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Former Madoff staffers asked to be paid in diamonds, says former exec

Frank DiPascali says two former computer programmers confronted Madoff over the company’s direction

The trial of five former staffers in Bernie Madoff’s Ponzi scheme has been ongoing since October, but recent details show that perhaps not all on trial were as on board with defrauding customers as the top man himself.

Frank DiPascali, Madoff’s former finance chief, testified in court on Dec. 10 that computer programmers Jerome O’Hara and George Perez requested pay in diamonds rather than cash after the two became uncomfortable with the direction of the company. DiPascali testified that the two programmers told him “they didn’t want their fingerprints on this crap any longer.”

Instead of the diamonds, DiPascali said, the two agreed to a “fairly substantial percentage increase” in their salary. DiPascali, who pleaded guilty to charges against him and is testifying in the hopes of a lighter sentence, said, “Where the hell am I gonna get a bag of diamonds?”

Allegedly, this odd request came after a meeting between O’Hara, Perez and Madoff in which the programmers told the head boss about their discomfort with their jobs. DiPascali said the meeting was originally cordial, but Madoff soon turned belligerent.  According to DiPascali, Madoff believed the two had no right to tell him how to run his business and “had no clue how the world operates -- these two dopey computer programmers.”

O’Hara and Perez have both pleaded not guilty to writing computer programs that helped Madoff defraud customers out of millions. Lawyers for the two said the meeting was a “courageous confrontation” and that the programmers didn’t know about the Ponzi scheme. According to their lawyers, O’Hara and Perez only knew their code had the potential to be misused and nothing more.

Meanwhile, according to Bloomberg, prosecutors have accused O’Hara and Perez of extorting Madoff, who paid them more than $100,000 each to keep quiet. A different piece of DiPascali’s testimony aids this interpretation of the programmers’ duties, as he said Madoff took O’Hara and Perez on expensive fishing trips and fancy dinners following the initial conflict’s resolution.


For more on the Bernie Madoff story, check out InsideCounsel’s ongoing coverage:

Trial begins for ex-Madoff employees

Jury selection begins for trial of 5 ex-Madoff employees

Merkin investors must wait for Madoff payout

Madoff trustee’s “bluster” insufficient to block feeder fund settlement

Judge will approve settlement in Madoff feeder fund case

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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