Bernie Madoff Cronies Arrested

Annette Bongiorno, Joann Crupi lived in luxury, bought cars and beach homes.

Nov. 18, 2010 — -- Two key employees of Ponzi schemer Bernie Madoff have been arrested on federal fraud charges and are in FBI custody in New York and in Florida.

Annette Bongiorno and Joann Crupi, both of whom worked for Madoff for decades, are charged with conspiracy, securities fraud, tax evasion and falsifying records.

The arrests are the result of the cooperation of Madoff's former finance chief, Frank DiPascali Jr., who agreed to plead guilty to his role in Madoff's multibillion dollar investment scam as part of a cooperation arrangement.

"Joann Crupi was arrested by the FBI this morning at her residence in Westfield, New Jersey and Annette Bongiorno was arrested at her home in Boca Raton, Florida," said FBI spokesman Richard Kolko. "Both of these arrests took place without incident. Charges, in connection with the Madoff investment fraud, will be unsealed in the Southern District of New York later today."

Annette Bongiorno was a key aide who worked with Madoff for 40 years. Hired out of high school in Queens as Madoff's secretary, prosecutors say she personally handled the accounts of top Madoff clients and helped run the secretive "17th floor," where employees created phony documents. She and her husband lived a lavish lifestyle, driving a Bentley and a Mercedes, owning million-dollar homes in Boca Raton and New York.

Crupi, also a longtime employee, worked on the 17th floor with Bongiorno, handling investor funds and kept track of the firm's daily cash balance while Bongiorno allegedly sent out phony account statements. Crupi owned a $2.5 million New Jersey beach house, which was purchased in cash.

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'Why Did It Take The Government So Long?'

"I can't even begin to tell you how I feel – this is a great day," said Eleanor Squillari, who was Madoff's personal secretary. "The government is finally moving forward."

"It was clear Annette was involved," said Squillari. "She was there from the beginning. She personally handled all the favored clients -- especially those who ended up with more money than Bernie had when he went to jail."

But Squillari also said she didn't understand why the arrests came more than a year after Bernie Madoff's conviction on fraud charges. "Why did it take the government so long?" asked Squillari. "Why did the government allow Annette and her husband to continue their fancy lifestyle while elderly victims lost everything, lost their homes? "

Federal prosecutors earlier this year filed civil complaints against the two women, seeking the return of at least $5 million in assets allegedly traced to the Madoff fraud.

In the past, prosecutors alleged that Bongiorno, who began working for Madoff in 1968, "knowingly perpetuated" her boss's scheme by lying to investors about stock trades and fictitious profits. In addition to an annual salary and bonuses that peaked at more than $600,000 in 2007, Bongiorno maintained her own Madoff "investment advisory" accounts from which she withdrew $14.5 million despite having invested only $919,000, prosecutors allege.

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Bernie Madoff is currently serving a 150 year prison sentence in a federal prison in North Carolina. No criminal charges have been filed to date against Bernie Madoff's wife Ruth, his sons Mark and Andrew or his brother Peter.

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