August 11, 2009— -- Bernard Madoff's right hand man in his monumental Ponzi scheme, Frank DiPascali, will "tell all and name names" under the terms of a guilty plea deal announced today in federal court in New York City.
DiPascali apologized for his actions and described the transactions as "all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time."
Dressed in a dark suit, DiPascali entered pleas of guilty to ten counts and the judge rejected a request by prosecutors that he be allowed to post bail. He was immediately ordered to jail and was handcuffed and led out of the courtroom, leaving everyone surprised.
Click here to see the letter to the judge from prosecutors.
In the interim, he is expected to provide prosecutors with a road map of those in the Madoff inner circle who were involved in the scheme that swindled investors out of an estimated $64.8 billion.
Click here to go behind the scenes of Brian Ross' investigation into Bernie and Ruth Madoff.
During the hearing, DiPascali read a statement into the record explaining how he was an 18 year-old high school student from Queens, NY 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."
Click here for complete Blotter coverage of Madoff and his Ponzi scheme.
DiPascali said he is "very, very sorry" and that while he knows his "apology means almost nothing," he hopes that his "actions going forward do mean something."
The judge at this point said he accepted his guilty plea and then began a long discussion of remand, saying that bail is "dwarfed" by the magnitude of the fraud. He said that while the prosecutors were looking forward at what DiPascali could do to help them, he was looking backwards at what he did for the past decades. "I am unpersuaded," Judge Richard Sullivan said.
DiPascali Cooperating with Investigators
DiPascali's cooperation was deemed crucial because Madoff refused to help the FBI unravel the scheme and maintained he "acted alone." It is a claim investigators say is a "huge lie."
Over 33 years, DiPascali rose to the position of chief financial officer at Madoff's investment advisory business despite his lack of college education or any experience in the financial industry.
DiPascali was one of two people who ran the notorious 17th floor at Madoff's office where thousands of bogus monthly account statements were produced to give investors confidence their money was well invested. In fact, investigators say there is no record that Madoff and DiPascali ever traded any stocks for the clients.