NEW YORK (Bloomberg) — Daniel Bonventre, the ex-director of operations for Bernard Madoff, helped hide the diversion of $750 million from Madoff's investors to his brokerage, the US said in new criminal and civil complaints that claim even the legitimate trading business was propped up by fraud.

Bonventre yesterday became the sixth person charged in the largest ever US Ponzi scheme. Prosecutors and US regulators said he was a key aide to Frank DiPascali, the Madoff lieutenant who is helping the government unravel a fraud that cost investors as much as $65 billion.

"As Bernard Madoff's director of operations, Daniel Bonventre allegedly authored the fraudulent books that for years effectively hid the doomed state of an investment firm founded in fraud," US Attorney Preet Bharara in New York said in a statement.

Bonventre's arrest this morning by the Federal Bureau of Investigation follows charges against Madoff, DiPascali, Madoff accountant David Friehling, and two computer operators. Bonventre, who faces up to 77 years in prison, is scheduled to appear today in Manhattan federal court. He lived in Queens, New York, while working at Manhattan-based Bernard L. Madoff Investment Securities LLC.

Andrew Frisch, a lawyer for Bonventre, declined to comment.

"A fraud of this magnitude requires a coordinated effort," George Canellos, director of the Securities and Exchange Commission's New York office, said in a statement. "Bonventre played an essential part by creating bogus financial records to give BMIS the appearance of legitimacy, when in fact the firm lost money and could not have survived without the fraud."

Bonventre worked for Madoff from 1968 to 2008. He faces charges of conspiracy, securities fraud, falsifying books, making false filings with US regulators and filing false tax returns, prosecutors said.

In his guilty plea on March 12, Bernard Madoff said that the market-making and proprietary trading side of his firm was "legitimate." Peter Madoff was its chief compliance officer, while Madoff's sons, Andrew and Mark Madoff, were co-directors of trading. They have not been accused of criminal wrongdoing. John Wing, a lawyer for Peter Madoff, and a spokesman for Andrew and Mark Madoff didn't immediately return calls.

Bonventre directed that entries be made in the firm's general ledger that hid the scope of the investment advisory business and understated liabilities by billions of dollars, authorities said. From 1997 to 2008, more than $750 million in investor money was used to fund the market-making and proprietary trading operations, and records supervised by Bonventre didn't reflect the firm's liability to its investors, they said.

Bonventre is also accused of using $154 million from investor accounts as collateral for $145 million in loans from an unidentified bank to Madoff Securities, enabling Madoff to hide a severe liquidity crisis from November 2005 to June 2006, prosecutors said.

"During this same period, Bonventre monitored lines of credit, which BLMIS drew down by more than $340 million and used to meet" investor withdrawals, Bharara said.

Bonventre is accused of creating phony records to hide the source of payments to investors and of misleading the SEC. He backdated purported trades in his own account to pocket more than $1.8 million and lied to the Internal Revenue Service, prosecutors said.

In its complaint, the SEC said the market-making and proprietary trading operations didn't directly draw on investor funds. Instead, firm employees used three types of multi-step transactions to shift money from investor accounts to the firm's operating accounts, in most recent years pumping funds through a London affiliate, the SEC said.

Bonventre worked on one of those strategies from 1998 to 2005, and he improperly booked incoming money from all three as trading revenue and commissions, the SEC said. He knew, or was reckless in disregarding, that the money actually originated from investor accounts, the agency said.

The injections allowed the firm to report fiscal year profits every year between 2001 and 2008, and helped it weather the liquidity crisis, the agency said. If not for the $750 million, Madoff's brokerage would have broken federal capital requirements, requiring the firm to halt operations.