If you saw the 6 o'clock news last night, you know Bernie's right hand man, Frank DiPascali, pled guilty yesterday to fraud charges that could send him away for 125 years. DiPascali was hauled off to jail on the spot despite protestations from both prosecutors and defense lawyers who wanted DiPascali to remain free on bail until he is sentenced in May 2009.

After reading the criminal information (a description of the crimes prepared by the US attorney), it's obvious Frank DiPascali should have been making a lot more than $3 million a year. This guy was a creative dynamo and a self-starter who did a lot more than generate a few thousand phony account statements every month, DiPascali was an indispensable part of Bernie's Ponzi scheme and Bernie couldn't have carried it off without him.

DiPascali's efforts puts "Crazy Eddie" Antar's antics to shame. Tino De Angelis of salad oil fame was one of the best but he was nowhere near this good. DiPascali's almost flawless execution of Bernie's Ponzi scheme for thirty years will be the gold standard by which every other fraud will be measured for years to come.

DiPascali helped develop Bernie's infamous "split strike conversion strategy" which was never employed in real life. The strategy was a fiction created in the early '90s by Bernie and Frank (and who knows who else ) to justify Bernie's consistent success in the market and lure in new investors. For almost twenty years, "SSC" was Bernie's signature trademark and, as a marketing tool, it was invaluable.

DiPascali ran a tight ship on the 17th floor and his apparently very loyal crew helped him produce whatever documents he needed. But their relationship went further than that.

The SEC civil complaint filed against Dipascali described how Bernie and Frank set up a phantom computer trading platform on the 17th floor. In the event they ever had surprise visitors looking to confirm real time trading activity, one employee was instructed to enter trades on a computer screen while another employee went to a computer in another room and pretended to be the European counterparty to these trades. DiPascali periodically conducted drills to make sure the plan would work.

The elaborate and copious documentation generated to fool the SEC alone was worth a few million to Bernie. I can just imagine how many late-nighters DiPascali and his team had to pull to get their ducks in a row.

One bit of Madoff fiction was cleared up yesterday. The checks that were in Bernie's desk drawer when he was arrested were not bonus checks. After Bernie informed DiPascali the ship was going down, DiPascali and his crew prepared a list of employees and friends who had accounts with Madoff and checks were drawn in the amount of the account balances.

DiPascali and his crew were somewhat naive to think that their plan would work and I suspect Bernie went along with it to humor them, knowing the checks would never be distributed. As soon as Mark and Andrew Madoff heard about the them, they lawyered up.

In the months to come, DiPascali's co-conspirators will be indicted and we'll find out which investors knew or should have known Bernie was a fraud. Bit it's too bad we can't hear DiPascali describe in his own words what it was like going to work every day, knowing he was committing a crime that could send him to prison for the rest of his life.

Worth more than $3 million a year, imho.