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DiPascali denied bail after guilty plea

The convicted fraud Bernard Madoff's long-time deputy, Frank DiPascali, has pleaded guilty to financial crimes.

NEW YORK // The convicted fraud Bernard Madoff's long-time deputy, Frank DiPascali, has pleaded guilty to financial crimes including helping others carry out Wall Street's biggest investment fraud, but shed little light on the decades-long swindle. "I'm standing here today to tell you that from the early 1990s to 2008, I helped Bernie Madoff and other people carry out a fraud that hurt thousands of people. I am guilty," Mr DiPascali, 52, said in Manhattan federal court on Tuesday, reading from a prepared statement.

The US district judge Richard Sullivan denied Mr DiPascali bail. He was handcuffed and escorted from court after pleading guilty under a co-operation deal with the government. Mr DiPascali only identified the disgraced financier, who is in a medium-security prison in Butner, North Carolina, after a judge sentenced him on June 29 to 150 years. Madoff, 71, pleaded guilty in March to orchestrating a worldwide US$65 billion (Dh238.74bn) Ponzi scheme over 20 years in which early investors were paid with the money of new clients. Madoff said he acted alone in the fraud at Bernard L Madoff Investment Securities in New York.

He was arrested by the FBI in December after the number of redemption requests in the declining economy were more than he was able to pay. Mr DiPascali pleaded guilty to 10 charges including conspiracy, securities fraud, money laundering and perjury. He faces a maximum possible sentence of 20 years each on some of the charges. Sentencing was scheduled for May 15. "I'm not persuaded he will be here at the time of sentencing, given the monumental sentence he's facing," Judge Sullivan said.

Mr DiPascali's lawyer, Marc Mukasey, and the US prosecutor Marc Litt objected, saying his co-operation was essential to finding out more about the huge fraud and his freedom would help their work. Mr DiPascali, who worked for Madoff for 33 years from the age of 18, appeared stunned at the judge's ruling at the end of the two-hour long court hearing. He told the court he had recorded securities trades for clients that were "all fictitious" and that in January 2006, "under Bernie Madoff's direction, I lied to the SEC [the US Securities and Exchange Commission] about the activities of the firm".

Mr DiPascali admitted wiring money from the Madoff firm's London office to New York and falsifying trading tickets. "I don't know how I went from being an 18-year-old kid who didn't have a job to standing here in the court today," he said, his voice breaking with emotion. "I didn't know anything about Wall Street." Public records show Mr DiPascali has a home in Bridgewater, New Jersey, about 67km south-west of New York.

At the firm, he worked with a separate staff and Madoff on the 17th floor of the firm's office at the Manhattan building known as the Lipstick Tower. The firm's stock traders and other staff worked on the 18th and 19th floors, where they were supervised by Madoff's brother, Peter. Only Madoff, Mr DiPascali and the firm's outside accountant, David Friehling, have been charged in the fraud, but law enforcement sources have said the FBI was investigating 10 or more people who could be charged in coming months.

"I don't believe the quest for the truth ends today," Judge Sullivan said after a defrauded investor, Miriam Siegman, asked him to reject the plea deal. "Before imposing sentence I would expect to have more information than I have heard today." Also on Tuesday, the SEC filed civil charges against Mr DiPascali, accusing him of creating millions of phoney documents and tracking records to conceal fraud from regulators and investors.

The SEC said he had helped Madoff conceal the fraud by designing, developing and overseeing a wide array of fictitious books and records. * Reuters