Friday, December 23, 2011

SEC Charges Longtime Madoff Employee with Falsifying Documents to Deceive Regulators

The SEC charged a longtime Bernie Madoff employee with falsifying books and records in order to hide Madoff’s fraudulent investment advisory operations from regulators.

The SEC alleges that the employee, who worked at Bernard L. Madoff Investment Securities LLC (BMIS) for more than 30 years, assisted in falsifying BMIS’s internal accounting records in order to misclassify hundreds of millions of dollars of income purportedly generated by BMIS’s investment advisory operations. The employee also falsified financial statements filed with the SEC and other regulators, as well as materials that were prepared to deceive SEC staff examiners, federal and state tax auditors, and other external reviewers.

“To keep his massive fraud alive, Madoff had to hide as many facts about his advisory operations as possible,” said George S. Canellos, Director of the SEC’s New York Regional Office. “Cotellessa-Pitz along with other senior BMIS personnel played a critical role in this effort by creating false documents to deceive federal and state regulators.”

The SEC previously charged BMI's Director of Operations with falsifying books and records to hide and obfuscate Madoff’s advisory operations. According to the SEC’s complaint against the employee, she played a central role in falsifying these records as directed by Madoff and the Director of Operations. Madoff used the false records to artificially improve the firm’s reported revenue and income as well as to deceive regulators who sought to review the firm’s operations and financial results.


SEC Charges Longtime Madoff Employee with Falsifying Documents to Deceive Regulators
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