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Madoff's Programmers Indicted

Soulskill posted more than 4 years ago | from the just-an-off-by-one-billion-bug-i-swear dept.

Crime 147

jason8 writes with news that two programmers who worked at Bernie Madoff's investment firm have now been indicted on charges of 'conspiracy, falsifying records of a broker-dealer and falsifying records of an investment adviser,' for their role in hiding the firm's activities (PDF) from the SEC and external accountants. Quoting Reuters: "O'Hara and Perez, employed at the firm from 1990 and 1991, respectively, were primarily responsible for developing and maintaining computer programs in the investment advisory unit at the center of the fraud. Many of the programs were run on an IBM server known as 'House 17,' according to court documents. Prosecutors said the men took hush money to help keep the fraud going and designed codes to make up fake trade blotters and phantom records. US prosecutors said the two men worked under the supervision of Madoff and his top aide, Frank DiPascali, to deceive the US Securities and Exchange Commission and a European accounting firm. DiPascali is cooperating with prosecutors, who said his information led to the arrests of the programmers and the now defunct firm's outside accountant."

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So what? (5, Insightful)

Hatta (162192) | more than 4 years ago | (#31549474)

Wake me up when someone at AIG gets indicted.

Re:So what? (2, Funny)

Anonymous Coward | more than 4 years ago | (#31549590)

So, it's off to federal "pound me in the ass" prison for those guys...

Re:So what? (1)

Opportunist (166417) | more than 4 years ago | (#31549738)

Probably. Unless they happen to be rich, which I doubt, after all, tech people are not exactly the best paid in financial businesses...

Re:So what? (1)

NotBornYesterday (1093817) | more than 4 years ago | (#31550210)

These guys almost left Madoff's operation, who then paid them a boatload of money to stay.

Re:So what? (1)

wiredlogic (135348) | more than 4 years ago | (#31550354)

He probably made them an offer they couldn't refuse.

Re:So what? (3, Insightful)

Gorobei (127755) | more than 4 years ago | (#31550520)

Programmers often claim to be professional workers rather than technicians. This is pretty much a case study: do you walk because you are being asked to behave unethically, or do you rationalize the problem and accept the $200K/year (or whatever?)

Last week I was meeting with our business head, and he asked me if and why my team was able to execute a pretty complex plan. I said yes, of course, and the only reason I gave was that everyone on the team was honest: they would each work hard, and would update us rapidly on their real progress and problems. Got it sold in under a minute, no PERT charts needed. Just professionals planning to get a job done - if even one person on the team might behave like the programmers involved in Madoff's operation, I wouldn't have been able to promise anything.

Re:So what? (3, Insightful)

jhd (7165) | more than 4 years ago | (#31549608)

Dont forget Goldman, Citi, Fanny, Freddy, BofA, CountryWide, etc....

They all new what they were doing.

And Indymac .... (0)

Anonymous Coward | more than 4 years ago | (#31549636)

Re:So what? (-1, Troll)

Anonymous Coward | more than 4 years ago | (#31549720)

Don't forget Barney Frank, Jamie Gorelick and more.

(They might enjoy the federal prison.)

Re:So what? (3, Insightful)

Hatta (162192) | more than 4 years ago | (#31550174)

You are of course correct. Also, Lehman Bros. Especially Lehman Bros. Their failure was the straw that broke the camels back. And yes, they knew what they were doing. They were so clever about what they were doing that they came up with ways to hide liability that no one ever thought of before. String em all up I say.

Re:So what? (0)

Anonymous Coward | more than 4 years ago | (#31549610)

What about Madoff's sons?

Re:So what? (0)

Anonymous Coward | more than 4 years ago | (#31549654)

While ur at it,

wake me up when Ben Bernanke gets indicted.

Re:So what? (0)

Anonymous Coward | more than 4 years ago | (#31549886)

Insightful? Really? This is nothing but a witch hunt.

You leave AIG alone. I won't stand anyone smearing them unnecessarily, not when I have half of my money in their stock!

Re:So what? (1)

darth dickinson (169021) | more than 4 years ago | (#31549950)

AIG was the conduit by which billions of US taxpayer dollars made their way to foreign companies. They also looked the other way when banks were trading worthless Mortgage-Backed securities - if they were doing their jobs, their risk assessment group would have dropped the banks' policies like a hot potato.

Re:So what? (0)

Anonymous Coward | more than 4 years ago | (#31550168)

This is what you "conservatives" really mean when you bitching about government regulation isnt it?

Re:So what? (1)

insufflate10mg (1711356) | more than 4 years ago | (#31550578)

COUGH The reason we gave them the money was to save them from collapse and save our economy from the problems that would create. They are paying it back. ENDCOUGH

I was going to post (0, Offtopic)

NotSoHeavyD3 (1400425) | more than 4 years ago | (#31549480)

That if they're actually guilty of helping pull this stuff off then fuck them but then I'm reminded if they get convicted that's probably actually going to happen to them.

Re:I was going to post (0)

Anonymous Coward | more than 4 years ago | (#31550018)

These are white collar criminals. They go to the country club resort prison.

I guess the moral of the story is to have morals. (5, Insightful)

Agamous Child (538344) | more than 4 years ago | (#31549494)

If your boss asks you to break the law, the argument "I was just following orders!" doesn't hold up according to the authorities, especially when your boss decides to "cooperate with them" and throw you under the bus. Always question the motives and the legality of a system you design, and if your boss asks you to break the law, tell them that you won't do it, and if they persist, explain that you are going to contact authorities immediately.

Re:I guess the moral of the story is to have moral (-1, Offtopic)

Agamous Child (538344) | more than 4 years ago | (#31549504)

oh, frist psot.

Re:I guess the moral of the story is to have moral (1, Informative)

Anonymous Coward | more than 4 years ago | (#31549556)

I took the high road. I've been unemployed for three years since. I wish I had just done the fucking job and then my kids would have money in the college fund, my wife and I would have some savings, and I wouldn't stress about paying the mortgage each month. I did contact the authorities, and they couldn't care less about my situation. (found a huge hole where the exec mgmt had been moving money off the books, and either taking kickbacks, or using it to pay for "business expenses" they would rather not have been made public.)

Re:I guess the moral of the story is to have moral (0)

Anonymous Coward | more than 4 years ago | (#31549596)

On the bright side, you came through this mess with the knowledge of how to correctly use the "couldn't care less" phrase. Kudos!

Re:I guess the moral of the story is to have moral (1)

beakerMeep (716990) | more than 4 years ago | (#31549606)

In Thank You for Smoking the lobbyist called that the 'Yuppie Nuremberg Defense'

Sorry for the Godwin. But I agree, it seems the roles of who is cooperating are reversed here from what I'd expect.

Re:I guess the moral of the story is to have moral (4, Insightful)

tpstigers (1075021) | more than 4 years ago | (#31549764)

Success in our culture is often measured by money. Unfortunately, money and morals don't usually go together. So we generally have to make a choice - do I want to be rich, or would I rather be able to teach my kids the difference between right and wrong? Personally, I think you made the right choice.

Re:I guess the moral of the story is to have moral (2, Insightful)

ClosedSource (238333) | more than 4 years ago | (#31550734)

I know it doesn't put food on the table but you did good. Sometimes the satisfaction you get from doing the right thing is all you get for your efforts.

Let's hope there really is Karma.

Re:I guess the moral of the story is to have moral (0)

Anonymous Coward | more than 4 years ago | (#31549632)

Maybe if they weren't taking extra "hush money" for doing something they *knew* was illegal, maybe the "following orders" defense would have worked.

Re:I guess the moral of the story is to have moral (1)

tkelechogi (813782) | more than 4 years ago | (#31549698)

The problem is that somebody who's orchestrating a billion-dollar scheme likely uses more subtle techniques to manipulate people into acquiescence than pointedly asking "will you break the law for me?" And if they do ask openly, you can be sure they've got some leverage: they'll either bribe or blackmail you. So, in this case, the moral really is: don't take bribes.

Re:I guess the moral of the story is to have moral (5, Interesting)

gbjbaanb (229885) | more than 4 years ago | (#31549734)

but is it a bribe, or a bonus?

I mean, if I worked at a financial org, and they asked me to write some wierd code that created dummy trade records, I may think 'eh?' and ask whether it was correct or not, but they'd then tell me its all legal, above board and just another one of those stupid regulatory rules that seem to make no sense to mere programmers... and I'd shrug, say "well, ok then" and do it. then they give me a huge bonus and I think "great, working for financial services is wonderful - they always pay large bonuses"

I mean, imagine if you worked on a popular OS and my boss told me to put a back-door in, saying the NSA required it of us. what would you do? :)

Finanical Bonuses (0)

Anonymous Coward | more than 4 years ago | (#31549960)

Salary on Wall Street is warped. They offer $150k or $200k (or more). But a large chuck of that is your "annual bonus". Leave or get fired early, and there's no bonus. So you're actually living off $60k-$90k. If they like you, and want to keep you, you get the bonus. Otherwise you get the door.

This is why it's so important for financial firms to pay out their bonuses each year. If they don't, that's like giving your worker-level employees a 40%-60% pay cut. Anyone who can leave will. What's left over won't be pretty!

Had these Maddoff programmer guys gotten excessively large bonuses, they would have quit and retired. When you're a millionaire, why keep grinding away with that long commute...

Re:Finanical Bonuses (1)

NotBornYesterday (1093817) | more than 4 years ago | (#31550258)

Had these Maddoff programmer guys gotten excessively large bonuses, they would have quit and retired. When you're a millionaire, why keep grinding away with that long commute...

When they wanted to leave (because their hands were dirty and getting dirtier), they were offered good money to stay and set things up so someone else could do most of the dirty work. Why keep doing it? Heck, if you'll sell out for $xx,000 once, you keep at it because you want the next payday too.

"Investigative Journalism" is dead (2, Insightful)

beakerMeep (716990) | more than 4 years ago | (#31549968)

Is it just me or does it seem like the most important details are always left out of these articles? The report clearly raises the question about how much these guys were paid and how willingly they aided their superiors. It also seems an inexplicable role reversal of the big fish cooperating to catch the little fish. Why is this type of info always left out of articles? I gather it's possible that some info was unavailable, but I feel like the journalists who write these articles don't even bother following up to see. As long as we have a bit of controversy it's good to go. At the very least there should be a line such as "we contacted the US Attorney regarding the case but they had no comment about the apparent role reversal or how much money the programmers were alleged to have been paid for the crime."

Re:"Investigative Journalism" is dead (1)

NotBornYesterday (1093817) | more than 4 years ago | (#31550302)

It also seems an inexplicable role reversal of the big fish cooperating to catch the little fish.

In a drug bust, they bust the little guy to get the middleman, and pressure the middleman to get the big kahuna. In this case, they started at the top, and so every link in the chain leads further down instead of up. Oh, also, the big guys have better lawyers. These IT guys sure don't look innocent to me, but you can be sure that they're being sold out by bigger fish who want to stay out of the fire.

Re:"Investigative Journalism" is dead (1)

ClosedSource (238333) | more than 4 years ago | (#31550774)

I agree. There ought to be a law that says the small fish can't be punished more than the big fish. There are plenty of cases where a criminal involved their girlfriend in a crime and then turned state's evidence against her while she "stood by her man". It sucks.

Re:I guess the moral of the story is to have moral (2, Insightful)

K. S. Kyosuke (729550) | more than 4 years ago | (#31550068)

I mean, if I worked at a financial org, and they asked me to write some wierd code that created dummy trade records, I may think 'eh?' and ask whether it was correct or not

"Hey, Jim, we need you to write setup code for some test cases."

Re:I guess the moral of the story is to have moral (3, Funny)

beakerMeep (716990) | more than 4 years ago | (#31550106)

"OK, what are we testing?"

"How about testing the imaginary scenario of us making billions of off fake trades? We'll have a little fun with it, haha."

"Hah, you're such a kidder, Bernie."

Re:I guess the moral of the story is to have moral (2, Interesting)

Migala77 (1179151) | more than 4 years ago | (#31550086)

but is it a bribe, or a bonus?

The 'please don't tell the SEC about this'-condition might have given them a hint about that.

I mean, imagine if you worked on a popular OS and my boss told me to put a back-door in, saying the NSA required it of us. what would you do? :)

Check with the NSA? Ask which law authorizes the NSA to do that?

Re:I guess the moral of the story is to have moral (2, Funny)

Vasheron (1750022) | more than 4 years ago | (#31550228)

I mean, imagine if you worked on a popular OS and my boss told me to put a back-door in, saying the NSA required it of us. what would you do? :)

I would contact the RCMP and CSIS immediately!

Re:I guess the moral of the story is to have moral (2, Funny)

selven (1556643) | more than 4 years ago | (#31550386)

I mean, imagine if you worked on a popular OS and my boss told me to put a back-door in, saying the NSA required it of us. what would you do? :)

Put a back-door in the back-door. What else is there to do?

Re:I guess the moral of the story is to have moral (1)

russotto (537200) | more than 4 years ago | (#31550644)

I mean, if I worked at a financial org, and they asked me to write some wierd code that created dummy trade records, I may think 'eh?' and ask whether it was correct or not, but they'd then tell me its all legal, above board and just another one of those stupid regulatory rules that seem to make no sense to mere programmers... and I'd shrug, say "well, ok then" and do it. then they give me a huge bonus and I think "great, working for financial services is wonderful - they always pay large bonuses"

Being the suspicious type, I'd probably ask this question in email, and bcc the thread to an account elsewhere -- preferably somewhere that if push came to shove, could demonstrate to a court's satisfaction that those emails were at least sent when I said they were sent rather than made up after the fact.

Re:I guess the moral of the story is to have moral (1, Insightful)

DoofusOfDeath (636671) | more than 4 years ago | (#31549730)

If your boss asks you to break the law, the argument "I was just following orders!" doesn't hold up according to the authorities, especially when your boss decides to "cooperate with them" and throw you under the bus.

This is only sometimes true. If you tortured people for the CIA under orders, the Obama administration says it won't prosecute you. Although that's not exactly the same, because their argument is that it's okay because the CIA lawyers said it was.

Re:I guess the moral of the story is to have moral (1)

SuperDre (982372) | more than 4 years ago | (#31549936)

But there lies the problem... YOU don't break the law, it's the user who uses your piece of software that is breaking the law.. If a boss tells me to program an option, and that option could be used for illegal things then it's actually my fault? yeah right, that would mean that every gun-maker is also breaking the law as the gun mostly is used for illegal things anyway (and ofcourse there are more then enough other branches to think of). It's also like this, we create software for calculating your wages, It's against the law to pay less as minimumwages, our software makes it possible to pay less (because it's just not possible for us to actually know why they pay less because of so many regulations) and we know some of our customers are knowingly stiffing their workers by paying less. Does that make us responsible and accountable?

Re:I guess the moral of the story is to have moral (1)

darth dickinson (169021) | more than 4 years ago | (#31549970)

...every gun-maker is also breaking the law as the gun mostly is used for illegal things anyway...

[Citation Needed]

Re:I guess the moral of the story is to have moral (1)

WCguru42 (1268530) | more than 4 years ago | (#31550112)

If a boss tells me to program an option, and that option could be used for illegal things then it's actually my fault?

I think this does become your responsibility if that option can only be used for illegal purposes. I'm not knowledgeable enough about the financial industry to say whether or not what these guys programmed was obviously illegal and had no legal area of use, but if it only had use for illegal acts then they knowingly aided in Madoff's scheme and should be prosecuted for it.

Re:I guess the moral of the story is to have moral (1)

NotBornYesterday (1093817) | more than 4 years ago | (#31550326)

as the gun mostly is used for illegal things anyway/quote> Uh, you're being facetious, right?

No it isn't. The moral is: don't commit fraud. (1)

golodh (893453) | more than 4 years ago | (#31549966)

As far as I can see from the opening post, the question whether these people were programmers or not doesn't come into it at all.

If we are to believe the indictment quoted in the opening post, those people were guilty of the following:

BLMIS's As part of a concerted effort overseen by MADOFF and his employee, FRANK DIPASCALI, JR., to deceive both the SEC and the European accounting firm, O'HARA and PEREZ developed and maintained computer programs that generated numerous false and fraudulent records. O'HARA and PEREZ are alleged to have known that the special programs they developed contained fraudulent information and that they were used in connection with the SEC and European accounting firm reviews.

Unless people want to argue that they were somehow entitled to do this simply because they were salaried employees who would have been fired if they hadn't done as they were told, they deliberately helped commit fraud and hide the traces.

As far as I understand, the law simply asks if you (or any ordinary person in your place) could reasonably have known that you were helping with fraud. If you were, you're guilty. Whether you're on the janitorial staff or a director. That doesn't strike me as particularly unreasonable. Creating fraudulent trade records for an audit isn't something you can do without knowing.

Of course we all know that they were probably enticed or pressured into cooperating. And yes, it's very probable that they would have been fired (without a reference) had they refused to assist in covering up this fraud. And they might have been blackmailed (or even threatened with violence) if they had so much as hinted at disclosure. But even then they could have gone to the police to report the whole thing; if necessary anonymously. However they didn't, and since they actively helped commit fraud they are culpable no matter their position in the firm.

Re:No it isn't. The moral is: don't commit fraud. (1)

QRDeNameland (873957) | more than 4 years ago | (#31550240)

As far as I understand, the law simply asks if you (or any ordinary person in your place) could reasonably have known that you were helping with fraud. If you were, you're guilty.

Actually, shouldn't that be: if there is no reasonable doubt that they knew they were abetting fraud, then they're guilty? Or did they do away with the whole "presumption of innocence" thing when I wasn't looking?

Re:I guess the moral of the story is to have moral (1, Insightful)

Anonymous Coward | more than 4 years ago | (#31550378)

"if your boss asks you to break the law, tell them that you won't do it, and if they persist, explain that you are going to contact authorities immediately."

IMO, That is the worst advice I have ever heard, why on earth would you tell someone you were going to turn them in? What a great way to put yourself and your family in danger. Wouldn't it be better to just resign and report it anonymously? _Telling_ your boss (or anyone) that your going to turn them in serves no purpose and is just pure stupidity.

Re:I guess the moral of the story is to have moral (1)

TheTurtlesMoves (1442727) | more than 4 years ago | (#31550772)

If your boss asks you to break the law, the argument "I was just following orders!" doesn't hold up...

Unless its water boarding, or tapping phones without a warrant.

Insert "scheme" joke here. Or "chroot jail"... (4, Funny)

ewg (158266) | more than 4 years ago | (#31549548)

Insert "scheme" joke here. Or "chroot jail", "execution protection", "dropping privileges",...

Re:Insert "scheme" joke here. Or "chroot jail"... (1, Funny)

Pete Venkman (1659965) | more than 4 years ago | (#31549620)

...or at least a joke about back orifice attacks.

Re:Insert "scheme" joke here. Or "chroot jail"... (-1)

Anonymous Coward | more than 4 years ago | (#31549772)

or sql (pronounced squeal) injection attacks

Re:Insert "scheme" joke here. Or "chroot jail"... (-1)

Anonymous Coward | more than 4 years ago | (#31550230)

...or at least a joke about back orifice attacks.

Where are all of these dirty jokes coming from? Someone needs to get to the root of it.

Re:Insert "scheme" joke here. Or "chroot jail"... (0)

Anonymous Coward | more than 4 years ago | (#31550564)

let's hope it's only targeted orifice attack, and not a DoS!

Re:Insert "scheme" joke here. Or "chroot jail"... (0)

Anonymous Coward | more than 4 years ago | (#31550084)

chown warden youbitches

Re:Insert "scheme" joke here. Or "chroot jail"... (1)

sourcerror (1718066) | more than 4 years ago | (#31550396)

create schema ponzi;

Would be interesting... (2, Insightful)

timeOday (582209) | more than 4 years ago | (#31549560)

...to know how much "hush money" they actually received? Madoff made billions from this. I'll bet anything these guys were paid less than the average Goldman Sachs annual bonus.

I hope I would say "no" to something like this. As engineers and software developers, we generally feel obliged to do what we are told.

Re:Would be interesting... (4, Funny)

Sponge Bath (413667) | more than 4 years ago | (#31549722)

...to know how much "hush money" they actually received?

They got to wear Hawaiian shirts on casual Friday.

Re:Would be interesting... (1)

JamesP (688957) | more than 4 years ago | (#31550612)

...to know how much "hush money" they actually received?

They got to wear Hawaiian shirts on casual Friday.

Yeah, and maybe they got to install that linux thing on their computers that they've been asking for.

Re:Would be interesting... (1)

cbs4385 (929248) | more than 4 years ago | (#31549762)

There are plenty of systems I work on and develop for wherein I depend on the domain knowledge of others to help me along. I normally learn just enough of the systems to get the requested functionality to work. They tell me how to do things legally (as the time constraints don't permit me enough time to research all the statutes, nor am I a lawyer to trust my parsing of the requisite statutes). I can easily envision a scenario wherein the coders did break the law, but didn't know that the specific situation was unlawful.

Granted, the details will probably come out in the trial, but if they're innocent (or innocent enough not to go to pound me in the ass prison), I hope they can afford to defend themselves. I know ignorance of the law isn't an escuse, but I hope that the ones who designed the system are the ones to get punished.

To use a car analogy, who would you rather have sent to jail, the man who designed the Slim Jim used to break into your car, or the person that procured said Slim Jim, used it to overcome the locks in your car, and drove away with it while getting you to fork out for the loss of the vehicle.

Re:Would be interesting... (0)

Anonymous Coward | more than 4 years ago | (#31549872)

anyone else have to look at his user name twice? that was -realbad-

Re:Would be interesting... (1)

karnal (22275) | more than 4 years ago | (#31550580)

Actually, instead of just being the man who designed the slim jim - in this car analogy, there would be two sets of people:

1. Programmers / person who created AND GAVE the slim jim to #2
2. DiPascali / person who broke into the car.

Yes, they were paid off, and here's how much. (4, Informative)

Animats (122034) | more than 4 years ago | (#31550220)

Here are the payoff details, from the SEC press release [sec.gov] . They were paid off, but not very well.

The SEC alleges that O'Hara and Perez had a crisis of conscience in 2006 and tried to cover their tracks by attempting to delete approximately 218 of the 225 special programs from the House 17 computer. But they did not delete the monthly backup tapes. O'Hara and Perez then cashed out hundreds of thousands of dollars each from their personal BMIS accounts before confronting Madoff and refusing to generate any more fabricated books and records.

According to O'Hara's handwritten notes from the encounter, one of them told Madoff, "I won't lie any longer. Next time, I say 'ask Frank,'" meaning that Madoff should rely on DiPascali alone to create the false data and reports.

The SEC's complaint alleges that Madoff responded by telling DiPascali to offer O'Hara and Perez as much money as necessary to keep quiet and not expose the misrepresentations. O'Hara and Perez considered the offer and demanded a salary increase of nearly 25 percent along with one-time bonuses in late 2006 of more than $60,000 each. They stated to DiPascali at the time that they did not ask for more because a greater amount might appear too suspicious. DiPascali then managed to convince O'Hara and Perez to modify computer programs so that he and other 17th floor employees could create the necessary reports themselves.

Re:Would be interesting... (1)

shawn(at)fsu (447153) | more than 4 years ago | (#31550294)

As an engineer you should do what is right and not illegal. The engineer is the one who makes ideas manifest in the real world, and as such you should know that if it's illegal you're head will be on the chopping block. Up until that point where it's created it's just an illegal idea.

No details (3, Informative)

UnknowingFool (672806) | more than 4 years ago | (#31549584)

Reading the article and the indictment no details are given that the men knew it was a fraud other than the allegations. Also no details are given about "hush" money.

Re:No details (5, Insightful)

canajin56 (660655) | more than 4 years ago | (#31549660)

Also, the courts are granting one of the masterminds leniency in exchange for prosecuting their underlings? Isn't that the opposite of how it works? Reducing the sentence of a drug kingpin in exchange for testimony against 2 of his street dealers, really?

They didn't turn Madoff in. (5, Insightful)

Animats (122034) | more than 4 years ago | (#31549824)

Also, the courts are granting one of the masterminds leniency in exchange for prosecuting their underlings? Isn't that the opposite of how it works? Reducing the sentence of a drug kingpin in exchange for testimony against 2 of his street dealers, really?

Justice Department policy is that the first one to come forward and turn in the others gets leniency. [justice.gov] Those guys could have turned in Madoff, even after Madoff's arrest, until Madoff confessed. But the one "that is second in the door -- even if by only a matter of days or hours, as has been the case on a number of occasions -- will not be eligible for leniency." If your company is crooked, it's very important to know this.

Madoff himself, of course, is Prisoner #61727-054, at Butner Federal Correctional Institution (medium security).

Re:No details (1)

physicsphairy (720718) | more than 4 years ago | (#31549826)

You cut deals simply in order expand your ability to prosecute. In a criminal hierarchy you're often interested in "cutting off the head," who is probably the guy guilty of the most charges anyway, but in this case that was Bernie Madoff (whom they've already got) and it isn't exactly clear that his "top aide" was more instrumental to the deceit than the programmers. In any case, if they weren't willing to cut a deal themselves, well, I guess their "prisoner's dilemma" playing strategy was not optimal.

Re:No details (1)

Alien1024 (1742918) | more than 4 years ago | (#31550132)

Also, the courts are granting one of the masterminds leniency in exchange for prosecuting their underlings? Isn't that the opposite of how it works? Reducing the sentence of a drug kingpin in exchange for testimony against 2 of his street dealers, really?

If the kingpin gets caught before the street dealers, why not?

Re:No details (1)

bloodhawk (813939) | more than 4 years ago | (#31550308)

It isn't the opposite at all. There are plenty of known drug kingpins and crime figures that have significantly reduced their sentences by ratting out all their underlings. He who rats first gets all the cheese.

Re:No details (1)

wiredlogic (135348) | more than 4 years ago | (#31550388)

This was a crime executed with... a computer ZOMG!!! The "kingpin" was just a naive, technically illiterate bureaucrat. These two masterminds were the true terrorists. Who knows what other crimes they might attempt if this patriotic whistle blower didn't do the right thing.

Re:No details (5, Informative)

Danimoth (852665) | more than 4 years ago | (#31549666)

Generally, trade reports are generated from you know, trades. Typically, for the reason of the article, these systems don't allow the users to generate reports even for testing purposes. Rather, they would submit a trade in a test stock such as ZVZZT or ZXZZT. These would generate a trade, which would show on the reports, but not have any clearing associated with them. While it is possible to "dummy" in trade reports, even a rudimentary glance at the corresponding blotter would throw up red flags as there would be no clearing associated with the trades, and they would have no presence on the tape. I know the auditors were crooked, but this is an aspect of the scam that the SEC should have been all over. A system which would make it appear as if there was clearing (at least on the paper that Madoff was generating) without that clearing actually being there is something that should shout "FRAUD" to anyone involved in the project.

Re:No details (1)

beakerMeep (716990) | more than 4 years ago | (#31549680)

Maybe, but you have to grant that it was a McCool article.

Re:No details (0)

Anonymous Coward | more than 4 years ago | (#31549874)

That is why we have trials. I'm amazed at the number of people here who hold strong opinions as to the guilt or innocence of those accused of crimes without any knowledge of the evidence or the applicable laws. Its just a reflex: all management is guilty and all technicians are innocent.

Re:No details (1)

beakerMeep (716990) | more than 4 years ago | (#31550076)

Management typically holds power over their subordinates, so it's not unreasonable to take that into consideration. And, in this particular case, some of the management is already serving time, so that part isn't exactly presumptuous.

Re:No details (2, Informative)

morgan_greywolf (835522) | more than 4 years ago | (#31550032)

They would have to know what they were doing was fraudulent, since the software they wrote generated false trade records. A real electronic trade connects to the trade exchange systems, which feeds back a confirmation code that the transaction took place. Since no actual trade took place, no there was no confirmation code. The software they wrote simply made it appear that the trade legimitately took place.

Re:No details (1)

Renraku (518261) | more than 4 years ago | (#31550100)

Not all hush money is created equally. Most people wouldn't even know that it was hush money if they were receiving it. Most likely, he hired some programmers and told them that they would be paid above what they're worth, in exchange for secrecy and trust.

Should've used the standard programmer defense (1)

Average_Joe_Sixpack (534373) | more than 4 years ago | (#31549592)

"Hey I was just following the spec!! Honestly I didn't know it's all hex to me!"

Makes me think of this scene from Clerks (3, Insightful)

colmore (56499) | more than 4 years ago | (#31549598)

Damned if you do (0)

Anonymous Coward | more than 4 years ago | (#31549642)

Damned if you don't.

Re:Damned if you do (1)

WCguru42 (1268530) | more than 4 years ago | (#31550208)

A little less damned if you don't. This request came to these programmers before the economy was in the tanks. They probably could have found new jobs. I have no experience with prison but I think I'd rather be unemployed than in prison of any sort.

Re:Damned if you do (1)

selven (1556643) | more than 4 years ago | (#31550418)

I have no experience with prison but I think I'd rather be unemployed than in prison of any sort.

Some people actually like prison. It's an environment where you literally have to try to screw up and where all the choices are made for you, so you just have to do whatever you do and you'll be fine. These types of people, obviously, tend to go into underling professions in real life, and the two programmers here who simply did what they're told without thinking about legality fit the bill pretty well.

Re:Damned if you do (1)

russotto (537200) | more than 4 years ago | (#31550700)

Some people actually like prison. It's an environment where you literally have to try to screw up and where all the choices are made for you, so you just have to do whatever you do and you'll be fine.

Unless you're young, white, male, and of slight build. Then it's pound-you-in-the-ass time.

20 years ago? (0)

Vellmont (569020) | more than 4 years ago | (#31549692)

Since they only worked for him for a total of 2 years, 20 years ago, it makes you wonder who did the programmer dirty work for the next 17 years. These guys sound like small fish.

Re:20 years ago? (1)

Opportunist (166417) | more than 4 years ago | (#31549726)

Madoff was already the scapegoat and sacrificial lamb, a token conviction for all the others that did exactly the same (but hey, "we're doing something against it, see, we even arrested a big one"). Why do you think it would not work for his underlings?

Re:20 years ago? (2, Informative)

Zak3056 (69287) | more than 4 years ago | (#31549736)

I think you read that wrong... they have been working for him "from" (i.e. since) 1990 and 1991, not "during 1990 and 1991."

Re:20 years ago? (1)

Vellmont (569020) | more than 4 years ago | (#31549768)

You're right. The wording of "from" is a bit strange.

Re:20 years ago? (0)

Anonymous Coward | more than 4 years ago | (#31549868)

It's not the wording of "from", it's the comma before "respectively".

Re:20 years ago? (3, Informative)

D. Taylor (53947) | more than 4 years ago | (#31549742)

Um, they didn't work for him from 1990 to 1991. One was hired in 1990, the other in 1991. They still worked for him beyond 2006: http://www.finextra.com/news/fullstory.aspx?newsitemid=21200 [finextra.com]

Re:20 years ago? (0)

Anonymous Coward | more than 4 years ago | (#31550416)

its says ...."from 1990 and 1991"

Re:20 years ago? (1)

nextekcarl (1402899) | more than 4 years ago | (#31549770)

What if they went on to do this same stuff for others afterward? Maybe that's why they granted leniency to Madoff in exchange for helping nap these guys? Otherwise that part just sounds quite odd. Though that just makes you wonder who else is doing the same thing that we haven't heard about. tl;dr

Re:20 years ago? (0)

Anonymous Coward | more than 4 years ago | (#31549810)

You need to re-read the summary, at the least. The programmers were employed at the firm FROM 1990 and 1991, respectively (this means IN THE ORDER NAMED)..... This means they began their employment in those years and no mention is made of the duration of their employment, which seems to imply they were continuously employed from their start dates through to when the scheme crumbled.

Digital Era Henchmen Among Us (4, Interesting)

lucm (889690) | more than 4 years ago | (#31549800)

Big Tobacco health data. Big Pharma test data. Big Oil environmental data. Enron accounting or trading data. Retails sales zappers.

There is no way all this data "tweaking" can be done without involving IT people: DBA's, programmers, techies.

Right now, at this very moment, some of these Digital Era Henchmen are reading Slashdot on iPhones or 32 inch monitors purchased with blood money. And chances are that some of these people are making snide comments about Microsoft or Darl McBride's ethics. Tsk tsk.

About Time! (3, Insightful)

Anonymous Coward | more than 4 years ago | (#31549982)

It's about time some simple programmers got held accountable for their deeds.

I can live with programmers and bad testing, bad code, bad QA, but I can NOT accept EVIL code.

Just following orders does not cut it. These people knew what they were doing, there is no hiding it.

Want to be called a "software engineer"? Live by the engineers code of ethics, be judged by the engineers standards, and accept the same punishment. Otherwise, it's just being a simple programmer.

Statute of Limitations? (1)

Rick Zeman (15628) | more than 4 years ago | (#31550090)

I would think that after 19 or 20 years, respectively, that the statute of limitations for mere fraud would have kicked in.

Re:Statute of Limitations? (1)

Caraig (186934) | more than 4 years ago | (#31550172)

There are all sorts of caveats to the statute of limitations. It's not as bulletproof as it is made out to be. Obviously, Class A felonies are exempt from the statute, but there are likely other caveats and exemptions.

In this case, however, it appears that the programmers were hired *since* 1990 and 1991, and have continued to work with Bernie and the Boffers till at least 2006.

If that is not the case, it's possible that the court decided that they aided and abetted a criminal action which continued on to the present day, thus exempting them from the statute of limitations.

Re:Statute of Limitations? (1)

Corbets (169101) | more than 4 years ago | (#31550214)

I would think that someone capable of finding his way to Slashdot should be able to RTFA correctly... ... wait, never mind.

Given that this is Slashdot, allow me to clarify it for you: they have been working for him (one since 1990, the other since 1991) until as recently as the last 4 years.

no ethics (2, Informative)

Anonymous Coward | more than 4 years ago | (#31550158)

While working on a contact for company A, which was servicing company B, I was asked to commit fraud to the tune of maybe 300k by falsifying data in the deliverable to Company B. I refused. It is scary to think about the absolute lack of ethics I have seen...before I walked off site in this instance I had a manager yelling at me to just do it. They found someone else to do it, eventually got caught and it was a pretty ugly fiasco, but my company was not involved. Company B was huge and could have owned us all.

DiPascali? He's an Eyetie, right? (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#31550224)

What would you expect from an Eyetie but to split on others to save his own greasy nigger skin.

You know, I read a lot. Especially about things that have to do with history. I find that shit fascinating. Here's a fact, I don't know if you know or not, Eyeties were spawned by niggers.

It's a fact. You see, Eyeties have black blood pumpin' through their hearts. If you don't believe me, you can look it up. Hundreds and hundreds of years ago, you see, the Moors conquered Italy. And Moors are niggers.

So you see, way back then, Eyeties were like the wops from Southern Switzerland. They all had blonde hair and blue eyes, but, well, then the Moors moved in there, and well, they changed the whole country. They did so much fuckin' with Eyetie women that they changed the whole bloodline forever. That's why blonde hair and blue eyes became black hair and dark skin. You know, it's absolutely amazing to me to think that to this day, hundreds of years later, that Eyetie's still carry that nigger gene.

Codes (0)

Anonymous Coward | more than 4 years ago | (#31550250)

Those codes would be some kind of accounting term, right? So long as it isn't computer software, as that would be CODE (singular, not plural), slashdotters can rest easy. These 'codes' are something accountants have. It's an accounting term. Since computer source code is ALWAYS, singular, then I know for sure when they say codes, that its an accounting term. Only a moron, someone with the IQ of a fruit fly would make a dumb-ass mistake of calling computer software 'codes'. Since the article comes from a reputable firm, a firm that would never talk about someone getting a hairs cut, or going on a roads trip, they wouldn't make a dumb-ass mistake like making something plural where it REALLY REALLY should appear singular.
So long as it's some kind of accounting term though...

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