By Bernard Vaughan
NEW YORK, Oct 17 (Reuters) - Lawyers for five former employees of Bernard Madoff said on Thursday their clients were mere puppets under the spell of what one called an enigmatic "broker-dealer rockstar" and "pathological liar."
The former staffers are on trial accused of creating false records and transactions at Bernard Madoff Securities LLC until its implosion in 2008. Investors lost about $19 billion in the scam, prosecutors have said.
"He was a back-office employee in a broker-dealer business," Andrew Frisch said of his client Daniel Bonventre, 66. "Dan believed in Madoff, like so many others."
Madoff, 75, is serving a 150-year prison sentence after pleading guilty in 2009.
On Wednesday, prosecutors appealed to the jurors' common sense, saying Madoff could not possibly have pulled off his scheme, valued as high as $65 billion, without help.
Frisch, the first defense lawyer to make an opening statement on Thursday, said Madoff's employees were spellbound by "the all-knowing, grand master of Wall Street."
Frisch said the part of Madoff's business that conducted the fraud, called investment advisory, was walled off from the broker-dealer business in which he said Bonventre worked, where actual trades were made.
Only Madoff and his long-time deputy, Frank DiPascali, were in on the scam, said Frisch, who repeatedly impugned regulators for missing signs of the fraud.
DiPascali, who pleaded guilty, is expected to be a major government witness.
"DiPascali and Madoff told the pathological lies to regulators," said Frisch. "DiPascali and Madoff told the pathological lies to the same federal government prosecutors in this case."
Roland Riopelle, a lawyer for Annette Bongiorno, also said his client had no knowledge of fraud or intent to commit fraud.
"The government simply cannot prove that she knew there was a fraud and that she intended to hurt anyone," Riopelle said.
Bongiorno began working as Madoff's secretary at the age of 19, around 1968, and advanced to eventually manage customer accounts. She was a "young, naive high school graduate from Queens who felt she was working at a world-class organization," Riopelle said.
Bongiorno has no experience with the securities industry or its regulations, Riopelle said. She never controlled which securities would be bought, instead entering trades into account statements at Madoff's behest.
"All of those decisions were made by Madoff," whom Bongiorno saw as a hero, Riopelle said.
Riopelle also contrasted Bongiorno, who kept records and stayed at the firm immediately after its implosion, with DiPascali and others who have pleaded guilty, who Rioppelle said destroyed or stole documents.
"That was their reaction," Riopelle said. "Not to keep everything in a filing cabinet."
Opening statements by lawyers for the other employees continued on Thursday. They are former portfolio manager Joann Crupi and computer programmers Jerome O'Hara and George Perez.
The 12 jurors and eight alternate jurors generally appeared engaged, except for three, who dozed on Thursday morning, an ominous portent for a trial expected to tackle complex subjects over five months.
U.S. District Judge Laura Taylor Swain assured a juror whose daughter is marrying in March that she "will be walking your daughter down the aisle."
The case is USA v. O'Hara et al, U.S. District Court, Southern District of New York, No. 10-cr-0228.