Jerome O'Hara and George Perez provided the technical support necessary to produce false documents and trading records, and took hush money to help keep the scheme going, alleges the SEC in a complaint filed in US District Court for the Southern District of New York.

According to the complaint, Madoff and his lieutenant Frank DiPascali regularly asked Bernard L Madoff Investment Securities (BMIS) programmers O'Hara and Perez to help create records that, among other things, combined actual positions and activity from the firm' market-making and proprietary trading businesses with the fictional balances maintained in investor accounts.

The men are accused of writing programs that generated thousands of pages of fake trade blotters, stock records, Depository Trust Corporation reports and other phantom books and records to substantiate non-existent trading.

George Canellos, director, New York regional office, SEC, says: "Without the help of O'Hara and Perez, the Madoff fraud would not have been possible. They used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff's scheme for so many years."

The SEC says a separate computer internally known as "House 17" was used to process BMIS investment advisory account data at the direction of Madoff, DiPascali and others.

O'Hara and Perez knew that House 17 was missing a host of functioning programs necessary for actual securities trading and reporting and that the trades being entered into House 17 and the account statements and confirmations being sent to investors did not reflect actual trades.

It is alleged that the men had a "crisis of conscience" in 2006 and tried to cover their tracks by attempting to delete approximately 218 of the 225 special programs from the House 17 computer although they failed to wipe monthly backup tapes.

After cashing out hundreds of thousands of dollars each from their personal BMIS accounts they confronted Madoff, refusing to generate any more fabricated books and records.

Madoff responded by telling DiPascali to offer O'Hara and Perez as much money as necessary to keep quiet and not expose the misrepresentations, claims the SEC. The men agreed to keep quiet for a salary increase of nearly 25% along with one-time bonuses in late 2006 of more than $60,000 each.

They were then convinced by DiPascal to modify computer programs so that he and other 17th floor employees could create the necessary reports themselves.

Madoff is serving a 150-year prison sentence for the fraud, which is estimated to total as much as $170 billion. DiPascali has pleaded guilty and is awaiting sentencing.