Frank DiPascali Jr. (October 28, 1956 – May 7, 2015) was an American fraudster and financier who was a key lieutenant of

Bernie Madoff Bernard Lawrence Madoff ( ; April 29, 1938April 14, 2021) was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion. He was at one time ...

for three decades. He referred to himself as the company's "director of options trading" and as "

chief financial officer A chief financial officer (CFO) is an officer of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its finances; i.a.: financial planning, management of financial risks, ...

". For a number of years, he played a key part in the daily operation of the

Madoff investment scandal The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities ...

, later recounting how he helped manipulate billions of dollars in account statements so clients would believe that they were creating wealth for them. On August 11, 2009, he pleaded guilty to ten counts related to the fraud. He subsequently admitted that he had known for at least two decades that Madoff had turned his investment advisory business into a massive

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays Profit (accounting), profits to earlier investors with Funding, funds from more recent investors. Named after Italians, Italian confidence artist Charles Ponzi, this type of s ...

. He was denied bail before sentencing and spent ten months in jail before being released. He died of

lung cancer Lung cancer, also known as lung carcinoma, is a malignant tumor that begins in the lung. Lung cancer is caused by genetic damage to the DNA of cells in the airways, often caused by cigarette smoking or inhaling damaging chemicals. Damaged ...

in 2015 while awaiting sentencing.

Personal life

DiPascali grew up next door to Annette Bongiorno, Madoff's longtime assistant, in

Queens Queens is the largest by area of the Boroughs of New York City, five boroughs of New York City, coextensive with Queens County, in the U.S. state of New York (state), New York. Located near the western end of Long Island, it is bordered by the ...

Howard Beach Howard Beach is a neighborhood in the southwestern portion of the New York City Borough (New York City), borough of Queens. It is bordered to the north by the Belt Parkway and Conduit Avenue in Ozone Park, Queens, Ozone Park, to the south by J ...

neighborhood. She recruited him to work for Madoff. DiPascali graduated from

Archbishop Molloy High School Archbishop Molloy High School (also called Molloy, Archbishop Molloy, or AMHS) is a four-year private, college preparatory, Catholic school for grades 9–12, located on on 83-53 Manton Street, Briarwood, Queens, New York. It is part of the D ...

, New York, in 1974, and joined Madoff's firm in 1975, ultimately rising to be CFO. According to him, he was enrolled at St. John's University and

Brooklyn College Brooklyn College is a public university in Brooklyn in New York City, United States. It is part of the City University of New York system and enrolls nearly 14,000 students on a campus in the Midwood and Flatbush sections of Brooklyn as of fall ...

. DiPascali and his wife, JoAnne, lived in a five-bedroom house, with a pool, on seven acres in

Bridgewater Township, New Jersey Bridgewater Township is a Township (New Jersey), township in Somerset County, New Jersey, Somerset County in the U.S. state of New Jersey, located within the heart of the Raritan River, Raritan Valley region. Situated within Central Jersey, Cen ...

, assessed at $1.38 million. They had three black Mercedes and an 18.5-meter (61-foot) Viking yacht, registered to Dorothy-Jo Sportfishing LLC. DiPascali's brother-in-law, Robert Cardile, bought his former house in Bridgewater for $400,000. Cardile began working for Madoff in 1985, and responded to phone inquiries for DiPascali. In January 2005, a tax lien of $77,479 by the

IRS The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...

for the 1996 tax year was paid by DiPascali three months later. In 2000,

New Jersey New Jersey is a U.S. state, state located in both the Mid-Atlantic States, Mid-Atlantic and Northeastern United States, Northeastern regions of the United States. Located at the geographic hub of the urban area, heavily urbanized Northeas ...

unpaid taxes of $72,943 were paid. In 1993, New York State Tax Commission filed an action for $21,685, which was also paid. DiPascali died from

on May 7, 2015, at the age of 58, while awaiting sentencing. Financial journalist and Madoff biographer Erin Arvedlund describes DiPascali as an abrasive man who padded his resume.

Career

DiPascali started at Madoff's investment-advisory business at age 18 in 1975, and eventually oversaw the company's day-to-day operations. He became the director of options in 1986, and CFO in 1996. He also claims to have been a director of Madoff Securities International Limited in London, but Companies House (the UK registrar of companies) has no record of him ever being appointed as a director of the company. He was the person many of Madoff's investors dealt with regarding their accounts. Madoff told investors DiPascali executed trades. However, a court-appointed trustee found that no trading had occurred for at least 13 years. Prosecutors have asked at least three employees, Eric Lipkin, JoAnn Crupi, and Robert Cardile, DiPascali's brother-in-law, about his role in the firm. Investors spoke to these other employees and would fax orders if they needed to withdraw money. DiPascali's name was sometimes given as an alternate contact. DiPascali told investigators that on December 3, 2008, Madoff told him that he was finished. By then, due to a wave of redemption requests from skittish investors during the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

, Madoff's business account at

JPMorganChase JPMorgan Chase & Co. (stylized as JPMorganChase) is an American multinational financial services, finance corporation headquartered in New York City and incorporated in Delaware. It is List of largest banks in the United States, the largest ba ...

was down to only $234 million–not even a fraction of what he needed to pay off outstanding redemptions. By this time, banks had all but stopped lending, and Madoff knew he could not hope to borrow enough money to meet that month's upcoming redemptions. He directed DiPascali to use the remaining balance to cash out the accounts of relatives and favored investors. When Madoff's sons told their lawyers about these checks, their lawyers told them to contact federal prosecutors and the SEC right away, setting the stage for Madoff's arrest on December 11.

Criminal and civil complaints and guilty plea

According to an SEC memo, DiPascali "responded evasively" to questioning following Madoff's arrest. DiPascali pleaded guilty on August 11, 2009, before federal judge Richard J. Sullivan to 10 federal criminal charges:

conspiracy A conspiracy, also known as a plot, ploy, or scheme, is a secret plan or agreement between people (called conspirers or conspirators) for an unlawful or harmful purpose, such as murder, treason, or corruption, especially with a political motivat ...

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

mail fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...

, wire fraud,

perjury Perjury (also known as forswearing) is the intentional act of swearing a false oath or falsifying an affirmation to tell the truth, whether spoken or in writing, concerning matters material to an official proceeding."Perjury The act or an insta ...

income tax evasion Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduc ...

, international

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

, falsifying books and records of a

broker-dealer In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...

, and falsifying books and records of an

investment advisor A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...

. In his allocution, he admitted that he had known for at least two decades that Madoff's investment advisory business was fraudulent; he had discovered at some point in the late 1980s or early 1990s that there was no actual trading occurring in Madoff's investment-advisory client accounts. About 2002, he set up an account for himself at the firm named after his fishing yacht, Dorothy Jo. Having never made a contribution, he withdrew more than $5 million. His salary and bonuses were over $2 million annually. He recounted how he, Madoff, and "other people" manipulated account statements, leading clients to believe that they were creating wealth for them. "No purchases or sales of securities were actually taking place in their accounts. It was all fake. It was all fictitious. It was wrong, and I knew it was wrong at the time." He had agreed to connect the dots and to name names while sentencing was anticipated in May 2010. He faced a maximum sentence of 125 years in federal prison. Prosecutors sought more than $170 billion in forfeiture, the same amount sought from Madoff, which represented funds deposited by investors and later disbursed to other investors. The same day, a

Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

civil complaint was filed against DiPascali. Prosecutors sought bail for DiPascali, but Sullivan remanded him to custody, saying he was a potential flight risk. At a bail hearing on October 28, 2009, Sullivan deferred a decision pending more information, though he added that he still had reason to believe DiPascali might flee to avoid the prospect of dying in prison. One of Madoff's victims, Laurence Leif, objected to bail, claiming it would only serve to further "torment" the victims. In February 2010, Sullivan approved a bail package that required DiPascali to post $10 million bond secured by nine friends and relatives. DiPascali was finally able to post bond on June 22, 2010; he was then released on house arrest and required to wear an ankle monitor. He was represented by attorney Marc Mukasey, a son of former U.S. Attorney General

Michael Mukasey Michael Bernard Mukasey (; born July 28, 1941) is an American lawyer and jurist who served as the 81st Attorney General of the United States from 2007 to 2009 and as a U.S. district judge of the U.S. District Court for the Southern District of N ...

. Mukasey said that while DiPascali was indeed guilty, he had long believed that Madoff would be able to repay his clients. DiPascali's sentencing was delayed for almost six years while he cooperated with prosecutors. With his help, prosecutors were able to reconstruct the details of the massive fraud, recover billions of dollars in assets, and convict 15 others involved in the scandal. Notably, he was the star witness when Bongiorno and four others stood trial for knowingly helping Madoff and profiting from the Ponzi scheme.

In the media

* DiPascali was portrayed by

Michael Rispoli Michael Rispoli (born November 27, 1960) is an American character actor. He was a contender for the role of Tony Soprano in the HBO television series ''The Sopranos,'' but was ultimately cast as Jackie Aprile Sr., Jackie Aprile, a recurring ch ...

in the 2016

ABC ABC are the first three letters of the Latin script. ABC or abc may also refer to: Arts, entertainment and media Broadcasting * Aliw Broadcasting Corporation, Philippine broadcast company * American Broadcasting Company, a commercial American ...

miniseries '' Madoff''. * He was portrayed by

Hank Azaria Henry Albert Azaria ( ; born April 25, 1964) is an American actor and producer. He is known for voicing many characters in the long-running animated sitcom ''The Simpsons'' since 1989, including Moe Szyslak, Chief Wiggum, Superintendent Chalmer ...

in the May 2017

HBO Home Box Office (HBO) is an American pay television service, which is the flagship property of namesake parent-subsidiary Home Box Office, Inc., itself a unit owned by Warner Bros. Discovery. The overall Home Box Office business unit is based a ...

film '' The Wizard of Lies'', based on the best-selling book by Diana B. Henriques.

References

External links

Frank DiPascali DOJ Information/Plea Agreement
(August, 2009) {{DEFAULTSORT:Dipascali, Frank 2008 in economic history 2015 deaths American people convicted of tax crimes American people convicted of money laundering American white-collar criminals American chief financial officers American confidence tricksters People associated with the Madoff investment scandal Pyramid and Ponzi schemes People from Bridgewater Township, New Jersey People from Howard Beach, Queens Place of death missing American people convicted of fraud 1956 births American people convicted of perjury American businesspeople convicted of crimes Archbishop Molloy High School alumni Deaths from lung cancer in New York (state) Prisoners and detainees of the United States federal government