Madoff Payroll Manager Pleads Guilty to Bank Fraud, Other Charges

Monday, 06 Jun 2011 12:44 PM

 

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An employee who has been singled out as a member of Bernard Madoff's "inner circle" pleaded guilty on Monday to helping the Ponzi swindler cook the books.

Eric Lipkin, a second-generation Madoff employee who worked at his secretive investment advisory business for 16 years, pleaded guilty to conspiracy, bank fraud and falsifying financial records in a cooperation agreement with prosecutors.

In a civil lawsuit filed last year, the court-appointed trustee trying to unwind Madoff's fraud labeled Lipkin a member of the schemer's "inner circle" who profited handsomely from the fraud and was an active part of attempts to cover it up.

Lipkin's father, Irwin, was one of the first people hired by Madoff when he started his investment business, and was one of the key workers who began building the firm from scratch in 1964, according to the lawsuit. Eric Lipkin followed his father into the company in 1992 and acted as a "lieutenant" to Madoff, as well as the company's payroll manager.

Court trustee Irving Picard accused both father and son of being aware of the Ponzi, or pyramid, scheme and helping to conceal it, all while pocketing about $9.2 million in customer money through fictitious stock trades.

When the Securities and Exchange Commission briefly probed Madoff's operation in 2005 and 2006, Eric Lipkin threw investigators off the trail by giving them bogus information and fabricating trade blotters, the lawsuit said.

Madoff, 73, is serving a 150-year prison term after pleading guilty in 2009. At the time, he claimed he acted alone.

Lipkin, who lives in Ridgewood, New Jersey, is the third person who worked for Madoff to plead guilty to a crime. Madoff's independent auditor and his long-time deputy have both previously admitted wrongdoing. Five other people who worked for the firm have been charged but pleaded not guilty.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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