Enrica Cotellessa-Pitz, longtime Bernie Madoff controller, pleaded guilty to 4 criminal counts at a hearing in Manhattan federal court, admitting she created phony stock records, made false entries in the firm’s general ledgers and filed untrue reports with regulators.  In a related but separate action, the SEC has charged Cotellessa-Pitz, with falsifying books and records in order to hide Madoff’s fraudulent investment advisory operations from regulators. Criminal Charges: Cotellessa-Pitz pleaded guilty to conspiracy, falsifying books and records of a broker-dealer, falsifying books and records of an investment advisor and making false filings with the SEC. “Although I now know the crimes I committed helped to cover up and perpetuate Bernard Madoff’s fraud, at the time I did not know that Madoff and others were stealing investors’ money,” she told U.S District Judge Laura Taylor Swain at the plea hearing. Cotellessa-Pitz faces as long as 50 years in prison when she’s sentenced, and a forfeiture of $97.3 billion. Assistant U.S. Attorney Lisa Baroni told Swain that Cotellessa-Pitz has been working with the government to unravel the Madoff fraud for “quite a long time now.” The SEC Complaint: The SEC alleges that Enrica Cotellessa-Pitz, who worked at Bernard L. Madoff Investment Securities for more than 30 years, assisted in falsifying BMIS’s internal accounting records in order to misclassify hundreds of millions of dollars of income purportedly generated by BMIS’s investment advisory operations. Cotellessa-Pitz also falsified financial statements filed with the SEC and other regulators as well as materials that were prepared to deceive SEC staff examiners, federal and state tax auditors, and other external reviewers. The SEC alleges that Madoff instructed employees to transfer hundreds of millions of dollars from bank accounts holding investor funds to the firm’s operating bank accounts. Madoff’s goal was as simple as it was misleading – to use stolen investor funds to hide the significant losses incurred by BMIS’s market-making and proprietary trading operations. Cotellessa-Pitz joined this effort after she was promoted to controller at the firm in 1998, when Madoff and BMIS’s Director of Operations David Bonventre instructed her to falsely account for these transfers of investor funds as adjustments to certain securities positions on BMIS’s stock record. According to the SEC’s complaint, Cotellessa-Pitz then used these figures 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 BMIS financial statements, which she then filed with the SEC and other regulators. Cotellessa-Pitz and other BMIS personnel then falsified documents provided to regulators to obscure the firm’s advisory operations and the transfer of investor funds to the operating bank accounts. The SEC previously charged BMIS’s Director of Operations David Bonventre with falsifying books and records to hide and obfuscate Madoff’s advisory operations.[Bloomberg, SEC 12/20/11]