The government's star witness in the criminal trial of five former Bernard Madoff employees is a lifelong liar whose "mind-boggling" history of falsehoods robs him of any credibility, a lawyer for one defendant told a federal jury on Thursday.
Larry Krantz, who represents computer programmer George Perez, said former Madoff lieutenant Frank DiPascali was a "con man's con man" who made a career out of deceiving regulators, customers and auditors.
"Perez was used, abused and manipulated by two of the greatest criminal masterminds of all time: Bernie Madoff and Frank DiPascali," he told jurors in Manhattan federal court.
Krantz was the first defence lawyer to deliver a closing statement in the five-month trial, after Assistant US Attorney John Zach finished his six-hour summation earlier on Thursday.
The five defendants are charged with helping perpetrate a massive Ponzi scheme at Madoff's investment firm.
In addition to Perez, they include another computer programmer, Jerome O'Hara; portfolio managers Annette Bongiorno and Joann Crupi; and the firm's operations director, Daniel Bonventre.
All five have argued that they were duped by Madoff into thinking the firm's investment advisory business was legitimate and only later found out that no trading took place in that unit.
Madoff himself is serving a 150-year prison sentence after pleading guilty to the scheme, which cost investors approximately US$17 billion ($20 billion) in principal losses when it collapsed in 2008.
Prosecutors have said Perez and O'Hara wrote computer programs that generated millions of false trading records to fool US Securities and Exchange Commission investigators and independent auditors.
Those programs included code that assigned random transaction numbers, time stamps and even banking counterparties to make the trading activity seem more real.
There could be no legitimate reason to create such code, Zach said in closing arguments earlier this week.
The programmers claim they were unaware those programs were being used to hide the fraud and eventually refused to write more code when they became uncomfortable about altering past statements.
In his closing arguments on Thursday, Krantz emphasised that "mere suspicion or discomfort" is not enough on its own to show that Perez had knowledge of the fraud, a necessary element for his conviction.
But Krantz also spent much of his time focused on DiPascali, who spent weeks testifying that all five defendants were complicit in a dizzying array of fraudulent activity.
He is one of several former Madoff employees who pleaded guilty and agreed to cooperate with the government in the hopes of receiving less prison time.
Krantz pointed out that DiPascali admitted under cross-examination that he had repeatedly lied to Perez and O'Hara about the nature of their work to ensure they would help him perpetuate the fraud.
"If they're in on the fraud, why on earth does Frank DiPascali have to lie over and over to get them to do his dirty work?" Krantz said.
"It makes no sense."
DiPascali, Krantz added, has lied under oath before, when he testified before the SEC regarding the firm's purported trading strategies. He also changed his story several times between his first meetings with government agents and his testimony at the trial, Krantz said.
"This is not a typical human being," Krantz told jurors in Manhattan federal court.
"This is a human being who lost a grasp of truth and falsity a long time ago."
Closing arguments are expected to last several more days.