WASHINGTON, July 2 (UPI) -- The U.S. Securities and Exchange Commission failed to uncover Bernard Madoff's Ponzi scheme on five occasions in 20 years, a source close to the agency said.
Madoff was sentenced Monday to 150 years in prison after pleading guilty to 11 counts of fraud. The SEC is investigating how it may have missed detecting the massive fraud that may have lost as much as $50 billion, The Washington Post reported Thursday.
On one occasion in 2004, SEC investigator Genevievette Walker-Lightfoot in the Office of Compliance Inspections and Examinations, warned supervisors that Madoff's paperwork and electronic data were full of irregularities.
She took her concerns to her supervisor Mark Donahue, who was working under Eric Swanson, then an assistant director of the department.
Swanson, who is no longer with the SEC, later married Madoff's niece.
Walker-Lightfoot's claims turned out to be consistent with the case the Justice Department eventually brought against Madoff.
When she brought her concerns to Donahue, however, he directed her to concentrate on an investigation of mutual funds, which was a pressing need at the time.
"Concentrate on mutual funds for the time being," an email from Donahue to Walker-Lightfoot said.