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Madoff employee says scheme began early

Nov. 17, 2011 at 12:26 PM   |   Comments

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NEW YORK, Nov. 17 (UPI) -- Bernard Madoff's claim he launched his Ponzi scheme during the recession of the early 1990s has been contradicted by a long-time employee, U.S. officials say.

Federal prosecutors said David Kugel, a former supervisory trader at Madoff's investment firm, is cooperating with authorities and would to plead guilty in Manhattan federal court on Monday, the New York Post reported.

In a letter to the judge, prosecutors said Kugel will admit to conspiring in Madoff's record $65 billion fraud "beginning in the early 1970s through December 2008."

Kugel allegedly made more than $8 million working for Madoff and pocketed more than $13 million in phony profits after investing $25,000 with him in 1977, court papers show.

Kugel faces a sentence of up to 85 years in prison.

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