Madoff's CFO Pleads Guilty To Conspiracy, Fraud Bernard Madoff's former chief financial officer pleaded guilty Tuesday to all criminal counts brought against him by federal prosecutors, including securities fraud, falsifying records and international money. He admitted he helped "carry out a fraud that hurt thousands of people." Frank DiPascali faces as much as 20 years in prison on each fraud and money-laundering charge. At the hearing, DiPascali said at the plea hearing that the transactions were "all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time." NPR's Jim Zarroli explains what happened in court today.
NPR logo

Madoff's CFO Pleads Guilty To Conspiracy, Fraud

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Madoff's CFO Pleads Guilty To Conspiracy, Fraud

Madoff's CFO Pleads Guilty To Conspiracy, Fraud

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


As the Bernard Madoff scandal has unfolded, a key question has been whether Madoff could've possibly carried out a $65 billion Ponzi scheme on his own. Well, today, an aide to Madoff pled guilty to securities fraud and other charges. His name is Frank DiPascali, and today he went to jail.

For more, we're joined now by NPR's Jim Zarroli. And Jim, what was his role at the firm and how much did he know about what Bernie Madoff was doing?

JIM ZARROLI: Well, Frank DiPascali was the chief financial officer at the firm, and he had worked with Madoff for years. He was a sort of a middleman. And he was, you know, well-known to the retail and institutional investors who had their money in the firm. If you were an investor and you had a question, Frank DiPascali was the one you dealt with. You know, if you wanted to take money out of your account, he was the one that you contacted. He worked up on the 17th floor right alongside Bernie Madoff. So he was really very intimately involved in the day-to-day operations of the firm.

BRAND: And what does the government say about his role in the fraud itself?

ZARROLI: Well, you may recall that Madoff was telling investors that he was putting their money into certain financial products like stocks, but in reality, he wasn't doing anything of the sort. He was using the money for other things, chiefly, you know, paying off people who had already invested before with the firm. It was a Ponzi scheme.

So the government says DiPascali helped prepare a lot of the fake documents, the fake computer records to make it look like the firm was doing real trading. At one point, according to the Securities and Exchange Commission, Madoff started to get concerned because, you know, all these fictitious trades always seemed to make money, and he thought that looked bad. So he told DiPascali, you know, put down some losses into the record, too, and DiPascali did that.

The other thing that DiPascali did is he helped Madoff conceal how many advisory accounts the firm had because if the truth came out that Madoff had thousands of these accounts, he would've had to register with the SEC, and that would've just invited a lot more regulatory scrutiny.

BRAND: DiPascali appeared in court today to plead guilty in a plea arrangement. He also spoke about the case itself. What more did he say?

ZARROLI: Well, he said the firm was involved - he knew the firm was involved in fraudulent activity, and he says others at the firm knew so as well. He was very contrite. He said he knows he helped hurt thousands of people. He also said he knew that just apologizing didn't really count for much.

He was very frank about everything that had happened. He said he knew that the transactions that Madoff's firm carried out were all fictitious. He said he knew it for years. He said it was wrong, I knew it was wrong at the time. And here is something potentially important. He said other people at the firm, not just Bernie Madoff, knew what was going on.

BRAND: So does that mean we're going to see more guilty pleas going forward?

ZARROLI: Well, you know, this is potentially huge because Madoff himself really didn't cooperate with the feds. He pleaded guilty. He admitted what he did, he said - and he's now in prison in North Carolina, but he never really turned anyone else in. He said he was the only one at the firm who knew what was going on - none of his employees, nobody in his family - and of course that seemed hard for a lot of people to believe.

But as a result now, the only people who have been charged criminally have been Madoff and his accountant. But, you know, now we have someone on the inside who's willing to name names and so this could take the case in a, really, in a whole different direction.

BRAND: Thank you, Jim.

ZARROLI: You're welcome, Madeleine.

BRAND: That's NPR's Jim Zarroli. We've been talking about the guilty plea today by Frank DiPascali, an aide to Bernie Madoff.

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.