Enrica Cotellessa-Pitz, a more-than-30-year employee of Bernard Madoff Investment Securities, was charged Monday by the SEC of falsifying internal accounting records at the firm to hide the fact that client money had been transferred to operating accounts to hide trading losses.
The agency also charged her with using the false data to construct statements used for the Securities and Exchange Commission and other regulators trying to review the firm’s business records.
The SEC complaint says that, after her promotion to controller in 1998, Cotellessa-Pitz followed instructions from Madoff and the firm’s director of operations, David Bonventre, to falsely account for the transfer of hundreds of millions of dollars in investor funds from client accounts into operating accounts, labeling them as adjustments to certain securities positions on Madoff Securities’ stock record.
The complaint also alleges that she then took these false data and used it to calculate and overstate the trading income purportedly generated by Madoff’s market-making and proprietary trading operations. Cotellessa-Pitz included these bogus figures on Madoff Securities financial statements, which she then filed with the SEC and other regulators.