Victims of convicted Ponzi schemer Bernard Madoff filed angry letters in federal court today, alarmed by reports that Madoff lieutenant Frank DiPascali may receive a very lenient sentence if prosecutors have their way.
Federal prosecutors filed papers in late February indicating that DiPascali's cooperation with prosecutors will result in an "extraordinary letter" seeking leniency for DiPascali. Once Madoff's chief financial officer, DiPascali faces up to 125 years in prison after pleading guilty to multiple counts of fraud, conspiracy, money laundering, perjury and income tax evasion.
DiPascali, who worked for Madoff for more than three decades, is cooperating with authorities, who seek to recover money from Madoff's $65 billion investment scam. The letters, filed in Manhattan, demand punishment for DiPascali.
"This is not vengeance," wrote investor Robert Jacobson, "but merely a hope that it may serve notice to other conspirators in financial scams that their misdeeds will not be treated lightly despite any assistance they may render to authorities." Jacobson asked for the maximum penalty allowed.
Victim Ann Altman wrote that cooperation "does not convert this ignoble criminal... into a man who deserves your mercy or compassion."
"In my estimation he is at fault and deserves to be punished," wrote Ellenjoy Fields. "I am left with nothing... He needs to pay his dues."
DiPascali remains behind bars. Prosecutors have cited DiPascali's cooperation in asking Judge Richard Sullivan to allow DiPascali to return to his New Jersey home, with bail set at $10 million, but have so far been rebuffed.
In a February 19 letter to Judge Sullivan, prosecutors said DiPascali deserved leniency because he was providing "substantial assistance." Only portions of the letter were made public, since prosecutors said it would cause "considerable harm" to release other portions.
"[DiPascali] has already provided substantial assistance to the government in its investigation and prosecution of others," said the letter. Prosecutors are thought to be building cases against Madoff's sons, Mark and Andrew, and his brother Peter.
Under the terms of his guilty plea, DiPascali agreed to "tell all and name names." DiPascali pleaded guilty at an August 11 hearing at which he apologized for his actions and described the transactions that Madoff pretended to be making on behalf of his investment clients as "all fake."
During the hearing, DiPascali read a statement into the record explaining how he was an 18 year-old high school student from Queens, N.Y. when he joined Bernie Madoff in 1975, and he didn't know how he became the person who stood in court today. "I didn't know anything about Wall Street," DiPascali said.
"There was one simple fact that Bernie Madoff knew that I knew: It was all fake, it was all fictitious," he said, adding that he "perpetrated the illusion" that trades were taking place when none actually took place. "I knew no trades were happening," he said.
At the end of his statement, DiPascali's voice cracked as he said, "There is no excuse. I regret everything that I did. I accept complete responsibility for my actions."
DiPascali's sentencing is set for May 2010.