Final Madoff Defendant Sentenced To Prison
Nearly 8 years after Bernard Madoff confessed to an FBI agent in his Manhattan apartment that he was running a giant Ponzi scheme, a New York federal judge sentenced the 15th and last remaining defendant to be charged for their role in Madoff's scheme to six months in prison. Irwin Lipkin, the first non-Madoff family member hired at Madoff's Bernard L. Madoff Investment Securities LLC ("BLMIS") in 1964, received a 6-month prison sentence - over the objection of his defense attorneys - for what prosecutors called conduct that was "central" to Madoff's fraud. Lipkin had previously pleaded guilty in 2012 to conspiracy to commit securities fraud and falsify documents and the falsification of documents required by ERISA.
Lipkin was the third employee hired at BLMIS more than 50 years ago in 1964. During his 34-year tenure at BLMIS, Lipkin served as Controller and was responsible for maintaining the internal books and records. In this capacity, Lipkin assisted Madoff with performing internal audits of the securities positions that Madoff purportedly held on behalf of customers. At the direction of Madoff, Lipkin was accused of creating false books and records that were designed to manipulate BLMIS's profit numbers. Lipkin kept these changes in a journal he kept, and when he left BLMIS in 1998, he instructed his successor on how to accomplish these falsifications. Additionally, Lipkin orchestrated sham trades in his person BLMIS trading account to create the appearance of capital losses that allowed Lipkin to retain significant capital gains. Finally, Lipkin arranged for his wife to remain on BLMIS's payroll from 1978 to 2001 despite her failure to perform any services for BLMIS.
Mr. Lipkin is the last defendant to be sentenced in an extraordinary prosecutorial effort to bring to justice all who played a role in Madoff's fraud. This ranged from Madoff's family members to Madoff's secretary to his accountant. Notably, according to a graphic compiled by Reuters, 9 of the 15 defendants were sentenced to a prison term of 2.5 years or less - including six defendants who did not serve any prison time. This extraordinary criminal prosecution has proceeded on a parallel track to an equally-extraordinary effort by the court-appointed trustee for BLMIS, Irving Picard, whose legal team has recovered over $10 billion to compensate a class of Madoff victims who collectively lost an estimated $17 billion. This $10 billion amount does not include an additional $4 billion separately recovered and administered by the government.
A copy of Irwin Lipkin's criminal charging document is below: