Another Former Madoff Employee Pleads Guilty to Fraud
By: Abiman Rajadurai
Eric Lipkin, a longtime employee at Bernard L. Madoff Investment Securities LLC, pled guilty yesterday to six counts of falsifying books and conspiracy in federal court. Lipkin, the ninth person to be charged with involvement in the Ponzi Scheme run by Bernard Madoff, was charged by the Securities and Exchange Commission (“SEC”) with violating numerous sections of the Securities Act of 1993, Securities Exchange Act of 1934, and the Investment Advisors Act of 1940.
The SEC alleged that Lipkin contributed to the Ponzi scheme by, among other things, falsifying records of investors account holdings and preparing fake Depository Trust Clearing Corporation (DTCC) reports. The SEC also claimed that Lipkin received compensation from the Madoff firm for his deceptive practices and even from Madoff personally. The SEC identified that Lipkin received (but never paid back) $720,000 from Madoff to purchase a home.
Lipkin admitted to District Court Judge Laura Taylor Swain that since 1986, he not only created false payroll recordsbut also knowingly sent false reports to the DTCC. Lipkin’s plea agreementrequires him to cooperate with federal investigators and to forfeit over $1 million and other assets to compensate victims of the Ponzi scheme.
In pleading guilty, Lipkin joins former Madoff accountant David Friehling in admitting guilt relating to the fraudulent scheme orchestrated by Madoff and for which Madoff was ultimately sentenced to serve 150 years in prison. While Lipkin has pled guilty, five other former Madoff employees have pled not guilty to charges stemming from their alleged roles in the scheme and await trial before Judge Swain.
Case: Securities and Exchange Commission v. Lipkin, 1:11-cv-03826-LTS10-CR-228 (S.D.N.Y. 2011).
