Jodi Crupi was one of Madoff’s employees who worked on the infamous 17th floor. These employees were complicit in the fraud. ‘MADOFF: The Monster of Wall Street’ is now streaming on Netflix.
Bernie Madoff shook the world of finance when the news got out that he has been running the biggest Ponzi scheme, worth around $64 billion, in the history of Wall Street; he was able to run this scheme for decades.
It is not the Security and Exchange Commission (SEC) that catches him. It is the 2008 market crash that puts him in a position of no escape. His sons, to prevent being accessories to his crime, report his crime to the authorities.
Madoff claims that he alone is responsible for the crime and that no one else was aware of the Ponzi scheme. However, it is hard to believe that one man could have pulled an operation of this scale all on his own.
Madoff had a separate office on the 17th floor of the Lipstick Building, where the operations of his illegitimate business took place. The employees on this floor aided him for years. JoAnn “Jodi” Crupi was one such employee.
Jodi Crupi’s role in Madoff’s fraud
Madoff recruits fresh high-school graduates to work on the 17th floor. As these employees are young and highly impressionable, Madoff could count on them to be fiercely loyal to him.
He was right about that, as these employees do what they are told without asking too many questions. They essentially create fake trades by keypunching historical information about the trades that have already taken place into the computer.
Jodi gets recruited to play an important part in Madoff’s illegitimate business. Initially, her job is mainly data entry, but over the years, she gets promoted to the position of Account Supervisor and becomes a key player in the business.
As with any other Ponzi scheme, this one needs to keep track of the money going in and out of the JPMorgan bank account, also known as the 703 account.
Jodi maintains a daily tally of the cash flowing in and out of the Ponzi account in what is known as “Jodi’s pad”. The numbers are given to Madoff at the end of each day to inform him of the amount left in the account to meet further withdrawal requests.
Is Jodi found guilty?
When Madoff’s scheme gets exposed, his own family and every 17th-floor employee come under scrutiny. The authorities need to decide who else could be held accountable.
In November 2010, Jodi is arrested, along with another employee who was working on the 17th floor, on charges of conspiring with Madoff and sustaining the Ponzi scheme. Jodi maintains her innocence and denies the charges.
She claims that she simply did what she was asked to do; she was not told anything beyond that. If even the SEC, among so many others, could not discover Madoff’s fraud for so long, it was impossible for someone like her to know about it.
The general argument of the 17th-floor employees is that they were not aware that it was a Ponzi scheme. They were aware that the trade was not entirely legitimate, but they assumed that Madoff had assets somewhere in Europe to cover it.
Jodi was convicted of multiple counts — conspiracy, securities fraud, falsifying books and records, and tax evasion. As she was deemed complicit by the court, she was sentenced to 6 years in prison.