Suzie-Que's Truth and Justice Blog

FBI steps up search for evidence in Bernard (Bernie) Madoff scandal

Suzy Jagger in New York

The FBI is understood to be monitoring key individuals connected to the $50 billion (£34 billion) Bernard Madoff investment scandal as the federal agency comes under increased pressure to construct a criminal case against the 70-year-old financier.

The agency is scrutinising bank withdrawals made by former employees of Mr Madoff and their personal activities, including where they travel and with whom they mix. The use of such methods came to light as it emerged that Frank Dipascali, Mr Madoff’s chief financial officer, has been interviewed by investigators over his role at Madoff Investment Securities. Marc Mukasey, Mr Dipascali’s lawyer, failed to return calls yesterday.

As regulators scour documents seized from Mr Madoff’s offices in Manhattan, the financier is under pressure to meet tomorrow’s deadline to provide details of all investments, assets, loans, lines of credit and accounts held by his company to the US Securities and Exchange Commission (SEC).

Under the terms of a court order issued by Louis Stanton, a US district judge, on December 18, Mr Madoff must supply the lists by New Year’s Eve and must include all assets held by the financier for his “direct or indirect benefit”. Mr Madoff’s foreign operations – such as the now-closed office off Berkeley Square in Central London – have until January 26 to hand over their own lists.

Ira Lee Sorkin, Mr Madoff’s lawyer,refused to be drawn yesterday on whether Mr Dipascali was assisting Mr Madoff with his audit tasks or whether Mr Madoff’s sons, Mark and Andrew, who claim to be victims of the alleged fraud, are helping their father with the audit. Mr Sorkin did say that under his bail terms Mr Madoff, who is being held under house arrest at his flat on East 64th Street in the Upper East Side area of Manhattan, is allowed to have visitors outside members of his close family.

The SEC is already expecting documents from Friehling & Horowitz, the three-man accounting firm that audited Mr Madoff’s accounts, after a New York court issued a subpoena requesting information.

Once Mr Madoff submits his asset lists, the SEC will begin to review the completeness of the data. It is believed that regulators are unsympathetic to claims that many documents detailing the firm’s assets are in the hands of the authorities. The FBI failed to return calls yesterday.