“I’d like to first apologize to my family, my friends and all the victims in the case,” Lipkin told U.S. District Judge Laura Taylor Swain, according to news reports.
Lipkin told Swain he falsified documents to show non-existent account holdings, processed payroll records for employees who didn’t work for the firm and fraudulently applied for a construction loan. His plea was accepted along with an agreement between Lipkin and federal prosecutors to release him on a $2.5 million bond pending his sentencing.
Lipkin could face upward of 70 years in prison. Madoff, 73, is serving a 150-year term in a North Carolina prison.
“Eric Lipkin helped create the detailed and entirely phony trading and business records that contributed to the success of Madoff’s fraud,” said George Canellos, director of the SEC’s New York Regional Office. “The SEC is committed to holding accountable those who helped to perpetrate and conceal Madoff’s scheme.”
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that for more than a decade, Lipkin helped Madoff defraud investors and mislead auditors and regulators about Madoff’s fraudulent, multi-billion dollar advisory operations.
In fact, Madoff used investors’ funds to enrich himself, his family, and his associates and to pay off other investors.
Lipkin also helped Madoff deceive regulators by preparing fake Depository Trust Clearing Corporation (DTCC) reports showing the sham investments for clients. Lipkin received annual bonuses from the firm, including for his work to mislead auditors and examiners, and he received $720,000 from Madoff to purchase a house, an amount he never paid back.
The SEC’s investigation is continuing.