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U.S. prosecutors seek longer sentences for Madoff aides

January 10, 2015 at 07:29 pm EST

NEW YORK (Reuters) - U.S. prosecutors plan to ask an appeals court to review the prison sentences given to five former employees of Bernard Madoff, after earlier questioning whether the sentences were too short, according to court filings.

In filings late on Friday in U.S. District Court in Manhattan, prosecutors gave notice that they would be appealing the sentences to the 2nd U.S. Circuit Court of Appeals in New York but did not elaborate further.

One of the five former employees, former portfolio manager JoAnn Crupi, filed a separate notice that she planned to appeal her conviction and her sentence.

A prosecutor urged Judge Laura Taylor Swain in court last month to avoid issuing light sentences for the Madoff defendants so as not to set a precedent for unrelated fraud cases.

"Judges will have to explain how small-time crooks in front of them were worse than the defendants in this case," said Matthew Schwartz, an assistant U.S. attorney.

Prosecutors said the five employees helped Madoff bilk investors of billions of dollars in his massive Ponzi scheme by creating fake documents and backdating trades.

A jury in Manhattan convicted them in March 2014, and Swain sentenced them last month.

Former back office director Daniel Bonventre received 10 years in prison; portfolio manager Annette Bongiorno, six years; computer programmers Jerome O'Hara and George Perez, 2-1/2 years each; and Crupi, six years.

The government had requested more than 20 years for Bonventre and Bongiorno, more than eight for O'Hara and Perez and more than 14 for Crupi.

A lawyer for one of them defended the judge's decisions and called her a "courageous jurist."

"Judge Swain's sentences were handed down following her painstaking review of the record and her conscientious consideration of all of the appropriate sentencing factors," Larry Krantz, who represents Perez, said in an email to Reuters on Saturday.

A spokesman for the U.S. Attorney's Office in Manhattan declined to comment on Saturday. Attorneys for the four other former employees did not immediately respond to a request for comment.

Madoff is serving a 150-year prison term in North Carolina after pleading guilty in 2009 to running a scheme that cost investors an estimated $17 billion or more in principal.

(Reporting by David Ingram, Nate Raymond and Joseph Ax; editing by Andrew Hay)

By David Ingram

Bernard L. Madoff

Born into a Jewish family, he gave up his studies in order to start his career as lifeguard on the beaches of Long Island. Bernard Madoff founded in 1960, at 22 years old, his own investment company, called Bernard L. Madoff Investment Securities LLC, with only 5 000 dollars (won thanks to his job as lifeguard but also as installer of fire protections systems.

Bernard L.Madoff Investment Securities LLC becomes one of principal investment firm in Wall Street. His two sons, Mark (44 years old) and Andrew (42 years old) and his brother work with him.

Bernard Madoff is very active in the National Association of securities Dealers (NASD), a self-regulatory organization specialized in stock-market. His company is one of the five most active companies in the development of Nasdaq and Bernard Madoff was for a time chairman of the board. This “self made man” has a reputation so prestigious and he is considered as a ma major innovator in the world of electronic finance.

During his career as a fund manager, he is famous for his gift to get yields from 8 to 12 % per year regardless of market trends. However the fund accrues enormous losses so Bernard Madoff creates a system pyramid-shaped of sales where he pays the interests of first investors with the capital providing by the last investors.

Following the fall of financial markets at the end of 2008, some investors wishing to recover their funds make the system collapse. The Securities and Exchange Commission (SEC), the U.S stock market regulator, announces that the group of assets are fictitious and the fraud amounts around $ 50 billion, making it the biggest fraud performed by only one man.

In December 2008, Bernard Madoff is arrested by the FBI. His clients were banks, funds and big fortunes (Steven Spielberg). Among his investors, there are several French banks as Natixis, Société Générale.

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