A federal jury in Manhattan has convicted five former Bernard Madoff lieutenants of helping to facilitate the massive Ponzi scheme that cost clients billions of dollars and shattered investor confidence at the height of the financial crisis.
The sweeping verdict—guilty on all counts—came at the end of a five-month trial, after only about three days of deliberations.
The defendants—including Madoff's former director of operations, his longtime assistant, an account supervisor and two computer programmers—were accused of falsifying records and lying to investors for decades to keep the scam going. It is the first criminal trial arising from the scam. Nine other defendants—including Madoff himself—previously pleaded guilty.
"These convictions, along with the prior guilty pleas of nine other defendants, demonstrate what we have believed from the earliest stages of the investigation: this largest-ever Ponzi scheme could not have been the work of one person," said Manhattan U.S. Attorney Preet Bharara in a statement after the verdict.
The five defendants could each face the equivalent of life in prison, when they are sentenced in July.
But the attorney for the lead defendant in the case said he plans to appeal.
"The list of Bernard Madoff's victims now includes these five former employees," said Andrew Frisch, who represents Daniel Bonventre, former director of operations. Bonventre, 67, was convicted on 21 counts including multiple counts of conspiracy, securities fraud, bank fraud, falsifying records, obstructing the IRS and filing false individual tax returns for four years.
Also convicted was Madoff's longtime assistant Annette Bongiorno, who began working for the firm in 1968 at age 19. By the time the scheme collapsed in late 2008, Bongiorno, now 65, was handling the accounts of some of Madoff's most important customers, and living an upscale lifestyle that included a home in Florida and a Bentley.
At the trial, her attorney claimed Madoff fooled her along with everyone else. Bongiorno still had a Madoff investment account at the time of the collapse, with a purported balance of $50 million. But she like all Madoff investors found the profits in the account were fictitious.
Bongiorno's attorney, Roland Riopelle, told CNBC he expects his client will also appeal.
JoAnn "Jodi" Crupi was an account supervisor for Madoff, and prosecutors said she had day-to-day responsibility for the bank account used to run the scheme. Jerome O'Hara, 50, and George Perez, 48, were computer programmers who designed the software that allowed Madoff's firm to falsify thousands of stock trades for decades.
The trial, which began in October, included weeks of testimony from former Madoff Chief Financial Officer Frank DiPascali, who said the fraud dated back to his earliest days at the firm in the 1970s. Madoff, who is serving a 150-year prison sentence for leading the fraud, has claimed the fraud did not begin until the 1990s.
DiPascali pleaded guilty in 2009 to 10 criminal counts and agreed to cooperate with authorities in hopes for a lesser sentence.
"The jury's verdict suggests that it credited Frank's testimony and we hope that inures to his benefit when he is eventually sentenced," said DiPascali's attorney, Marc Mukasey.
A jury of nine women and three men began deliberating last Monday afternoon and continued through Tuesday. But after one female juror fell ill, deliberations were suspended Wednesday and Thursday. The parties agreed to continue with 11 jurors rather than start over with an alternate, and deliberations resumed Friday.
Shortly after 2 p.m. ET Monday afternoon, a court spokesperson announced a verdict had been reached.
As the verdicts were read, Bongiorno, O'Hara and Perez showed little emotion, while Bonventre and Crupi were visibly upset. None of the defendants spoke to reporters upon leaving the courthouse.
—By CNBC's Scott Cohn. Follow him on Twitter @ScottCohnCNBC