The first non-Madoff employed at Bernard Madoff's brokerage firm pled guilty to aiding and abetting Madoff's $65 billion Ponzi scheme for more than two decades. Irwin lipkin, the former controller of Bernard L. Madoff Investment Services ("BLMIS") and the third employee after Madoff and his wife, entered a guilty plea to several fraud charges including conspiracy to commit securities fraud, to falsify records, and to make false filings with the SEC. Pursuant to his plea agreement with authorities, Lipkin, 74, faces up to ten years in federal prison.
Lipkin was hired in 1964 as the first non-Madoff at BLMIS, and participated in maintaining the firm's financials in his job as Controller, as well as assisting Madoff in performing internal audits of the securities positions held by BLMIS. Along with several other Madoff employees, Lipkin maintained the BLMIS General Ledger and Stock Record. Beginning in the 1970's, Lipkin falsified entries in the General Ledger designed to manipulate the purported profits and losses realized by BLMIS, and were done at Madoff's behest. Additionally, in connection with audits by the Internal Revenue Service ("IRS"), Lipkin and others backdated the General Ledger and other supporting documents to appear consistent with representations made to the IRS. After his retirement, Lipkin also instructed other Madoff employees how to continue his duties to perpetuate the fraud.
According to authorities, Lipkin also arranged for his wife to receive a regular paycheck from BLMIS despite the fact that she did not work at BLMIS or provide any services on its behalf. Even though Lipkin retired in 1998, he continued to receive a salary and benefits until the scheme was uncovered in December 2008.
As part of his restitution agreement, Lipkin has agreed to forfeit $170 billion, which includes all real and personal property owned. He is scheduled to be sentenced on March 13, 2013.
A copy of the criminal charging document against Lipkin is here.