NEW YORK (CBSNewYork/AP) — Bernard Madoff‘s longtime controller says it took her a decade to catch on to her boss’ shady practices, but she eventually went along with the Ponzi scheme and made $3 million in the process.
Enrica Cotellessa-Pitz, who worked for Madoff for three decades, began her testimony Monday in federal court in Manhattan. She pleaded guilty in 2011 to four counts — including broker-dealer fraud and filing false reports with regulators — and faces up to 50 years in prison. She said she is testifying against five former colleagues in exchange for leniency.
As WCBS 880’s Irene Cornell reported, Cotellessa-Pitz told the jury about a meeting of Madoff’s inner circle, in which he instructed her on how to transfer money from the so-called “investment firm” that was at the heart of the massive Ponzi scheme to his failing legitimate side of the business. When she looked confused, she quoted Madoff as saying, “You all know what we do here.”
“I did not know what my boss was referring to,” the Brooklyn native told the jury.
Cotellessa-Pitz testified that she first applied for a job with Madoff’s company right out of high school, but she didn’t get the job. Instead, she met Madoff’s finance chief, Frank DiPascali, and began dating him — and was still involved with him when she was finally hired two years later. When Cotellessa-Pitz and DiPascali eventually broke up, Madoff was upset and reprimanded her, she said.
DiPascali pleaded guilty in 2009 to 10 counts, including conspiracy, fraud and money laundering, and is also expected to testify at the trial.
The collapse of Madoff’s private investment business ended up costing clients nearly $20 billion. A court-appointed trustee has recovered much of the money by forcing those customers who received big payouts from Madoff to return the funds.
Prosecutors have described the defendants as “necessary players” in Madoff’s fraud.
They allege that Annette Bongiorno and account manager JoAnn Crupi used old stock tables to fabricate account statements and other fake records intended to dupe clients by showing steady returns even during economic downturns; that computer programmers Jerome O’Hara and George Perez developed a software program that automated the scheme; and that Daniel Bonventre, director of operations for investments, kept three separate books on the business designed to fool the Securities and Exchange Commission, banks or anyone else who examined them.
The defendants also rewarded themselves with tens of millions of dollars in salary and bonuses from a “slush fund” of stolen money, prosecutors say.
The defendants have denied the charges.
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