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Now to the case of Bernard Madoff and the question of whether he could have pulled off a massive Ponzi scheme on his own. Sources close to federal prosecutors say it's likely that ten or more of Madoff's associates will be charged in the coming months.
NPR's Robert Smith reports on what the prosecutors would have to prove.
ROBERT SMITH: Often the big fish is the last one reeled in during a massive criminal case. But Brad Simon, a former federal prosecutor, says there is still an unanswered question, where all the money went plus a personal motivation.
Mr. BRAD SIMON (Former Federal Prosecutor): Well, prosecutors as well as the SEC have been asleep at the switch in this case. And so they are feeling enormous pressure to really bring in more bodies, because there's an angry mob out there.
SMITH: Angry in part because Madoff claims that he acted alone, which would mean that, for decades, he kept his family members and 200 employees in the dark, single-handedly hiding billions of dollars in losses and producing hundreds of thousands of false documents a year. Federal investigators aren't buying it. Everyone who worked with Madoff is now under scrutiny. But profiting off the scam isn't enough to lock someone up. Former federal prosecutors say you have to have two components to bring a case. A person had to know about the fraud and take some sort of action. The action part, according to Brad Simon, is easy.
Mr. SIMON: Prosecutors can find one thing that somebody did. Perhaps they made a phone call and made a solicitation knowing that what they're saying was not quite right. That could constitute an overt act to get them in the conspiracy and once they're in the conspiracy, they are liable for all the acts that took place within that conspiracy.
SMITH: Mailing a letter, transferring money - all overt acts. But as Madoff court documents reveal, most of that detail work was done by people who may have been ignorant. Prosecutors allege that Madoff specifically hired people without financial experience. The higher-ups at the company are a different story. William DeVaney is a former prosecutor who now works at the private firm, Venable.
Mr. WILLIAM DEVANEY (Former Prosecutor): You have to have criminal knowledge and criminal intent. But the government can try to back into that by demonstrating willful blindness. In other words, that Madoff's returns were too good to be true. Any responsible investment adviser should have known that.
SMITH: Then prosecutors only have to show that the person willfully turned a blind eye to that knowledge. So far, only Madoff's outside accountant has been charged. Not that he knew about the Ponzi scheme but that he falsely certified his audits. We don't know who else is on the list of people likely to be charged but we can look at the list of people already being targeted in private lawsuits, that includes Madoff's family, his wife Ruth, brother Peter, and sons Mark and Andrew, his chief of staff, Frank DiPascali and a whole list of outside investment advisers who steered billions of dollars to Madoff through the so-called feeder funds.
Brad Simon, who now defends white-collar criminals says that the main defense in these kinds of cases is ignorance. And in the Madoff case?
Mr. SIMON: They will point to the fact that he was, you know, quite well-respected in the financial community. He was head of NASDAQ. And if the SEC didn't have reason to suspect him, why should their clients have reason to suspect that he was doing anything illegal?
SMITH: And Lawyer William DeVaney notes that those close to Madoff may get some help from the man who got them in trouble in the first place.
Mr. DEVANEY: It's perfectly plausible that Bernie Madoff could end up as a defense witness in one of these cases saying, I did all of this alone.
SMITH: Madoff hasn't shown any willingness to help out prosecutors. And with 150 years of hard time ahead, he doesn't have much incentive.
Robert Smith, NPR News, New York.
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