Two computer programmers whom the government says helped Bernard Madoff create phony paper trails to cover up his investment fraud scheme were charged today by the SEC and the Justice Department with conspiracy to falsify books and records.
Jerome O'Hara and George Perez, worked on the secretive 17th floor of Madoff's New York office, allegedly creating false records on an out-of-date IBM computer server, known as "House 17" at the direction of Madoff's crony Frank DiPascali, who pled guilty to fraud charges in August and is cooperating with authorities.
In 2006, the two employees confronted Madoff and "told him they would no longer lie for him", according to government documents filed in the case today.
A note found by the FBI in O'Hara's desk read "I won't lie any longer. Next time, I say "ask Frank" according to the new filing.
Government prosecutors say Madoff then directed DiPascali to pay O'Hara and Perez "whatever they wanted in order to keep them happy", and both men then received a 25% pay raise and bonuses of $60,000.
Access to the 17th floor was restricted with a key card and "No one really was allowed to go down there" according to Eleanor Squillari, Madoff's long time secretary, according to "The Madoff Chronicles," a new book by ABC's Brian Ross.
The desk and floors were always littered with stacks of papers and computer printouts. "It looked like your crazy aunt's basement," former computer tech manager Bob McMahon told Ross.
According to Ross' book, investigators say between twenty-five and thirty employees, outside accountants and fund managers and Madoff family members could ultimately face criminal charges for their roles.
U.S. Attorney Preet Bharara said in a statement released today the men "helped construct Bernie Madoff's house of cards" in his "epic fraud " and that the investigation remains ongoing.
Attorneys for O'Hara and Perez did not return calls for comment.