By Joe Valiquette
DNAinfo Reporter/Producer
MANHATTAN — The Director of Operations for convicted Ponzi schemer Bernard Madoff was arrested early Thursday at his East 79th Street apartment by the FBI on charges of securities fraud, falsifying records, filing false income tax returns, and conspiracy, law enforcement officials said.
Daniel Bonventre, 63, was in charge of internal accounting documents and financial statements for Bernard L. Madoff Investment Securities since 1978.
He is accused in a criminal complaint of concealing the scope of the firm's investment advisory operations and understating the firm's liabilities by billions of dollars by making false entries in the firm's general ledger and other financial documents, US Attorney Preet Bharara said.
"He affirmatively fabricated basic financial documents to conceal the dire condition of a financial empire that was really a house of cards," FBI Assistant Director Joseph Demarest said.
When Madoff's firm faced a liquidity crisis because not enough cash was on hand Bonventre used clients' bonds as collateral for bank loans totaling $145 million to pay off other clients in 2005 and 2006, prosecutors said.
Bonventre filed inaccurate reports of the firm's assets and liabilities with the Securities and Exchange Commission during the firm's liquidity crisis. He also filed false federal income tax returns relating to $1.8 million he obtained in three fictitious backdated stock trades from 2002 to 2006, the court papers said.
Bonventre is expected to appear in federal court Thursday.
Bernard Madoff is serving 150 years in a North Carolina prison after admitting to cheating investors out of billions of dollars through his investment Ponzi scheme.
Earlier Thursday, it was revealed that Madoff's grandchildren and his daughter-in-law were seeking to have their names changed.
