A former senior vice president at brokerage CDR Financial Products Inc. faced intense questioning from both the prosecution and the defense Tuesday morning in the second day of a municipal bond bid-rigging trial in New York.

Douglas Goldberg, who had taken the stand the previous afternoon, testified that he helped Steven Goldberg, no relation, an executive for General Electric Co. subsidiaries, manipulate bids.

Under direct questioning from U.S. Department of Justice prosecutor Antonia Hill, Douglas Goldberg explained how he manipulated bids to win muni bond contracts.

“I provided information about other bidders and let Steve reduce his initial bid,” Douglas Goldberg said.

He described bidding for a swap contract that involved the Allegheny County, Pa., Port Authority, in which he encouraged GE’s Goldberg to lower a bid from 5.04% to 5%, knowing GE would still win the bid. Douglas Goldberg said that Beverly Hills-based CDR received $57,400 in fees for a swap transaction about two weeks later, Douglas Goldberg testified.

Government prosecutors charge Steven Goldberg, Dominick Carollo and Peter Grimm — all three former executives of GE subsidiaries — with wire fraud and conspiracy. They allege the trio conspired with brokerages, including CDR, to fix contracts between August 1999 and September 2006.

Judge Harold Baer of the U.S. District Court for the Southern District of New York in Manhattan is hearing the case.

Hill, laying the groundwork for the government’s fraud case on Monday and Tuesday, played several audio tapes of conversations that featured the two Goldbergs and Stewart Wolmark, the former chief financial officer and managing director of CDR.

In one conversation with GE’s Goldberg, “I was standing next to Stewart,” Douglas Goldberg recalled. “I was in his office and I could tell him all the bids and give them to Steve.”

Other deals in which they collaborated, according to Douglas Goldberg, involved a multi-unit housing deal for the Florida Housing Finance Corp., a solid-waste disposal facility transaction for the Onondaga County Industrial Development Agency of Syracuse, N.Y., and a debt service reserve fund financing for the Port of Oakland, Calif.

Douglas Goldberg told Hill that he began to consider revealing his scheme as early as 2002, when he heard about an internal investigation.

“It kind of freaked me out,” he said. The government began investigating two years later and when it became a criminal probe in 2006, “that convinced me that I wanted to cooperate.”

He said he left the company in 2006 to open a Los Angeles municipal restructuring office for Deutsche Bank, but that Deutsche dismissed him in 2009 when he entered the plea bargain.

He pleaded guilty to three counts of fraud conspiracy in March 2010.

Steven Goldberg’s attorney, Daniel Gitner of New York’s Lankler Siffert & Wohl LLP, challenged Douglas Goldberg’s knowledge of Treasury regulations. The attorney also questioned his recollection of events that date as far back as 1999.

“You remember putting someone on hold 13 years ago? You have that kind of memory?” Gitner asked in relation to Goldberg’s recollection of the Florida deal, executed in 1999.

He also tried to draw out inconsistencies in testimony, saying that the witness, in an interview with federal prosecutors in 2009, said: “It’s nearly impossible to get a clean bid because all the players wanted to bid last.”

Asked about this on Tuesday, Douglas Goldberg told Gitner: “Not all, because there are a few who wouldn’t do it.”

Gitner also played tapes of conversations involving Stephen Goldberg, attempting to portray his client as a competitive banker. One recording had Goldberg, then with GE subsidiary FGIC Capital Market Services Inc., expressing concern that he couldn’t beat out American International Group Inc. for one contact.

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