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The Boston Globe

Business

Witness describes arrest as ‘Madoff Implodes’

NEW YORK — Bernard Madoff’s former right-hand man summed up his boss’s arrest exactly five years ago with two words: ‘‘Madoff Implodes.’’

The words in Frank DiPascali’s diary entry for Dec. 11, 2008, were shown to jurors Wednesday on the fifth anniversary of Madoff’s fall. The jurors are hearing evidence in the trial of five of Madoff’s former employees, who say the New York financier duped them all.

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Weeks of testimony in the only criminal trial to result from the collapse of Madoff’s once high-flying business culminated in the government’s star witness describing the final days of an epic fraud that cost thousands of investors nearly $20 billion.

On Tuesday, DiPascali told jurors that Madoff was crying when he revealed he was out of money more than a week before federal authorities learned the truth.

On Wednesday, DiPascali said Madoff followed up his Dec. 3, 2011, meeting with him by asking him to collect boxes of documents to shred. DiPascali said he put together more than two dozen boxes of documents as Madoff ‘‘very meticulously’’ went over a client list to identify employees and family members to whom he planned to disburse the nearly $300 million that remained.

DiPascali said he realized Madoff had digressed from his careful plan to notify immediate family only after consulting his attorney and destroying documents when his wife, Ruth, appeared stunned as she passed out gifts at the offices on the day of the company’s Christmas party, Dec. 10.

DiPascali said was home the next morning when his cellphone rang. Madoff was on the line. ‘‘Frank, the FBI is in the office with my brother,’’ he recalled Madoff telling him.

DiPascali said he expected to be arrested and began destroying more evidence, including smashing computer flash drives on the floor of his Bridgewater, N.J., home. He said he also tossed a gun he owned in a nearby waterway.

After meeting with his lawyer, DiPascali said, he decided to cooperate and tell the truth. He pleaded guilty to criminal charges in August 2009 that carry the potential for as many as 125 years in prison.

DiPascali’s testimony may have helped some defendants, since he conceded that he went to great lengths to shield employees from knowing about the fraud. He said he made up a story just days before the fraud was revealed to get information he needed from one defendant — Madoff’s former longtime secretary Annette Bongiorno — because he feared she would ‘‘jump out the window when she found out Bernie was out of money.’’

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