Frank DiPascali, Madoff deputy who aided feds, dies at 58

  • By Erik Larson Bloomberg News
  • Sunday, May 10, 2015 9:01pm
  • Business

NEW YORK — Frank DiPascali, the finance chief for Bernard Madoff who turned on former colleagues to cooperate with the federal government, has died before he could be sentenced for his role in the biggest Ponzi scheme in U.S. history. He was 58.

He died May 7, his lawyer Marc Mukasey said on Sunday in an emailed statement. The cause was lung cancer.

“He was grateful to have been able to make some amends by helping the government these past few years,” Mukasey said.

DiPascali joined Madoff’s firm as a teenager, without formal finance training, before going on to assist in the $17.5 billion fraud. He was the star government witness in its prosecution of five employees of Madoff, who is serving a 150-year sentence in federal prison.

A jury found all five defendants guilty on all 30 counts, though the judge in their trial assailed testimony by DiPascali, saying it was largely unbelievable. Defense lawyers said he was far more culpable for the fraud than their clients.

DiPascali, who called himself Madoff’s “right-hand man,” is a “glib storyteller and an admitted and convicted perjurer,” U.S. District Judge Laura Taylor Swain said in Manhattan federal court last year.

DiPascali was the highest-ranking Madoff aide to testify at the trial, the only one ever conducted on the Ponzi scheme that collapsed after Madoff’s arrest on Dec. 11, 2008. The five former employees were convicted of aiding the fraud for decades and getting rich in the process. They were sentenced to between 2 ½ and 10 years in prison.

Madoff, 77, pleaded guilty in 2009. At least seven others also pleaded guilty, including his brother Peter Madoff, who is serving a 10-year term.

DiPascali, who faced as long as 125 years in prison at sentencing, was seeking leniency by testifying against his former colleagues, all of whom claim they were duped by him and Madoff into believing his business was legitimate. Their lawyers claimed DiPascali was lying to win less time behind bars.

The other defendants are Joann Crupi, who managed large accounts; Annette Bongiorno, who ran the investment advisory unit; Daniel Bonventre, Madoff’s ex-operations chief; computer programmers Jerome O’Hara and George Perez, who allegedly wrote code to print millions of fake account statements and trade confirmations as it grew rapidly in the 1990s.

“In my nearly eight years as a federal prosecutor, I have dealt with dozens of cooperating witnesses. None of them compare to Frank DiPascali,” Julian Moore, a former federal prosecutor who worked on the Madoff case, said in an e-mail. “He was strongly committed to providing truthful information that assisted the government in its criminal prosecutions and monetary recoveries.”

DiPascali was born on Oct. 28, 1956, in the Howard Beach neighborhood of Queens, New York, according to public records. He attended Archbishop Molloy High School in New York. He joined Madoff’s firm in 1975, when he was 19.

Questioned about when he learned Madoff was orchestrating a monumental fraud, DiPascali offered differing accounts.

He told prosecutors at one point that he knew about the fake trading “for as long as I could remember.” Later, he testified he didn’t know until 1992, the year Madoff and his inner circle devised a wide-ranging scheme to trick the Securities and Exchange Commission about the nature of the firm’s trading.

DiPascali has said that, even after he discovered the trades were fake, he believed Madoff was investing client funds in other ways, including in real-estate deals and French banks.

He had also said he didn’t realize Madoff was running a Ponzi scheme — paying investors with money from other investors — until Madoff confessed to him in the days before his arrest.

To perpetrate the scheme, the five defendants convicted in last year’s trial used millions of fake trading confirmations and false account statements to trick customers into believing their money was being used to buy securities— under the direction of Madoff and DiPascali.

No trading took place in the investment business, which collapsed when Madoff ran out of money to pay withdrawals.

DiPascali agreed with a defense lawyer during testimony last year that he had lied to several of the defendants at various times to prevent them from discovering the fraud, including when the group created fake trading records to trick regulators and auditors. He even agreed on the witness stand that he was good at fooling people.

His admitted flaws notwithstanding, prosecutors acknowledged his efforts to come clean.

“Unlike so many he helped to convict, he, at least, did his best to right his many wrongs and fully accepted his key role in this devastating fraud,” Moore said. “Understandably, this will be cold comfort to many victims of the fraud, but it does provide a small measure of redemption.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.