SEC hits Madoff director with false accounting rap

The US markets watchdog has hit convicted fraudster Bernard Madoff’s right-hand man with false accounting charges.

Daniel Bonventre, Madoff's director of operations, disguised fraud and the financial losses at Madoff’s company by misusing and improperly recording investor money to create the false appearance of legitimate income, according to the Securities and Exchanges Commission.

Bonventre falsified "accounting records to enable the multi-billion dollar fraud and illegally enrich himself, Madoff, and Madoff’s family and employees," the SEC said in a statement today.

The watchdog filed its complaint at the US District Court for the Southern District of New York.

As Madoff’s operations chief, Bonventre ran the back office at Bernard L. Madoff Investment Securities and oversaw the firm’s accounting and securities clearing functions for at least 30 years.

The SEC alleges Bonventre knew that billions of dollars in investor funds were not being used to purchase securities on behalf of investors. The SEC also claimed Bonventre made at least $1.9m in illicit personal profits from the scheme through fake, backdated "trades" in his own investor account at BMIS.

"A fraud of this magnitude requires a coordinated effort. Bonventre played an essential part by creating bogus financial records to give BMIS the appearance of legitimacy, when in fact the firm lost money and could not have survived without the fraud," said George S. Canellos, Director of the SEC’s New York Regional Office.