The final player in the massive Bernie Madoff fraud case has been sentenced to prison for his role in helping to conceal Madoff’s scheme.
The former controller at Bernard L. Madoff Investment Securities LLC, Irwin Lipkin, has been ordered to serve six months in prison after he pled guilty to one count of conspiracy to commit securities fraud and one count of falsifying documents. Lipkin was sentenced in Manhattan federal court by U.S. district judge Laura Taylor Swain on August 5, although his plea was entered in 2012.
According to court filings, Lipkin began working for Madoff in 1964 and was the first person outside Madoff’s family to be hired into the firm. As the firm’s controller, he helped maintain its books and records since at least the mid-1970s.
Those records were false and misleading, as they were based on the false trading activity reported by Madoff. “These filings helped Mr. Madoff run the Ponzi scheme that harmed thousands of people,” Lipkin admitted in his plea.
When Lipkin retired from the firm in 1998, he taught his successor how to manipulate the firm’s revenue numbers to reach particular results, thereby allowing the fraud to continue. He also engaged in fake trades and arranged no-show jobs for himself and his wife at the firm.
In addition to the prison term, Lipkin, 77, was ordered to serve three years of supervised release, including 18 months of home confinement. He also was ordered to forfeit US$170 billion — representing the funds invested with Madoff while Lipkin was part of the conspiracy — and various properties, including a house in Florida, stocks from brokerage and retirement accounts, and artwork.
The sentence was announced by Preet Bharara, U.S. attorney for the Southern District of New York. “Bernard Madoff did not commit his massive fraud alone,” Bharara said. “Irwin Lipkin, hired in the 1960s as BLMIS’s third employee, right after Madoff and Madoff’s wife, was among Madoff’s most loyal accomplices. Year after year, Lipkin helped keep Madoff’s house of cards from collapsing, falsifying the very financial records that Lipkin, as the controller, was supposed to monitor.
“In exchange,” Bharara continued, “Lipkin reaped the rewards of fake trades and no-show jobs for himself and his family. Lipkin’s sentencing — the last among the 15 defendants convicted for their participation in Madoff’s fraud — marks the close of another chapter in this tragic tale of unchecked greed.”