Judge bars Madoff remark saying accountant ‘dumb’

Jurors in the criminal trial of five former Bernard Madoff employees accused of aiding the con man’s $17 billion fraud won’t hear testimony that he joked about the firm’s “dumb” accountant, a judge ruled Tuesday.

Madoff’s view of David Friehling, who provided accounting services for his securities firm for two decades and later pleaded guilty in the case, is hearsay and can’t be mentioned in a defense lawyer’s cross-examination, U.S. District Judge Laura Taylor Swain ruled.

Madoff’s former finance chief, Frank DiPascali, asked his boss in a conversation about Friehling, “Have you been paying him off, or is he just dumb?” the defense lawyer, Roland Riopelle, said in court without the jury present. Madoff responded that the accountant was “dumb,” Riopelle said, which shows he and Di-Pascali were “moving around other people like pieces on a chess board.”

DiPascali, who pleaded guilty to aiding Madoff’s fraud and is appearing as a government witness in a bid for leniency, is the highest-ranking former executive to testify inthe first criminal trial over the scheme that was exposed after Madoff’s 2008 arrest. The five former employees are accused of using fake account statements and trade confirmations to trick customers for decades and get rich in the process. No trading took place in the firm’s investment advisory business.

Testimony that Madoff and DiPascali “had a chuckle at Friehling’s expense” helps show the extent of the conspiracy led by the two men, said Riopelle, the lawyer for Annette Bongiorno, who worked for Madoff for 40 years and ran the investment advisory unit at the center of the fraud.

Friehling pleaded guilty to fraud in 2009 and agreed to cooperate with U.S. prosecutors. He said that though he didn’t know about the Ponzi scheme, he never conducted an independent audit of Madoff’s firm as accounting rules required and knowingly used false records to reduce Madoff’s tax bills.

Bongiorno, who joined Madoff’s firm when she was 19, has pleaded innocent and claims Madoff tricked her into believing his business was real. Her lawyer’s cross-examination has focused on DiPascali giving her orders that resulted in her helping create fake documents.

Swain also denied a request by another defense lawyer, Gordon Mehler, to show the jury an aerial photograph of DiPascali’s New Jersey mansion and an image of DiPascali dressed casually at an outdoor company party in Montauk, N.Y., about 2001.

The other defendants facing fraud charges in the case are Joann Crupi, who managed large investment accounts; Daniel Bonventre, Madoff’s ex-operations chief; and computer programmers Jerome O’Hara and George Perez, who purportedly wrote code to print millions of fake account statements and trade confirmations.