Madoff with the Money (7 page)

At school Bernie became Elliott Olin's shadow. Elliott was the most popular boy at P.S. 156, handsome with curly blond hair, and was considered a hunk by the girls. Everywhere Elliott went and everything Elliott did, Bernie followed suit. “They were like Martin and Lewis, always together,” observes Olin's widow, who from the time she first met Bernie thought of him as “a smooth talker” and “devious.”

Jay Portnoy observes that Bernie “was never really that much of a leader, but he was always
with
the leader—Olin.” He continues, “Elliott was good-looking, highly intelligent, willing to convince people to do things. Bernie was a follower, and the two of them seemed to work very well together.”

So the two became partners in a social enterprise.

In seventh grade, Bernie and Olin started a club called the Ravens, and even had sweaters made with a Raven on them. One had to be considered among the school's elite to be in the club. Jay Portnoy, who became a member, recalls that the club had a “reverse quota system.” Because the boys met at the Laurelton Jewish Center, the Ravens “always had to have one more Jew than non-Jew,” he said. “If a popular gentile was wanted as a member, they had to search for a usually less popular Jew to invite.”

Bernie liked sports, but he wasn't much of a player on the eighth-grade softball team. Portnoy, who kept statistics, recalled that in the season's first three games, Bernie had a batting average of .143, the lowest on the team. When Bernie saw the number, he angrily confronted Portnoy and demanded to know how well Portnoy himself had done at the plate. Portnoy acknowledged he was 0 for 5. When Bernie demanded to know why Portnoy hadn't listed himself as low man, he explained that the statistics covered only those with 10 at-bats.

“This answer did not make him happy,” Portnoy noted years later. “He felt that if someone was doing more poorly than he, it should be shown—or, better still, just don't show
anyone
with a batting average under .200. The incident showed that Bernie did not appreciate negative publicity.”

Bernie did a bit better on the basketball court. The eighth-grade team on which he played won the school championship. Bernie and Elliott Olin were the best players on the team, according to Portnoy, who supplied the popcorn for the fans.

Because his chum Olin was involved in so many school activities, Bernie joined in, too. He served as a monitor, essentially a crossing guard, and proudly wore a white Sam Brown belt that went across his right shoulder and around his waist. As a monitor he was part of a small group of boys who kept discipline in the schoolyard. Bernie also followed Elliott into the Boy Scouts of America—their troop met at the Jewish War Veterans building in Laurelton—and both stayed in scouting through high school.

Bernie had proudly taken the Boy Scout Oath the day he joined:

“On my honor I will do my best to do my duty to God and my country and to obey the Scout Law; To help other people at all times; To keep myself physically strong, mentally awake, and morally straight.”

The first scout law that Bernie pledged to uphold was trustworthiness:

“A scout tells the truth. He keeps his promises. Honesty is part of his code of conduct. People can depend on him.”

The Alperns—Saul, an accountant who had the demeanor of a college professor, and Sara, trained as a social worker, and their two pretty daughters, Ruth and Joan—moved to Laurelton from Brooklyn when Bernie was starting seventh grade and his future wife was beginning fifth grade.

Ruthie, blonde and green-eyed, had a sweet nature and a keen sense of style even at her young age. Immediately, she bonded with another neighborhood girl, Jane Silverstein, the equally blonde and cute daughter of a men's clothing manufacturer. Jane's father had chosen to move to Laurelton because it was on the train line to Penn Station, which was near his office in the garment district. Jane, whose family had also moved to Laurelton from Brooklyn, was a year older than Ruth and lived two blocks away. The only difference between Jane's cookie-cutter house and Ruth's was that the Alperns had a sunroom in back.

They were two very bright and pretty little girls whose lives would intertwine through the years.

The Silverstein girl, who lived on 227th Street, had gotten to know the Madoff boy, who lived on 228th Street, before Ruthie Alpern had moved to the neighborhood, on 229th Street. “Bernie was a year older,” she recalls,“and he came to visit with some boys to see this girl who lived down the block who was his age, and that's when I first met him. He was a popular kid, and he and Elliott Olin were very, very good friends.”

Ruth and Jane were good friends from fifth through eighth grade at P.S. 156.

“We were all part of a group. Ruth was a very likable girl who was smart, not bossy, and a good athlete.”

She also had a prescient sense of style. Few if any Laurelton girls were decorating their own rooms. But Ruthie Alpern had the ability, the creativity, and the family money to do it.

“Her mother actually gave Ruth a budget and she was allowed to decorate her own room, which was really forward thinking,” remembers Jane Silverstein Kavanau, Joe Kavanau's wife of some 50 years. “Ruth picked out nice things. She had very good taste, innate good taste. She always looked good.”

(Years later, as Mrs. Bernie Madoff, Ruth would be intimately involved in not only her husband's business affairs, but also in the decorating of their many fabulous properties.)

For several summers, the two girls, Ruthie and Jane, went to an eight-week camp together, and were bunkmates. “I had gone to the camp for many summers and somehow or other Ruth found it interesting because I was so enthusiastic about it,” says Jane Kavanau. “She spoke to her mother, and they met with the camp director and her parents decided to send her.”

The camp was not inexpensive, but the Alperns could well afford it. Saul Alpern had a knack for making money and generating clients. Down the road, he would become one of Bernie's unofficial first feeder funds.

During Ruth's first summer at coed Camp Adventure, on the shores of Great Pond in bucolic Ridgefield, Connecticut, she set her sights on a boy, but not just any boy. His name was Bobby Dworsky and he was the son of the camp's owners, Bill and Ida Dworsky. Ruth, who would next set her sights on the Madoff boy, knew instinctively back then that it was important to be with a powerful male; in this case it didn't hurt that as the owners' son, Bobby had the run of the place, and Ruth was able to benefit from his perks. Ruth and Bernie—they'd be known that way as a team throughout their lives together—had not yet set each other's hearts aflutter, so the Dworsky boy was Ruth's boyfriend at camp.

The girls' last summer together at camp was in 1954, beginning a slight hiatus in their relationship because Jane left P.S. 156 to commute to a private day school on Long Island called Woodmere Academy, where she'd complete her high school education and meet her future husband. They'd pick up again when both were young marrieds.

Bernie and Ruth, meanwhile, had seen each other around P.S. 156, but being two years younger, she wasn't of much interest to him romantically. He had also gotten to know her because their fathers had become friends—their talk about money and how to make it being one of Saul Alpern's and Ralph Madoff 's mutual interests.

Unlike many of the other Jewish and Italian girls at P.S. 156 who possessed stereotypically ethnic features, the Alpern girl had a blonde, WASPy look about her—the flaxen hair, fair skin, and green eyes. In today's world she'd probably be an Abercrombie & Fitch or Ralph Lauren girl, but with one big difference—an identifiable Queens accent. She looked nothing like either of her parents, neither of whom were especially attractive. Ruth's older sister, Joan, was pretty, but not on a par with her sibling.

Jane Kavanau remembers a day when she and Ruthie went to buy some candy at Hamils on Merrick Road, and the proprietor was shocked—
shocked
—to learn she wasn't a gentile because of her goyish look.

“The person who owned the candy store asked her, ‘
Why
are you wearing
that
?,' pointing to the little gold Star of David she wore on a delicate chain around her neck. So Ruth said, ‘What do you mean?' He said, ‘Why are you wearing that Jewish star?' And Ruth said, ‘Why shouldn't I?' He said, ‘But you're
not
Jewish!' But she was of course.”

Years later, remembering those days, Kavanau notes that Ruth Alpern “looked like a shiksa. She did, absolutely. I did also but not as extremely shiksa-looking. Ruth and I used to mix our blonde hair together and you couldn't tell whose hair was whose. We used to kid around. We had long hair and we would make ponytails and mix them together and they'd all look the same color.”

Ruth had several attributes going for her when she and Bernie started seriously dating when she was a freshman in the class of 1958 at Far Rockaway High School and Bernie was a junior. She had the shiksa look, but was Jewish; she was very social and outgoing, which was the opposite of him; she had a fashionista's sense of style—very preppy; and her father, Saul, was a shrewd and creative accountant who always had his eye on the dollar. Beyond that, Ruth herself was bright, and was a whiz at one particular subject in school. And that subject was math. She knew her numbers and how to work them.

Ruthie Alpern had all the right stuff for a fast-track operator like Bernie Madoff, who had dreams of becoming a Master of the Universe in the gilded canyons of Wall Street.

Bernie Madoff had a choice of two public high schools after graduating from P.S. 156 in June 1952—Andrew Jackson or Far Rockaway, both of which were in the Laurelton district. With his mediocre grades, he never would have made the cut for the elite public secondary schools such as the Bronx High School of Science, or Brooklyn Technical, where his brother, Peter, would be accepted.

Bernie chose Far Rockaway primarily because it attracted a relatively affluent, fast-track crowd. The other option, Andrew Jackson in St. Albans, Queens, was garnering a reputation as a
Blackboard Jungle
sort of school.

As Jay Portnoy, who commuted on the 20-minute train ride to Far Rockaway with Bernie and Elliott Olin, observed, “St. Albans was becoming New York City's first suburban American black area,” drawing kids from poor neighborhoods, “which scared many of Laurelton's liberal Jewish parents.”

However, many of those same parents, like Ruth's, had low-paid black maids—
schwartzes
, they called them—working either full-time or part-time in their homes.

“They were bringing young girls, young black women up from the South to work in the houses,” says former Laureltonian Marion Dickstein Sherman, a doctor's daughter, whose family had a live-in black maid. Sherman, who was a classmate and sorority sister of Ruth's, observes, “Andrew Jackson was getting a little scary. It was low-income, scary black.” But she points out that the decision for her to go to Far Rockaway had nothing to do with any form of discrimination, just perceived danger. “That was the feeling.”

Bernie's four years at Far Rockaway were for the most part uneventful, except for his social climbing.

Just like he bonded with popular Elliott Olin at P.S. 156, the likable kid from Laurelton began rubbing shoulders in high school with rich kids from the more affluent Rockaway Peninsula oceanfront communities of Neponsit and Belle Harbor. Bernie appeared to have a preternatural ability to move in moneyed circles even in his youth.

Money, and making it, was the gospel he had heard at home from his parents. Their indoctrination had taken hold. Bernie knew that to be a success he needed to move among the affluent.

In that well-to-do Far Rockaway crowd, he became close friends with Cynthia Greenberger and her high school steady and future husband Michael Lieberbaum, an honor student in math. Greenberger's wealthy family would later invest big money with Bernie when he started his company right out of college, and they would lose big money in his Ponzi scheme. At the same time, Lieberbaum's father, who became incredibly wealthy virtually overnight as a stockbroker, would play a key—and very questionable—role in generating business for Bernie in his early days.

At Far Rockaway High, Bernie was laying the groundwork—dotting the i's and crossing the t's, as it were—for his future.

One thing was for certain, though: He wasn't an academic wizard. Bernie's high school performance was unexceptional, and at best he was a C student.

“Bernie was not the brightest bulb,” recalls Far Rockaway classmate Mike Gandin, who became an attorney and a Madoff victim.