Madoff pair 'cashed in on Ponzi scam'

Two long-time back-office employees of Bernard Madoff were arrested yesterday on charges that they had helped the disgraced financier dupe investors for decades by making fictitious investments – and that they had cashed in on the epic Ponzi scheme themselves.

FBI agents arrested Joann Crupi at her house in Westfield, New Jersey. Annette Bongiorno was taken into custody from her home in Boca Raton, Florida.

An indictment filed in a federal court in Manhattan alleges that Ms Crupi, 49, and Ms Bongiorno, 62, "executed trades in the accounts of [wealthy clients] only on paper... and that achieved annual rates of return that had been predetermined by Madoff". Ms Crupi was charged with creating false records to cover Madoff's tracks amid reviews by the Securities and Exchange Commission. Prosecutors say that as the scheme unraveled, she "became aware that client redemption requests bore no relationship to [the business's] cash on hand, which by late 2008 was woefully insufficient to meet those requests," the indictment said.

Seized records show that between 1975 and 2008 Ms Bongiorno deposited about $920,000 (£574,000) in her own Madoff account and withdrew more than $14m, the indictment said. Crupi received hundreds of thousands of dollars in "off the books" income, it added.

The women "protected and perpetuated the Madoff mirage while putting very real money in their own pockets," US Attorney Preet Bharara said in a statement. Both are charged with conspiracy, securities fraud and falsifying records.