Yesterday, a trader who worked for Bernard Madoff for four decades pleaded guilty to fraud charges related to the multi-billion dollar Ponzi scheme. David Kugel said, "I am deeply sorry for my actions and the harm suffered by the victims."
When Madoff was arrested in December 2008 (his sons called the federal authorities after he confessed the Ponzi scheme to them), he claimed he carried out the scam by himself. But Kugel admitted he helped Madoff since the early 1970s. According to the Wall Street Journal, "Kugel, 66 years old, said he supplied Madoff back-office employees Annette Bongiorno and JoAnn 'Jodi' Crupi with pricing data that was used to create fake, backdated trades for Madoff customers, including historical pricing information taken from the newspaper. Some of the data he provided replicated successful trades made by the Madoff firm's proprietary trading operations, Mr. Kugel said."
The SEC says that Kugel withdrew $10 million in fake profits from Madoff Investments, while making $588,000/year in his final years with the firm. The trustee in charge of retrieving money for Madoff victims wants $22 million from Kugel and his family.
Madoff is currently serving a 150-year federal prison sentence. His sons, who worked at the firm, have claimed they had no idea about the fraud, though other employees have pleaded guilty. Madoff himself understands why clients hate him.
