Madoff’s Coders Charged With Aiding Massive Ponzi Scheme

[Xipe Totec]

Two programmers who worked for convicted fraudster Bernard Madoff have been arrested and charged with providing technical support for the massive Ponzi scheme that bilked investors out of an estimated $65 billion.

Jerome O’Hara, 46, and George Perez, 43, were arrested Friday morning and charged with conspiracy for falsifying books and records for Madoff’s broker-dealer and investment businesses.

“The computer codes and random algorithms they allegedly designed served to deceive investors and regulators and concealed Madoff’s crimes,” federal prosecutor Preet Bharara said in a statement.

The two, who began working for Madoff in the early 90s, are accused of writing software in 2003 and 2004 that produced fraudulent records that were fed to U.S. regulators and a European accounting firm reviewing the firms’ work. They allegedly repeatedly revised the programs through 2006 to produce reports designed to deceive investigators.

http://www.wired.com/threatlevel/2009/11/madoff-programmers

[geckosfeet]

1. What?! Cooking the books on Wall Street?! Bernie - tell me it ain't so.

:sarcasm:

[metapunditedgy]

2. Lots of other Wall Street programmers feeling a bit nervous right now?

Of course, the odds that anything will actually come of this are small. The SEC will probably step in and broker a deal that makes the whole problem go away, so that no further investigations ever happen.

[Xipe Totec]

3. The coders will probably land jobs as security consultants

Forensic computer science is taking off as a new field of study.

[morillon]

4. I've known other businesses that wanted programmers to cook the books.

A friend and I once did a job for a client who wanted us to add in an algorithm that would subtly manipulate amounts of money paid to employees and billed to customers. No individual amount would be enough to attract attention, but multiplied thousands and even millions of times, it was going to amount to quite a lot of money for her every year. My friend, who dealt more directly with this sleazebag than I did, told her in no uncertain terms that not only would we NOT do it, but any further mention of it would result in his ratting her out to her long-suffering employees and going to the authorities.

We finished the job, sans fraud-o-matic code, but she threatened a lawsuit and hired several experts to come in and review the application to prove that we hadn't met the requirements of the contract and that there was something wrong with the code. She was sadly disappointed in their findings.

I've heard of this kind of thing happening other places, too. But I work in an environment nowadays where something like that would be pretty hard to pull off. There are layers and layers of audit and review, and for whatever reason, the teams who work on various aspects of calculating and safeguarding the company's financial data HATE each other. They live for the opportunity to find a discrepancy and hang an "enemy" team out to dry for it.

These guys were fools for abetting Madoff. Absolute fools.

[Xipe Totec]

5. Your friend took a big risk

You don't call these creeps to their face; that just puts them on the offensive.

He should have gone along and alerted the FBI.

All he managed to do was to set off the creep alarms and send her hunting for other more willing coders.

[morillon]

6. If it had been up to me, that's what I would've chosen.

But this particular friend is a serious bad-ass when it comes to stuff like that, and he was more than ready to rumble if she tried to bring something. I think he enjoys that kind of fight.

I don't. :-)