In addition to their arrests today, two computer programmers who worked for Bernard Madoff were also sued by the SEC for their role in helping Madoff cover up his fraud for more than 15 years. The SEC’s complaint alleges that Jerome O’Hara and George Perez provided the technical support necessary to produce false documents and trading records, and took hush money to help keep the scheme going.
According to the SEC’s complaint, Madoff and his lieutenant, Frank DiPascali, Jr., routinely asked O’Hara and Perez for their help in creating records that combined actual positions and activity from Madoff’s market-making and proprietary trading businesses with the fictional balances maintained in investor accounts. O’Hara and Perez allegedly wrote programs that generated many thousands of pages of fake trade blotters, stock records, Depository Trust Corporation reports and other phantom books and records to substantiate nonexistent trading.
The SEC alleges that O’Hara and Perez had a “crisis of conscience” in 2006 when they confronted Madoff and refused to generate any more fabricated books and records. Madoff allegedly responded by telling DiPascali to offer O’Hara and Perez “as much money as necessary to keep quiet and not expose the misrepresentations.” The SEC alleges that O’Hara and Perez considered the offer and demanded a salary increase of nearly 25 percent along with one-time bonuses in late 2006 of more than $60,000 each.
