Madoff Aide Loses Virus-Based Bid For Early Prison Release

By Mike LaSusa
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Law360 (April 14, 2020, 11:19 PM EDT) -- A New York federal judge shot down a coronavirus-related compassionate release bid lodged by a former top deputy to notorious Ponzi schemer Bernie Madoff, saying Tuesday that the convict had to go through U.S. Bureau of Prisons channels first.

U.S. District Judge Laura Taylor Swain said Daniel Bonventre, a septuagenarian former employee of Bernard L. Madoff Investment Securities LLC, had to wait until he had taken all the administrative steps possible within the Bureau of Prisons before coming to court with his request for release based on his susceptibility to COVID-19.

Judge Swain said Congress had mandated in "clear and explicit language" that inmates must exhaust their administrative remedies before asking a court to intervene.

"Defendant has not proffered any basis for the court to conclude that Congress intended for a defendant in Mr. Bonventre's position to be permitted to circumvent the statutory exhaustion requirements, even in times of crisis," the judge said, noting that the judicial system has been "inundated with myriad COVID-19-related applications."

Bonventre was sentenced to 10 years in prison after he and four other former Madoff employees were convicted in March 2014 of participating in the infamous fraudster's scheme, which caused an estimated $17.5 billion in investor losses. He has served just over half his sentence, according to court records.

Prosecutors had initially sought more than 20 years in jail for Bonventre, describing him in court papers as a key player in the scheme who helped to create bogus investment records and steal from customer accounts.

In his role as operations chief, prosecutors said, Bonventre helped to create bogus internal accounting documents that concealed the scope of BLMIS's investment advisory operations and understated its liabilities by billions of dollars. Bonventre knew that trades in the investment advisory business were not actually happening, prosecutors said.

In a rare move, Bonventre voluntarily took the witness stand to testify in his own defense, telling jurors that he was ignorant of the fraud until Madoff's December 2008 arrest. Bonventre described Madoff as a serial liar and a "terribly ill man."

Judge Swain made a somewhat similar ruling in January 2019 in the case of former Madoff account manager Annette Bongiorno. The judge said that while Bongiorno does indeed qualify for release to home confinement under the recently passed First Step Act, the statute does not let her apply for early release directly to the court.

Madoff himself recently requested compassionate release from prison, not because of the pandemic, but because he says he is expected to die soon because of complications from kidney failure.

The government has argued against the request, calling Madoff's crime "unprecedented in scope" and saying his 150-year sentence is "wholly justified" in the interest of ensuring that he is punished "to the fullest extent of the law."

Neither side responded on Monday to requests for comment.

The government is represented by Audrey Strauss and Noah Solowiejczyk of the U.S. Attorney's Office for the Southern District of New York.

Bonventure is represented by the Law Offices of Andrew J. Frisch.

The case is U.S. v. O'Hara et al, case number 1:10-cr-00228, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Mike Curley. Editing by Jill Coffey.

For a reprint of this article, please contact reprints@law360.com.

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Case Number

1:10-cr-00228

Court

New York Southern

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March 17, 2010

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