With federal prosecutors in Manhattan facing a December deadline to bring additional charges connected to Bernard L. Madoff’s multibillion-dollar Ponzi scheme, they are weighing criminal charges against several people connected to the case, said people briefed on the investigation. Among those still under scrutiny are Shana Madoff Swanson, a senior executive at the firm, and Paul J. Konigsberg, a longtime accountant in Mr. Madoff’s inner circle.
Investigators have examined several dozen people related to the case. Including Mr. Madoff, who is serving a 150-year prison sentence, nine have pleaded guilty. When Mr. Madoff confessed in December 2008, that started the clock ticking on a five-year statute of limitations to bring securities fraud charges.
Any new charges would come just weeks before the first criminal trial related to the Madoff case. On Oct. 7, five former employees of Bernard L. Madoff Investment Securities are scheduled to stand trial in Federal District Court in Manhattan on charges they aided the fraud. Each of the five employees â€" Daniel Bonventre, Annette Bongiorno, Joann Crupi, Eric Lipkin and George Perez â€" worked at the firm for more than 15 years.
The trial is likely to last several months, and the defendants are expected to argue that they had no idea their boss was a crook.
“My client was manipulated and deceived by Mr. Madoff and has lost every penny she ever earned at Bernard L. Madoff Investment Securities, and as a result is as much a victim as anyone else in this case,†said Roland G. Riopelle, a lawyer for Ms. Bongiorno, a longtime secretary for Mr. Madoff.
None of the five defendants was as senior as Shana Madoff, the daughter of Peter Madoff, Bernard Madoff’s brother, who served as a senior lawyer and compliance official at the firm. In February, Peter Madoff began serving a 10-year sentence after admitting to falsifying documents and lying to securities regulators, among other crimes.
Ms. Madoff joined her family business after graduating from Fordham University School of Law. She handled many of the firm’s regulatory filings and, according to the trustee for Madoff victims, made false statements to securities regulators. In one instance, she signed a form that said the firm had 23 customer accounts when it actually had nearly 5,000, the trustee said in court papers.
In 2007, Shana Madoff married Eric Swanson, a former lawyer for the Securities and Exchange Commission who played a role in one of the failed Madoff examinations two years before the scheme unraveled. An internal investigation by the S.E.C. concluded that the relationship did not affect the agency’s handling of the Madoff case. Mr. Swanson now serves as general counsel of BATS Global Markets, the stock exchange operator.
A lawyer for Ms. Madoff Swanson, Mark W. Smith, did not return numerous telephone calls and e-mails seeking comment.
Another family member whose conduct has been examined by the government is Andrew Madoff, the younger son of Bernard Madoff and director of trading. He has not been charged with any criminal wrongdoing. His older brother, Mark Madoff, committed suicide on the second anniversary of their father’s confession.
Prosecutors are also investigating whether JPMorgan Chase failed to properly alert regulators to suspicions about Mr. Madoff’s business, said people with knowledge of the investigation.
A lawyer for Andrew Madoff and a spokesman for JPMorgan declined to comment.
Actual cash losses from the Madoff fraud are estimated at about $17 billion, but the paper wealth that was wiped out totaled more than $64 billion. Irving H. Picard, the Madoff trustee, has thus far recovered about $9.4 billion and continues to trace the lost funds. He has filed more than 1,000 lawsuits, and the process of recouping victims’ losses is expected to carry on for years.
A large number of Madoff victims were clients of Mr. Konigsberg, a founding partner of Konigsberg Wolf & Company, a midsize New York accounting firm that is now defunct. Though Mr. Konigsberg received little publicity in the aftermath of the Madoff fraud, few outside of Madoff Securities had such deep knowledge of the firm’s finances.
Marjorie J. Peerce, a lawyer for Mr. Konigsberg, had no comment.
A friend of Mr. Madoff for more than 25 years, Mr. Konigsberg was the only nonfamily shareholder in Madoff’s London operation. He prepared tax returns for two Madoff family foundations and served as an accountant for dozens of families that invested with the firm. Mr. Madoff often referred his investors to Mr. Konigsberg for their tax services.
Trained as a lawyer, Mr. Konigsberg worked for some of Mr. Madoff’s major investors, including Carl Shapiro, a Boston businessman, and Norman F. Levy, a New York real estate executive. He and his wife live in Greenwich, Conn., and Palm Beach Gardens, Fla.
Another outside accountant has already been charged in the case. David G. Friehling, the longtime independent accountant for the Madoff firm, pleaded guilty in 2009 to producing audits that concealed the Ponzi scheme and has been assisting prosecutors. Mr. Friehling ran Friehling & Horowitz, a three-employee firm based in a Rockland County strip mall that provided auditing services for the firm.
Next month’s trial will feature testimony from several former Madoff employees who have pleaded guilty and are cooperating with the authorities. David Kugel, a former senior trader who worked for Mr. Madoff for nearly 40 years, said in court that he supplied Mrs. Bongiorno and Ms. Crupi with pricing information used to create false trades for Madoff customers.
Another significant witness will be Frank DiPascali, the chief aide to Bernard Madoff who pleaded guilty to participating in the fraud. Mr. DiPascali told investigators that Mr. Perez and Mr. O’Hara â€" computer specialists accused of generating the fake customer accounts â€" confronted Mr. Madoff about why the firm never traded stocks.
“You are not going to tell me how to run my business,†said Mr. Madoff during a tense meeting, according to notes of Mr. DiPascali’s interview with the F.B.I. “Trades occur overseas,†he told them.
In August, prosecutors made an unusual pretrial filing, asking the court to exclude evidence that four of the five defendants were at various times romantically involved with one another. And one, the government said, had an affair with Mr. Madoff.
“For example,†prosecutors said, “one of the defendants was in a love triangle with Bernard Madoff himself.â€
