June 21, 2011 file photo shows Daniel Bonventre leaving Manhattan federal court, in New York
(Photo: Louis Lanzano - AP)
NEW YORK (USATODAY.com) - Five former employees of Ponzi scheme mastermind Bernard Madoff face criminal forfeiture of hundreds of millions of dollars in assets linked to the alleged scam if convicted in their federal conspiracy and fraud trial.
Prosecutors and defense lawyers agreed Thursday that federal courts, not the trial jury, will decide on government legal motions to seize luxury homes, bank accounts and other assets held by the employees and their families.
The trial is expected to end this month against Daniel Bonventre, Madoff's former operations manager; Annette Bongiorno, the disgraced financier's longtime assistant; JoAnn Crupi, an ex-account manager; and former Madoff computer programmers Jerome O'Hara and George Perez.
They are charged with knowingly participating in and profiting from a decades-long fraud in which Madoff stole as much as $20 billion from thousands ofaverage investors, charities, celebrities, financial funds and other victims. The five have contended they're also victims because the disgraced financier hid the fraud from them.
The superseding indictment filed last year in Manhattan federal court signaled the government's plans to seek "all property, real and personal" that "constitutes or is derived from " the alleged fraud. Prosecutors will pursue anyone who got assets from the five via transfers or sales, the indictment shows.
The former co-workers also face civil forfeiture actions, plus separate civil cases filed by the Securities and Exchange Commission. They've argued in court filings that the forfeiture actions and freezes imposed on bank accounts and other funds have made it difficult for them to pay their chosen defense attorneys.
Federal court records show the five have many assets at stake, though some of the real estate in question is mortgaged.
Prosecutors plan to seek an ocean-front vacation home that Bonventre bought for $2,550,000 just days before the scam collapsed in December 2008 with Madoff's arrest. Madoff pleaded guilty without standing trial and is now serving a 150-year prison term.
The government has also signaled plans to take Bonventre's co-operative apartment in East River House, a luxury high-rise on Manhattan's Upper East side, along with millions of dollars in financial accounts and retirement funds.
Prosecutors plan to seek the $862,000 lakeside vacation home that Bongiorno and her husband, Rudy, bought in Boca Raton, Fla., through a 1995 sale. Also among the potential forfeiture targets is the nearly $1.4 million home the couple bought in a gated community near Long Island's north shore.
Federal marshals have already seized a gray Bentley auto the Bongiornos bought for approximately $180,000 in cash. Also seized was a Mercedes-Benz SUV, for which they paid roughly $90,000, and another Mercedes for which they paid nearly $65,000.
"What Bernie didn't take, they took," Bongiorno testified last week, referring to the marshals.
The scam implosion and criminal case aborted the couple's plans to sell the Florida and New York homes and downsize to somewhat smaller units, Bongiorno testified.
She said they had planned to buy another Boca Raton condo that cost $6.5 million, explaining that the new unit would have been "smaller than my house."
Court records show Crupi faces potential loss of her primary residence, a Westfield, N.J., single-family home she and a partner bought in 1997 for $412,000. Prosecutors also plan to seek forfeiture of a $2.2 million vacation home that Crupi bought in May 2008.