Madoff No.2 Charged With 10 Crimes For Fraud Role

DiPascali faces a maximum sentence of 20 years for several of the crimes with which he is charged.

Bernard Madoff's long-time deputy, Frank DiPascali, was charged with 10 crimes and is expected to plead guilty later on Tuesday in a cooperation deal with investigators for his role in Wall Street's biggest investment fraud.

The charging document, filed in Manhattan federal court just hours before the scheduled plea proceeding, accuses DiPascali, 52, of conspiracy and securities fraud among other crimes. He faces a maximum possible sentence of 20 years on some of the charges.

DiPascali worked for 33 years in the investment advisory arm of Bernard L. Madoff Investment Securities LLC in New York, many of them as chief financial executive, before the 2008 economic decline exposed a fraud of as much as $65 billion.

"The government expects that DiPascali will plead guilty pursuant to a cooperation agreement with the government," said the U.S. Department of Justice website www.usdoj.gov/usao/nys/madoff.html.

Court documents said U.S. prosecutors and his lawyer had proposed a $2.5 million personal recognizance bond and a sentencing date in May 2010.

Only Madoff and the firm's outside accountant, David Friehling, had previously been criminally charged, but law enforcement sources said in June the FBI was investigating 10 or more people associated with the firm who could also be charged.

Madoff, 71, pleaded guilty in March and is in a medium- security prison in Butner, North Carolina, after a judge sentenced him on June 29 to an effective life term of 150 years. The accountant Friehling pleaded not guilty.

Madoff, who swindled large and small investors worldwide over at least 20 years, admitted in a guilty plea in March to having operated a classic Ponzi scheme, a fraud in which early investors are paid with the money of new clients.

Court documents released last Friday said U.S. prosecutors expect DiPascali to plead guilty to "a criminal information," which is an alternative charging document to a grand jury indictment.

Public records show DiPascali has a home in Bridgewater, New Jersey, 42 miles southwest of New York.

At the Madoff firm, he worked with separate staff and Bernard Madoff on the 17th floor of the firm's office at the Manhattan building known as the Lipstick Tower.

The firm's stock traders and other staff worked on the 18th and 19th floors, where they were supervised by Madoff's brother, Peter.

DiPascali faces a maximum possible sentence of 20 years imprisonment on each of the charges of securities fraud, falsifying books and records of a broker dealer, mail fraud, wire fraud and international money laundering.

He faces a maximum possible sentence of five years in prison on each of the charges of conspiracy, investment adviser fraud, falsifying books and records of an investment adviser, perjury and federal income tax evasion.

DiPascali's lawyers said last week they would not comment on the matter.