They built software to create a fake history of the trading and also imitated certain software from other companies and regulators so the customer could check the trades were real. There is a decent book on Madoff called 'Wizard of Lies'
Yeah and knowing the programmer personally at the time I have no reason to believe he would not have known what he was helping to facilitate. Eventually the two programmers asked for their pay to be in diamonds like they were working for a James Bond villain and that is not how you do if you are ignorant of what they were doing.