Complaint implicates Madoff aide DiPascali in scam

— -- A former senior aide to Bernard Madoff had an active role in calming the concerns of a corporate client whose executives asked questions about the Ponzi scheme mastermind's business operations, a government complaint shows.

Frank DiPascali served as a central contact between Madoff and the Fairfield Greenwich Group, which had invested $7.2 billion with the now-convicted financier, according to the complaint filed last week by Massachusetts Secretary of State William Galvin's office.

DiPascali participated in two due-diligence sessions at which Fairfield executives asked questions about Madoff's trading records, strategy and issues, the complaint shows.

He also issued a letter that outlined the purported procedure used to vote proxies on securities Madoff listed as being held on Fairfield's behalf, the complaint said. DiPascali is also portrayed as alerting Fairfield about Madoff's purported trading moves.

The complaint, which offers one of the first detailed accounts of DiPascali's work, accused Fairfield of fraud for allegedly misleading investors about its due-diligence oversight of Madoff. The company insisted it conducted "vigorous and robust monitoring" of what Fairfield and other clients thought was a large Madoff trading business.

Madoff, however, didn't make any trades. During his March 12 guilty plea, the former Nasdaq chairman confessed he instead used money from new investment clients to pay earlier ones.

Madoff has insisted he acted alone in fleecing charities, trusts, pension funds, hedge funds, celebrities and average investors around the world in crimes he said dated to the early 1990s.

But as Madoff awaits a June sentencing and possible 150-year prison term, investigators have focused on others who worked with him, including relatives and DiPascali. Apart from Madoff and his firm's former accountant, no one has been charged.

Marc Mukasey, DiPascali's defense attorney, declined to comment on the Massachusetts complaint. Galvin, however, said Fairfield executives told his investigators DiPascali had a key role in what was billed as Madoff's secret trading system.