEC on November 3, 2009.
- Peter Madoff, Bernie’s brother, although denying he knew of the actual scheme itself, pled guilty to numerous charges, including failing to pay taxes on millions of dollars of income, submitting false filings to securities regulators and putting non-working family members on the payroll.
- Frank DiPascali pled guilty to 10 counts including conspiracy, investment advisory fraud, mail fraud, perjury and international money laundering on August 11, 2009.
- Eric Lipkin pleaded guilty to six criminal counts including falsifying documents, putting non-working people on the payroll in August 2011.
Now Irvin Lipkin, Eric Lipkin’s father, will soon be added to that list as he is expected to plead guilty to charges of falsifying documents, falsely paying people for 401(k) and retirement benefits and conspiracy to commit securities fraud. The elder Lipkin started working for Bernie Madoff in 1964 and was still paid by Madoff for many years even after retiring in 1999.
In 1998, Lipkin referred to Madoff as “the brother I never had,” a testament to how close the two had been, both professionally and otherwise. Lipkin could get jail time up to 10 years for his involvements in the Madoff mess.