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New York • U.S. prosecutors are dropping their bid to boost the prison terms for five former employees of Bernard Madoff who were convicted of aiding his $17.5 billion fraud.
In a notice filed Monday in federal appeals court in New York, the government didn't explain why it was abandoning its effort. The sentences for the group, Madoff's top aides, ranged from 2 1/2 years to 10 years, less than half the time sought by the U.S. government.
When U.S. District Judge Laura Taylor Swain passed sentence in December 2014, prosecutors warned the "merciful" prison terms could hinder justice for victims of Madoff's Ponzi scheme and set a bad precedent for future white-collar prosecutions.
Swain, who oversaw the trial, cited the fundamental responsibility of Madoff, rather than his aides, as a key reason for the shorter prison terms, saying he manipulated loyal employees who lacked proper financial training.
Daniel Bonventre, Madoff's ex-operations chief, was sentenced to 10 years behind bars; Annette Bongiorno, who ran the investment advisory unit at the center of the fraud, and Joann Crupi, who managed investment advisory accounts, each got six-year terms. Computer programmers Jerome O'Hara and George Perez, who automated the scam as it grew rapidly in the 1990s, got 2 1/2 years apiece.
Madoff's New York-based investment-advisory firm spent customer cash on operations and to pay fake profits to investors instead of buying securities. The five defendants used millions of fake trade confirmations and bogus account statements to dupe customers for decades.
The fraud collapsed after Madoff's arrest on Dec. 11, 2008. He was sentenced to 150 years in prison after a guilty plea.
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Keywords: MADOFF-UPDATE1