Willful blindness is a concept in federal law that says you cannot make yourself willfully blind, that is, ignore, an obviously illegal situation you are involved in. And if you do, you do so at your peril. Consider the prosecution of Annette Bongiorno, the 66-year-old secretary of master Ponzi schemer and investment fraudster, Bernard Madoff. Bongiorno was a high school graduate with no skills other than shorthand and typing. She handled the books for hundreds of investment advisory accounts, most of them fraudulent. But, as she told a federal judge, she did what she was told by Madoff and didn’t know what was going on.
However, the judge determined that she should have known that her boss’s financial success was a sham. She was told to fabricate and backdate some fictitious trades, which she did on her boss’s orders. She claimed that she never figured out the truth of what was going on.
While this may be true, one cannot escape criminal liability by simply being an ostrich with one’s head in the sand, as she was. She was charged in federal court with conspiracy, securities fraud and other charges. As a secretary, she received a six-figure salary and bonuses. As the judge said, she was not a “coldly, calculating, knowing participant” in the fraud, but rather “…a pampered, compliant and grossly overpaid clerical worker.” She “willfully blinded herself” to the illegal acts she was being told to carry out. As evidence that she was not a knowing participant, she preserved incriminating records for years that she might have destroyed, suggesting that she did not understand the fraud.
But because this was a staggering $17 billion fraud, she faced life in prison. The prosecutors sought 20 years. However, a fair and thoughtful judge sentenced her to 6 years. While this is a far cry from what the prosecutors wanted, it’s still serious time. But as the judge stated, “She relied on Madoff’s blessing, rather than apply her good sense and moral compass.”