Lying about financial information was all but a prerequisite to work for Ponzi villain Bernie Madoff.
Former Madoff supervisory trader and admitted fraudster David Kugel told a Manhattan jury on Monday that accounts executive Joann Crupi — one of five ex-Madoff staffers on trial – supplied lenders with false financial information so that Kugel and his two grown children would qualify for five mortgages and other loans at low-interest rates to buy homes worth millions of dollars.
The cooperating government witness testified that Crupi – under Madoff’s direction between 2002 and 2007 — supplied and signed off on the false information supplied to banks and other lenders so that Kugel, his son, Craig, and daughter, Heather, could get loans to buy fancy homes in Boca Raton, Fla., and on Long Island.
For example, Crupi in 2003 drafted and signed her name on documents to lenders claiming Kugel had $6.1 million in hand in his investment advisory account at Madoff Securities – even though he actually had a negative balance of $120,000, Kugel testified.
Kugel also said he always sought Madoff’s blessing before committing mortgage fraud – and each time the con man said “go see” Crupi to get the proper paperwork to pull it off.
Kugel – the government’s first key witness in the trial – testified last week that Crupi and another ex-Madoff staffer on trial, Annette Bongiorno, also helped him commit securities fraud by “fabricating” trades.
Kugel pleaded guilty in November 2011 to creating phony backdated trades beginning in the early 1970s and continuing until Madoff’s empire was busted by the feds in December 2008.
Craig Kugel, who worked in human resources for Madoff, also pleaded guilty to participating in the scheme.