Madoff with the Money (28 page)

After knowing Bernie for so many years as a customer and sort of like a friend, although they never socialized outside of the store except for that one visit to New York that was strictly business, Neff said he “enjoyed telling people that Bernie Madoff was my go-to guy when I'd read some wild story about some malfeasance on Wall Street. I'd say to Bernie, ‘What about Joe Schmo? I can't believe what I read this week.' And Bernie would say, ‘I know. Can you believe that guy? How did he think he was going to get away with that?'”

Later, after Bernie's scheme became public, Neff discovered that a number of his store's customers were taken for a ride “big time,” as he put it. “There are so many horrible, horrible stories. I've talked to too many guys who have said to me, ‘You know, I can't start over again because I'm too old.'”

Ruth didn't fare as well as Bernie in Neff 's eyes.

“I thought she was a funny little creature,” he says, “kind of quirky, pleasant enough, but nowhere near as friendly as Bernie. She was kind of a zero.”

The very last time the Madoffs shopped at Trillion before Bernie was taken down, Ruth bought a $4,000 double-face cashmere (meaning cashmere on the outside
and
on the inside) little blue jacket, similar to a cardigan but actually a blazer. It had to be recut to her small size 4 because she always bought mediums.

“She liked to buy things big in size,” says Neff.

Then came the incident that dropped Neff 's jaw, the final straw in his Bernie and Ruth saga.

The first thing on Monday, December 15, 2008, after Bernie's arrest, Ruth Madoff placed a call to Trillion.

Recounts Neff:

There was, however, a postscript.

On that last visit to Trillion, Bernie had fallen in love with another pair of $2,000 slacks. Unfortunately, Neff had to tell one of his favorite five customers that his size wasn't in stock and that the garment had to be special ordered from Italy. By the time the pants arrived, Bernie had confessed to his Ponzi scheme and was under 24-hour house arrest. Neff immediately put Bernie's American Express Platinum card through the charge machine, not wanting to be stuck with his order. But the card had already been canceled. The slacks wound up back on the rack waiting for another customer with Bernie's fine taste to come along.

Before the plastic was canceled, the Madoffs had used it, or their corporate card, to charge a king's ransom of goodies. Bernie, Ruth, and other members of the family, as well as a few close associates at Madoff, had turned Bernard L. Madoff Investment Securities into their very own personal piggy bank of conspicuous consumption.

In early May 2009, the firm's corporate American Express statements for January 2008 and later were among numerous exhibits filed in U.S. Bankruptcy Court in New York by the trustee, Irving Picard. Picard had the job of pulling in Madoff assets to distribute to Bernie's thousands of victims. (By late spring 2009, he had recovered just over $1 billion, and was seeking close to another billion dollars—far less than the estimated $65 billion lost in Bernie's Ponzi scheme. Adding insult to injury, Picard was being faced with lawsuits from Madoff victims who didn't like the way he was deciding who got how much.)

In filing the credit card statements and other records, lawyers for Picard said that for many years Bernie's firm “was Bernie Madoff and Bernie Madoff was BLMIS, each the alter ego of the other. . . . The entanglement permitted Madoff, at his whim and desire, to engage in innumerable financial transactions wherein he essentially used BLMIS as his personal ‘piggy bank,' having BLMIS pay for his lavish lifestyle and that of his family. Madoff used BLMIS to siphon funds which were, in reality, other people's money, for his personal use and the benefit of his inner circle. Plain and simple, he stole it.” Those credit card statements are a mind-boggling snapshot of the Madoffs' lifestyle—very
fancy-schmancy
, as Bernie would say.

Besides Bernie and Ruth, the cardholders included Peter and Marion Madoff; Mark and Andy Madoff, and Andy's soon to be ex-wife, Deborah West Madoff; Peter's daughter, Shana; and Bernie's nephew, Charles Wiener. Among Bernie's loyal top lieutenants at Madoff who used the card were Frank DiPascali, Annette Bongiorno, and JoAnn Crupi. Even the captain of Madoff 's yacht, Richard Carroll, made charges.

Probably fearing a paper trail and detesting receipts unless they were from the SEC for delivered documents, Bernie showed no personal charges on the late 2007-2008 corporate card. More than likely, he probably paid for goods and services over the years with a personal credit card or with cash—there was plenty if it always available to him, though it belonged to others.

Ruth was another story. She charged thousands of dollars on the card. Ruth was the ultimate shop-til-you-drop obsessive.

“There's a scene in the mob movie
Goodfellas
where the mobster's wife asks him for some spending money to go shopping,” notes a close longtime Madoff family circle observer. “He asks her how much and she holds her thumb and forefinger about an inch apart.
That
was Ruth.”

Even after Bernie was behind bars, Ruth was out spending like there was no tomorrow, and she may have realized there was no future left as the scandal escalated and she came under scrutiny. Though Ruth wasn't in court standing by her man when Bernie pleaded guilty and was hauled off to jail to await formal sentencing, his mate of half a century was out shopping a week or so later, according to a longtime Madoff family friend who lost a bundle to Bernie.

Continues the friend:

Perhaps more interesting, Ruth had invoked marital privilege, meaning she would never have to testify against her husband if she didn't want to. The question remained, however, whether she would be formally brought into the case or would be considered simply an enabler—the little-woman-at-home bystander who never questioned how they got all those homes and boats and jewels and cars and all that other stuff they had.

The friend adds:

In the wake of that shopping sighting, Ruth was spotted enjoying Palm Beach with some friends—with a precious $7,500 Birken bag on her arm.

The evidence of Ruth's piggishness was in black and white.

Her charges on the Madoff corporate American Express Platinum card just for December 2007 through January 2008 totaled $29,887.94. The total Amex bill for that month for the Madoff clan was $100,121.99, paid in full.

In a one-day shopping spree in Paris she splurged at Armani ($2,000), Jil Sander ($1,237), and a shop called Marni ($555), and back at home her wardrobe bloomed with new things totaling almost $1,800 from Polo and the Diane Firsten boutique in Palm Beach. She charged $5,015 at the Montauk Yacht Club. She used the card for everything from mundane groceries at a Publix supermarket in Palm Beach to a fancy Manhattan shop specializing in “the world's best caviar.” There were movie tickets, wine, lots of prescriptions, purchases at Tiffany and Gracious Home, and hundreds of dollars over several weeks in dry cleaning. She even charged charitable contributions—$1,000 to Project Sunshine, $10,000 to the 92nd Street YM-YWHA, among others.

As a commenter on the
New York Times
DealBook blog observed, “This woman used the credit card to make charitable contributions. But it wasn't HER personal card . . . she was using stolen money to contribute to charities. And from whom was the money stolen? Other charities—at least in part. . . . ”

Because of her initial failure to show any sympathy or remorse for the Ponzi scheme victims and suspicions that she knew all along what her mate was up to, Ruth had become a pariah in the eyes of the American public, the wealthy circle she had run in, and especially the many investors who had once liked and trusted her.

Aside from being banned from coming to the beauty salon where every month or so for a decade she'd get foil highlights—Soft Baby Blonde, revealed the
New York Times
—done by a colorist whose hair work had been mentioned in fashion magazines, the Pierre Michel salon, also refused her request to do her hair in the privacy of her penthouse.

That wasn't the only place from which she was 86ed.

A florist in Amagansett in the chichi Hamptons, where the Madoffs had a spectacular beach home, refused to do business with her after the scandal broke. Every summer for years the florist had supplied flowers for the Madoffs' annual company beach bash.

Ruth had been a regular at a trendy Upper East Side gym—she liked to keep in shape for Bernie, knowing he had a roving eye and past dalliances—but she stopped going, possibly suddenly unable to afford the $1,200-a-month membership, or actually having been told not to show her face there, or even because Bernie was now locked away and she didn't have to worry about looking good for him. (A joke emanating from the Metropolitan Correctional Center was that obsessively clean and neat Bernie had been renamed “Susan” by other inmates.)

Bernie and Ruth frequently had dined together at fancy Upper East Side Italian restaurants where they walked in hand in hand from their penthouse. But after Bernie was taken down, the owners had a hands-off policy toward the inmate's mate. Marco Proietti, general manager of Bella Blu, didn't think he'd serve her because “People definitely think she knew what was going on . . . one of our customers lost $10 million.” Sette Mezzo was another chic Italian eatery where the Madoffs often dined. The general manager said he'd consider Ruth as a customer again—but only if she ponied up the $160 for the bill he was left holding after the Madoffs had dined there shortly before Bernie's arrest.

“She's perceived as the succubus to Bernie's incubus. She was inside a circle of people whose wealth has been sucked out of the system,” observed Richard A. Shweder, a professor of cultural anthropology at the University of Chicago, in a story in mid-June 2009 that the
New York Times
Sunday Styles headlined “The Loneliest Woman in New York.”

Not only was Ruth becoming lonely, but she was also experiencing a major lifestyle overhaul.

Ruth was a limo, town car, or worst-case scenario, taxi kind of girl, but the extent of how far she had fallen in the lifestyles of the rich and infamous food chain was graphically documented in the
New York Post
four days before Bernie's sentencing. There she was—in a color photo that practically filled page 3—the despised Madoff wife riding on the New York subway system's grungy F train, transport for the city that never sleeps commoners. Her green eyes covered by trendy aviator-style sunglasses, wearing a sporty outfit that included jeans and loafers, the wife of the most hated man in America was sitting under an advertising sign that trumpeted “99¢ Does More.” As the
Post
noted in its caption, the ad reflected “about how much her hubby left some victims.”

Spotting the photographer snapping her picture, Ruth snarled, “Are you having fun embarrassing me—and ruining my life?”

The
Post
headline blared: “The Ruth Hurts.”