Defense: Case against 3 alleged Madoff employees mired in 'blob' of potential evidence

The case against a former executive and two computer programmers charged with cooking the books for disgraced financier Bernard Madoff has been bogged down by a mountain of potential evidence, their lawyers said Monday.

"We have this overwhelming volume of material," defense attorney Larry Krantz told a judge at a pretrial hearing in federal court in Manhattan. "We're talking about millions and millions of documents."

Another attorney, Gordon Mehler, called the evidence a "massive, amorphous blob that's almost impossible to get a handle on."

The documents, dating to at least the early 1990s, were seized from Madoff's offices shortly after his epic scheme collapsed in 2009.

Former operations chief Daniel Bonventre, who ran the back office of Madoff's firm for more than 30 years, was arrested this year on securities and tax fraud charges.

Prosecutors and the Securities and Exchange Commission have alleged Bonventre knew that the billions of dollars Madoff was collecting from investors were not being used to buy securities, and that he falsified records to hide the scheme.

The SEC says Bonventre cashed in on the fraud by taking $1.9 million in profit from bogus backdated trades that had not occurred. A criminal complaint also accused him of failing to report hundreds of thousands of dollars in income to the IRS.

The 63-year-old Bonventre is charged along with Jerome O'Hara and George Perez. The pair are accused of programming an old IBM computer to churn out account statements for unsuspecting clients that showed phony returns.

Bonventre, O'Hara, 47, and Perez, 44, have pleaded not guilty. All are free on bail.

The documents are so voluminous that prosecutors have sought to organize them by creating a computer database showing where and when they were seized, Assistant U.S. Attorney Lisa Baroni said Monday. She said the government had offered to give the defense team "a tutorial on how to search the database."

U.S. District Judge Laura Taylor Swain told both sides to return to court Nov. 5 to check on their progress.

Madoff, 72, is serving a 150-year prison sentence after admitting that he operated a Ponzi scheme for at least two decades. He admitted cheating thousands of individuals, charities, celebrities and institutional investors out of billions.