Top Madoff Exec Talking To Feds

Source: Longtime CFO Frank DiPascali Offers Details Of Scheme In Exchange For Reduced Sentence

(CBS)  Ever since Bernie Madoff admitted running the world's largest Ponzi scheme, investigators' focus been on what close members of his family knew about the scam.

Now the case has taken an unexpected turn. Madoff's right hand man is negotiating with prosecutors - and may be ready to provide inside information about the scheme that swindled investors out of billions of dollars, as CBS News chief investigative correspondent Armen Keteyian reports.

CBS News has learned of a potential plea agreement between Madoff's longtime chief financial officer, Frank DiPascali, and federal prosecutors.

According to a source with knowledge of the Madoff investigation, negotiations between DiPascali's attorney and the government intensified after the arrest of Madoff's accountant David Friehling, who was said to be cutting his own deal, last month.

"I think it behooves him to come forward say what he has to say, say what he knows," said Elizabeth Crotty, a former Manhattan district attorney. "Hopefully its helpful to the investigation and then he gets less time."

The only non-family member of Madoff's inner circle, DiPascali is a college dropout who grew up in the rough and tumble neighborhood of Howard Beach, Queens. He joined Madoff's firm in 1975, rising over the next 33 years to become his right-hand man, and the key contact for investors.

Investors like Dr. Murray Morrison, who said in a meeting last October DiPascali opened a window into a secret side of Madoff's operation.

"He told us Bernie Madoff said they probably shouldn't put anything in e-mail," Morrison recalled.

A source said DiPascali had "nothing incriminating" on any Madoff family members, including brother Peter, the firm's chief compliance officer, or Madoff's two sons, Andrew and Mark, who headed the firm's trading division.

However, in exchange for a reduced sentence, DiPascali is prepared to name names - to divulge the inner workings of Madoff's scheme, including his part in creating what the source called "doctored account statements."

Now CBS News has learned the federal government has expanded its investigation to funds that raised money for Madoff, something DiPascali is said to know something about.

[cbsblogger]

Social Security has been a Ponzi scheme but one that has benefited only the rich and corporate interests. It has been funded by the payroll taxes on working Americans but its surplus has funded a government and tax cuts for the rich who pay little relatively into Social Security. When Social Security can't make the payouts is when the rich who benefited for years with untaxed unearned income should be required to reimburse the system.

[cbsblogger]

Is there anyone who really believes that Sen Chuck Schumer NY (and others) didn't whisper in the SEC's ear to lay off investigating Madoff?

Madoff had Senators and multi billionaires in his hip pocket, all of whom thought him ( Bernie Madoff) as a valuable commodity and great guy pre-December 2008.

[quapawsix]

End the GOV/CORP now.

[HAIRYONETOOOO]

If Social Security is going broke it's not the fault of the people like me, I have paid in for 50 years, in fact an amount equal to 15% of my gross income(except the years I made over the maximum for payments),so 15% for 50 yrs definitely would pay the amount I get monthly many times over. If that money had been put into CD's and compounded for 50 years it would have been about 1.5 million! I think that would pay my insurance and social security payment very easily!!!!!!!!!

[HAIRYONETOOOO]

In Texas the Stanford Financial $8 billion fraud was aided and abetted by US Senators Cornyn and Kay Baily Hutchison who took trips to exotic locals(Cayman Islands-Large discreet banks) with Mr. Stanford on his private planes, and also accepted large donations from him, tell me they are not whispering in the ears of the SEC & DOJ to ease off on him!!

[HAIRYONETOOOO]

SO WHAT THEY ARE ALL GOOD BUDDIES WITH THE SEC, WALL STREET, DOJ ETC AND WILL GET SLAP ON THE HAND, 90 DAYS PLAYING GOLF AT CLUB FED, THEN GO HOME TO THE $100 MILLION THEY HAVE STASHED AWAY. THAT'S THE SAME THING THAT WILL HAPPEN IN TEXAS WITH STANFORD FINANCIAL, HE WAS/IS A BIG DONATER TO THE GOVERNOR OF TEXAS AND BOTH SENATORS(ALL REPUBLICANS), HE WILL WALK.

[FrankDenise]

I agree with everyones comments...I hate to say because I do believe America is the greatest country in the world but the government is nothing but a bunch of thieves that could care two Shi*s about its people...Im in the same boat as everyone else as far as Madoff is concerned...My annuity through my union jos was invested with Madoff and we got robbed as well....First they said they were holding back 15% of our total amount to investigate the damage..Then like a month later I received another letter telling me they underestimated,now its up to 20% ...This is money that I put into a fund and believed and trusted that it was safe and was making money...14 years later I find out I lost thousands of dollars and no one tells me if I will get it back or what willhappen next...This was money for my daughters college or retirement or whatever I wanted to do with it from breaking my ass for many years in the Carpenters Union....Now gone and it seems no one gives a rats ass...Real nice right????This bastard just destryoyed peoples lives and why cant more be done to recover this money...No matter who I talk to no one knows anything....We call this a free country and a fair and decent country..When the country knew this bastard was operating and did nothing about it...Thanks Alot America for always helping other countrys and not its own...Oh Yeah we have to look good to the rest of the world but screw our own...Shame On YOU...........

[gmw7777]

For those of you who resent Social Security recipients: I worked hard for close to 40 years and paid into Social Security: a lot of dough!! I deserve every penny of it! Work, work, work...pay, pay, pay. What is our bailout amount or "bonus?" $250 dollars!! Wow! We can really go places with that!!!!!

[tincup356]

Funny how the government will go after firms that have hurt RICH people,,,,,But you will never get them to admit that the Social security system is nothing but a ponzi scheme,,,,,,,,,the ones they are paying retirement and disability to...are being paid out of younger workers checks right now,,,,,,,the question is,,,,,,what will happen when unemployment rises so high that social security cannot keep up with the payments going out?,,,,Will they admit then they are robbing the people? I doubt it ,,,they will try to blame it on someone else...probably the people. Our government is FULL of traitors and thieves they are a disgrace to the people of this country,,,BOTH PARTIES.

[whitemale08]

'Execs'? ..of what?

These were a couple of low-life thugs stealing people's money.