Frank DiPascali

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

He referred to himself as the company's "director of options trading" and as "chief financial officer".

For a number of years, he played a key part in the daily operation of the Madoff investment scandal, later recounting how he helped manipulate billions of dollars in account statements so clients would believe that they were creating wealth for them.

DiPascali graduated from Archbishop Molloy High School in Queens, 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.

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

DiPascali started at Madoff's investment-advisory business at age 18 in 1975, and eventually oversaw the company's day-to-day operations.

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.

Cardile began working for Madoff in 1985, and responded to phone inquiries for DiPascali.

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.

In 1993, New York State Tax Commission filed an action for $21,685, which was also paid.

In 2000, New Jersey unpaid taxes of $72,943 were paid.

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.

In January 2005, a tax lien of $77,479 by the IRS for the 1996 tax year was paid by DiPascali three months later.

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 in the wake of the financial crisis, Madoff's business account at JPMorganChase 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.

According to an SEC memo, DiPascali "responded evasively" to questioning following Madoff's arrest.

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.

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

DiPascali pleaded guilty on August 11, 2009 before federal judge Richard J. Sullivan to 10 federal criminal charges: conspiracy, securities fraud, investment advisor fraud, mail fraud, wire fraud, perjury, income tax evasion, international money laundering, falsifying books and records of a broker-dealer, and falsifying books and records of an investment advisor.

He died of lung cancer in 2015 while awaiting sentencing.

DiPascali grew up next door to Annette Bongiorno, Madoff's longtime assistant, in Queens' Howard Beach neighborhood.

She recruited him to work for Madoff.

DiPascali died from lung cancer 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.