Bloomberg News

Ex-Madoff Trader David Kugel Agrees to Plead Guilty to Fraud

November 17, 2011

Nov. 17 (Bloomberg) -- A former trader at convicted con man’s Bernard Madoff’s investment firm, David Kugel, agreed to plead guilty to fraud, prosecutors said.

Kugel is expected to enter a guilty plea “pursuant to a cooperation agreement with the government” at a Nov. 21 hearing, prosecutors said yesterday in a letter to U.S. District Judge Laura Taylor Swain in Manhattan that was posted on the Justice Department’s website.

Kugel was a supervisory trader in the proprietary trading operation of Bernhard L. Madoff Investment Securities LLC, according to the letter. He’s accused of conspiracy to commit securities fraud going back to the early 1970s by helping to create fake trades used to deceive Madoff’s customers.

He is also accused of conspiracy to commit bank fraud, as well as securities and bank fraud, and falsifying records. The maximum prison sentence for bank fraud is 30 years.

Madoff, who pleaded guilty to fraud charges, is serving 150 years in prison for the largest Ponzi scheme in U.S. history. Investors lost about $20 billion in principal, the U.S. trustee liquidating the securities business has said.

Dan Zelenko, a lawyer for Kugel, declined to comment on the letter.

The case is U.S. v. Kugel, 10-228, U.S. District Court, Southern District of New York (Manhattan.)

--Editors: Michael Hytha, Frank Longid

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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