Madoff Lieutenant Expected to Blow Lid Off Scam

By Rob Quinn,  Newser Staff
Posted Aug 12, 2009 6:17 AM CDT
Bernard Madoff's accountant David Friehling has pleaded not guilty to securities fraud, although analysts believe he may start talking now that Madoff's chief financial officer has confessed.   (AP Photo/ Louis Lanzano)
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(Newser) – Investigators see yesterday's guilty plea of Bernard Madoff's right-hand man as a major breakthrough in their efforts to untangle the elaborate Ponzi scheme, BusinessWeek reports. Frank DiPascali, chief financial officer at Madoff's firm, has promised to cooperate with prosecutors and is expected to name other people involved in the scam and to help trace assets Madoff may have stashed around the world.

DiPascali—who faces a maximum 125-year sentence and has been jailed without bail—played a key role in the scheme, helping Madoff prepare all the paperwork to fool investors and make fake trades look real. DiPascali's agreement to work with prosecutors is expected to spur others to own up to their role in the scam. "This isn't the Mafia," the head of one investigation firm says. "No one's going down with the ship."