Almost as soon as Bernie Madoff's massive fraud was revealed two years ago, authorities moved to gain the cooperation of someone they felt was a linchpin in the operation: Annette Argese Bongiorno, the short, fat, now 62-year-old executive assistant who had served the Ponzi King for 40 years.
Yet Bongiorno has remained steadfastly defiant and resistant to offers from the prosecutors, even as other Madoff lieutenants have cut deals with the government. Tomorrow, her defiance may send her straight to jail.
Facing 75 years, an air of unreality surrounds Bongiorno's antagonistic behavior. For most of the past two years, she rejected entreaties from prosecutors because she apparently did not understand—as her former Queens neighbor, Madoff operations chief Frank DiPascali did— that no one close to Bernie would ever get better than a reduced prison term.
Instead, until the government succeeded in getting a partial forfeiture order last summer, Bongiorno and her husband swanned around South Florida in her Bentley or the couple's his-and-hers Mercedes Benz sedans, angering authorities.
And, at least until last week, Bongiorno may have thought that somehow she was going be able to keep some of the $14 million she collected while employed on the dark side of Bernie's operation. That fantasy was shattered when prosecutors demanded her immediate imprisonment because she remains more than $2 million short of posting a $5 million bail.
This failure to post bail has evolved into a circus sideshow involving the government's hunt for $2.4 million in Annette's bank accounts and perhaps millions of dollars more she shifted to her husband Rudy, who retired on full disability as a New York City transportation department electrician more than a decade ago. Unless she submits a list of all the couple's liquid assets to U.S. District Judge Laura Taylor Swain by late today, she will almost certainly be put under arrest by federal marshals by 4 p.m. tomorrow at her $1.25 million home in a Boca Raton, Fla. country club development. At this point, says her attorney, Maurice Sercarz, Bongiorno is electing to take her chances in a criminal trial—"the government is offering her the equivalent of life in prison"—although she knows her old pal DiPascali will be a star witness against her.
"This case has been portrayed as being all black and white and my client is wearing a black hat," Sercarz tells The Daily Beast. "I have got to change that perception and I am more concerned about that than the millions of documents that the government has."
Until last week, Bongiorno may have thought that somehow she was going be able to keep some of the $14 million she collected while employed on the dark side of Bernie's operation.
Those documents—covered with Annette's fingerprints and handwriting—tell the intriguing story that starts shortly after she graduated from John Adams High School in Ozone Park, Queens, N.Y in July 1968.
"Annette was hired (by Bernie) at a very young age and knew nothing about the stock market," Sercarz says. "She had nothing to compare it with either."
• Allan Dodds Frank: Payday for Madoff Victims Soon, authorities say, she was recruiting investors, falsifying documents and working hard to keep Madoff investors happy—and in the dark. Bongiorno fended off questions to Bernie from investors who telephoned, sent them checks and assured them their investments with Bernie were safe and sound. From the firm's secretive 17th floor, authorities say, she was cooking up their account statements with fake securities and stock trades at Madoff's direction.
She was so trusted by Madoff, according to prosecutors, that she prepared the statements peppered with fake stock trades for company executives, Madoff family accounts and hundreds of other investors. Prosecutors believe Bongiorno also prepared the "documentation" for the Madoff family accounts and moved cash for them. If they could crack her, she could be a star witness against Bernie's sons, brother and niece.
The defense has sought to portray Bongiorno, who began working part time 15 years ago, as an unwitting victim of Bernie's who years ago handed off many of her duties to her assistant—the equally unwitting JoAnn "Jodi" Crupi.
The government does not see it that way—and has charged Crupi as a co-defendant in the conspiracy.
Over the years, Bongiorno's falsifications grew more sophisticated, say authorities. Constantly using a Bloomberg terminal to check information on real trades in various big name stocks, they allege, Bongiorno constructed fake transactions to create back-dated documents that generated false profits—or around tax time—losses.
For someone who started with no knowledge of the market, she apparently took to her graduate studies at the College of Bernie, especially when it came to divining the stock market—with hindsight. According to the indictment, in June 2002, after WorldCom stock dropped 87 percent in five months on news about possible fraud by WorldCom CEO Bernard Ebbers, Bongiorno fabricated a "short trade " in the stock for her account. Such "foresight" allegedly produced a $1.037 million "profit" in her account.
Overall, while working for Madoff, authorities traced more than $14 million going into the pockets of herself and her husband.
Accordingly, Sercarz and his partner, Roland Riopelle, have had their hands full keeping her out of the clink. Last month, Bongiorno spent four nights in jail in West Palm Beach, Florida after failing to post the $5 million bail set by a federal magistrate. The defense succeeded in getting a court order springing Bongiorno from jail to allow her to try to raise bail money.
"She was frightened by fear of the unknown," says Sercarz of his client, who is under five feet tall, overweight and suffers from high cholesterol, high blood pressure and stress. "She is a Madoff defendant and you do not know how the other inmates are going to react to that. "
After that brief taste of life behind bars, Annette wants to remain at home for Christmas and New Year's—and until her trial is over. She has asked to remain under house arrest while wearing an electronic ankle bracelet monitor at her $1.25 million home (Casa di Bongiorno) in the Woodfield Country Club development in Boca Raton, Fla. or at her $2.6 million mansion in Manhasset, on Long Island.
After two hearings in New York last week that were at times comic, Judge Swain fashioned a compromise. The prosecutors agreed to delay until 4 p.m. tomorrow the move to remand Bongiorno to prison for failure to post $5 million bail as long as she discloses to the judge, in private, where she and her husband have all their dough stashed. They already have told the government that Annette has at least $2.4 million in an undisclosed bank. (As Judge Swain noted last week: "$2.4 million can take a person a long way in the United States, Canada, Mexico and across the Canal Zone.")
The compromise was necessary because prosecutors say they will move to seize any bank accounts or other assets Bongiorno and her husband identify.
Assistant U.S. Attorneys Julian Moore and Lisa Baroni repeatedly have told the court that Bongiorno and her husband are "constantly moving their money around" and "there could be millions more out there."
Sercarz and Riopelle countered that their client has been opening new accounts in her own name only because some banks have been closing her accounts as a result of the notoriety of the case. "If they know where the accounts are, why the hell don't they restrain them already," Sercarz says. "They would be making our bail application much stronger. If my client was rendered penniless, you would know she does not have the money to flee."
The defense team has also asked Judge Swain to assure them that if the Bongiornos turned over "every liquid asset they have" Annette could count on having the bail demand reduced to $3 million, a number she may be able to meet. The judge said she remains open-minded. Citing Bongiorno's fear of flying, the defense also asked if Bongiorno could wear an ankle bracelet while driving in a car equipped with a Global Positioning Satellite locator from Florida to New York, rather than being transported by federal marshals by air.
Finally, the defense team has asked that the judge not make public the Bongiorno family budget documents on the grounds that the media would sensationalize the facts and make it impossible to pick an impartial jury. The judge rejected that immediately.
When the documents were released last week, two numbers stood out: Annette had spent $1 million landscaping her homes in Boca Raton and Manhasset, L.I.—and $1.5 million reimbursing the friends and relatives she had recruited to invest with her old boss.
Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime stories. He also is the former president of the Overseas Press Club of America, one of the many journalism organizations that protests the arrests of journalists abroad and repression of freedom of speech.