Frank DiPascali, the Madoff employee often referreed to as the lieutenant is negotating a plea deal, Fortune reports. In exchange for a reduced sentence, DiPascali is offering up his encyclopedic knowledge of the fraud — how it was done, who was involved, etc.
But here’s the big shocker: Apparently DiPascali has no evidence that other family members were involved in the fraud. Many has assumed that the sons and possibly the wife were the most likely to get into trouble next. Indeed some family members have been taking prison courses to get ready for that possibility. But it says something that DiPascali isn’t able to implicate them.
Apparently he can’t implicate Fairfield Greenwich in the fraud either, which is good news for them, though they don’t have to be directly complicit in it to be in a whole world of legal trouble for their lack of due diligence.
Who can he implicate? Certain Madoff feeders including Frank Avellino. Apparently some investors used Madoff as a tax shelter. So that when they had gains elsewhere, DiPascali would produce a phony return showing a loss so as to cancel that out.