Lipkin, 37, admitted on Monday night that he "worked to deceive auditors". He pleaded guilty to six criminal counts, including falsifying documents and bank fraud, in a hearing in Manhattan federal court. The plea was part of an agreement to co-operate with the US government in its investigation of the biggest Ponzi scheme in US history.
Madoff, 73, was arrested in December 2008 and is serving a 150-year sentence in a North Carolina prison.
Lipkin admitted that he had doctored documents to show nonexistent account holdings, added fake employees to the Madoff payroll and lied to get a construction loan. US district judge Laura Taylor Swain told Lipkin he could face up to 70 years in prison.
Lipkin, the ninth person to be charged with involvement in the fraud, was released on a $2.5m (£1.5m) bond pending his sentencing. He told the court that "I'd like to first apologise to my family, my friends and all the victims in the case."
A Ponzi scheme is a fraudulent investment scheme which pays out returns to early investors using money paid in by later investors.
Prosecutors have obtained guilty pleas from Madoff's former accountant, David Friehling, and a key Madoff associate, Frank DiPascali Jr, who faces as long as 125 years in prison. Five more former Madoff employees await trial before Swain, all of whom have pleaded not guilty.
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