Melania Trump Club

Tuesday, June 5, 2012

Son of Longtime Madoff Employee Pleads Guilty in Probe

 NEW YORK—The son of a longtime trader for Bernard Madoff is expected to plead guilty to conspiracy and other criminal charges next week in the government's probe into the massive fraud, prosecutors said in a letter filed late Friday.

Craig Kugel, the son of David L. Kugel, a former supervisory trader in Madoff's proprietary-trading operation, is expected to plead guilty to five charges at a hearing Tuesday, including conspiracy to obstruct or impede an Internal Revenue Service investigation, making false statements in relation to documents required by Employment Retirement Income Security Act and filing false tax returns.

His father, who worked for Mr. Madoff's firm for nearly 40 years, pleaded guilty to fraud and other charges in November 2011 and agreed to cooperate in the government's investigation.

Craig Kugel is expected to plead guilty at a hearing in Manhattan federal court on June 5 as part of a cooperation agreement with the government, prosecutors said in a letter to U.S. District Judge Laura Taylor Swain.

"The crimes he stands accused of are unrelated to [the Madoff] scheme," said Barry W. Agulnick, Craig Kugel's lawyer.

Craig Kugel, who at one point helped with the budget and overseeing benefits for employees of the Madoff firm, would be the sixth person to admit guilt beyond Mr. Madoff. The decades-long Ponzi scheme came to light in December 2008.

In a lawsuit filed in 2010, Irving Picard, the trustee seeking to recover funds on behalf of Mr. Madoff's victims, alleged that Craig Kugel began working with the Madoff firm when he graduated from the University of Michigan in 1996, focusing largely on administrative matters.

Mr. Kugel, the seventh person including Mr. Madoff to plead guilty to criminal charges, has been cooperating with the government since last year, prosecutors said Tuesday.

He admitted Tuesday to filing false forms for individuals who were on the Madoff payroll, but didn’t actually work there. He also admitted to not claiming, as income, personal expenses he charged to a corporate credit card.

Prosecutors have alleged those expenses including more than $200,000 in charges, including luxury clothing, jewelry and vacations for Mr. Kugel and his family.

His father, David L. Kugel, a former supervisory trader in Madoff’s proprietary trading operation, pleaded guilty to fraud and other charges last November. David Kugel, who worked for Mr. Madoff’s firm for nearly 40 years, also is cooperating in the prob.

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