Jo Ann
Former employee of Bernie Madoff, Jo Ann "Jodi" Crupi, is accused of taking cruises and trips to Las Vegas and Disney World on the firm's expenses (Reuters)

Members of convicted fraudster Bernard Madoff's inner circle enjoyed excessive and lavish lifestyles paid for by the investment firm, according to US prosecutors.

The allegations come during the trial of five former long-time Madoff associates who are accused of creating false records and transactions at Bernard Madoff Securities LLC, the firm at the centre of the largest Ponzi scheme in history, which collapsed in 2008.

The court heard that some of the ex-employees indulged in expensive wine, cruises and trips to Las Vegas.

The expenses were listed on the corporate credit card statement of portfolio manager Joann Crupi and the personal credit card statements for Daniel Bonventre, accused of helping Madoff pull off a fraud that cost investors an estimated $19bn (£11bn, €13bn).

John Zach, assistant US attorney, showed jurors Crupi's corporate credit card statements from 2004 through 2008, noting that she took cruises and trips to Las Vegas and Disney World with family members and frequently spent hundreds of dollars on wine at Wine Library in Springfield, New Jersey.

Zach asked witness Charlene White, a former employee at Bernard Madoff Securities LLC, whether she observed any behaviour by Crupi that would have explained the expenditures as legitimate business expenses.

"In November of 2005 ... did you observe Ms. Crupi passing out almost $2,000 of wine for a Thanksgiving celebration?" Zach asked White.

Zach likewise asked White if events at work could explain the cruises or trips to Las Vegas.

"No," said White, who began working at Madoff's firm in 1993.

Crupi's lawyer, Eric Breslin, objected several times to Zach's questioning of White, the second witness to testify in a trial expected to last as long as five months.

White, a former data entry worker, was not in a position to know what was a legitimate business expense and what was not, Breslin told US District Judge Laura Taylor Swain.

Swain ruled that Zach could continue to ask her if she observed wine from Crupi in the office, but not whether the expenses were legitimate.

In addition to Crupi, the defendants include Daniel Bonventre, the director of operations for the firm, Annette Bongiorno, another portfolio manager; and Jerome O'Hara and George Perez, two computer programmers.

All five pleaded not guilty and their lawyers have said they did not know about Madoff's scheme or were merely puppets under Madoff's spell.

Madoff's employees were mesmerised by "the all-knowing, grand master of Wall Street," said Andrew Frisch, a lawyer for Bonventre.