Bernard Madoff's investment firm was not only a criminal operation, according to federal prosecutors, it was a sex den featuring multiple romantic entanglements among employees, clients and even the convicted Ponzi schemer himself.
"The government's investigation has revealed that, over the course of the multi-decade fraud … a number of Madoff Securities employees and customers … were engaged in romantic or sexual relationships," Justice Department prosecutors wrote in a motion filed in Manhattan federal court this week. "For example, one of the defendants was in a love triangle with Bernard Madoff himself."
The document was filed as part of an effort by the feds to keep the salacious information from being introduced when Madoff's former secretary, Annette Bongiorno, and others face trial in the fall on charges of securities fraud and conspiracy. Prosecutors told the court they anticipate lawyers for Bongiorno and her co-defendants would attempt to use the sex secrets to damage the credibility of witnesses the feds plan to call. They then called on the judge to issue "an order excluding any such evidence - by either side."
But the otherwise-antiseptic filing caught the defendants and their lawyers by surprise, they told ABC News Friday.
"My client does not know what the government refers to when it refers to romantic entanglements," said Bongiorno's attorney, Roland Riopelle. "I don't know anything about what the government thinks it knows."
Questions about the romantic references occupied a portion of a pretrial hearing Friday and lawyers for both sides eventually agreed to talk privately about the extracurricular escapades that were allegedly occurring as Madoff ran his $65 billion Ponzi scheme, bilking investors around the world.
After defense lawyers get the R-rated details from prosecutors, they will decide whether to use the embarrassing info at Bongiorno's trial, likely to in October.
Madoff, founder of Bernard L. Madoff Investment Securities LLC and a former chairman of the Nasdaq, is serving a 150-year federal prison term.