David L. Kugel, a former trader for Bernard L. Madoff Investment Securities will plead guilty in Federal District Court in Manhattan on Monday for his part in conspiring to defraud customers starting in the early 1970s.
The guilty plead comes after a letter was sent to lawyers in which Kugel announced his plea while stating that fraud at the firm started two full decades before Bernie Madoff said it began.
If he goes through with his guilty plea Kugel will be the fifth former Madoff executive to plea guilty in the fraud case.
Kugel’s very early involvement in the firms fraud could help prosecutors who are currently investigating Madoff’s younger brother Peter B. Madoff who started with the firm in the 1970s. According to Peter Madoff lawyer John R. Wing he was unaware of Kugel’s “apparent cooperation” with the government and says his client still knew nothing of the Madoff fraud.
Madoff who is serving a 150-year prison sentence has repeatedly said his ponzi scheme did not begin until 1992, a fact that could be shown false if Kugel’s story checks out.
This court case is not the first for Mr. Kugel, last year he was sued for $22 million for playing a “significant role” in the fraudulent scheme including the creation of fake trade tickets to show a steady level of profits for select customers.
Under his role at Madoff Investment Securities Mr. Kugel earned more than $8 million.