One of Bernard Madoff's longest-serving colleagues will plead guilty to fraud Monday and tell a court that his ex-boss's crimes began two decades earlier than Madoff has claimed.

David Kugel, who joined the Madoff firm as a trader in 1970, is cooperating with US authorities as they continue their investigation into the $65bn Ponzi scheme. He is expected to plead guilty to conspiring to defraud investors in the hope of receiving a lighter sentence.

In a letter to the judge, justice department prosecutors said Kugel will admit conspiring in Madoff's fraud "beginning in the early 1970s through December 2008 to commit securities fraud, falsify records of a broker dealer, and falsify records of an investment adviser."

Kugel's testimony will contradict Madoff's assertions that the fraud scheme started in the early 1990s as the recession made it increasingly difficult for him to make the returns he had promised his clients. It will also further question Madoff's claims that he acted alone and put pressure on other executives now fighting charges that they were involved in the scam.

Kugel was a supervisory trader in the proprietary trading operation of Bernard L. Madoff Investment Securities. He made more than $8m working for Madoff, according to court papers, and together with his family pocketed more than $13m in profits after investing $25,000 with the fraudster in 1977, according to Irving Picard, the trustee appointed to oversee the recovery of Madoff funds.

Madoff, currently serving 150 years in jail for coordinating the fraud, has consistently maintained that his crimes did not begin until 1992. He has also refused to cooperate with the authorities and maintained that he acted alone. Kugel faces up to 85 years in jail for his part in the scheme but his cooperation could cut that sentence.

Last November Picard sued Kugel for $22m claiming Kugel "played a critical role" in the fraud. Picard said that while Kugel "may or may not have been the mastermind" behind the fraudulent scheme, at the heart of Madoff's crimes "there is no doubt about his role in carrying out the fraud."

Kugel's cooperation and his claim that the fraud goes back to the 1970s will add further pressure on Peter Madoff, Bernard's younger brother and the subject of a separate inquiry. Peter Madoff had worked with his brother since at least 1970, when he left law school.

Picard is seeking to recover at least $226.4m from several Madoff family members including Peter, Bernard Madoff's son Andrew and the estate of Madoff's late son Mark.

Kugel would be the fifth former Madoff executive, including Madoff, to

plead guilty to participating in the fraud. Five other former Madoff

employees, include Daniel Bonventre, the firm's former chief of

operations, have denied charges that they were co-conspirators and are

awaiting trial.

Like Kugel, Bonventre was a long-time Madoff employee and joined the

firm in 1968. He served as its director of operations, overseeing the

back-office record-keeping staff since at least 1978.