Report: Madoff Used Fake Trading Tickets

A top aide to disgraced money manager Bernard Madoff had employees generate trading tickets, thought to be fake, in order to dupe investors into thinking their returns were legitimate, the Wall Street Journal reported Monday.

According to Journal reporter Amir Efrati, Annette Bongiorno directed two assistants to research daily stock prices, at times dating back several months, and use the information to produce trading tickets that would reflect the robust returns Madoff had become famous for.

"This is how it was done – there were all these thousands and thousands of trade confirmations puporting to sort of signify that there were trades that occurred and we know now that, obviously, there weren't trades at least for 13 years and probably a lot longer than that – maybe decades," Efrati told CBS News.

Irving Picard, the court-appointed trustee charged with sorting out the Madoff mess, indicated last month that there was "no evidence to indicate securities were purchased for customer accounts."

Madoff is scheduled to appear in federal court Thursday and is expected to plead guilty to charges that range from securities fraud to money laundering, reports the Journal. U.S. District Judge Denny Chin invited victims of Madoff's alleged $50 billion ponzi scheme to the hearing – the very same people who got bogus client statements in the mail each month.

"For the most part, the people who got these statements had no reason to believe anything was wrong," said Efrati. "They showed these statements to their accountants, their accountants signed off on them."

But looking back at the paper trail, Efrati said that it was possible to detect that something was amiss.

"They say that the statements didn't make sense at the time and that you could, by scrutinizing client statements that were going out every month, deduce that something was wrong."

The two assistants, Semone Anderson and Winnie Jackson, offered information on the alleged fake tickets to the U.S. attorney's office in what is called a proffer agreement, which protect informants from having their statements used against them as long as they are truthful, reports the Journal.

Prosecution interviews seem to have focused initially on low-level employees and may build to include upper-level members of Madoff's operation.