Read The Madoff Chronicles: Inside the Secret World of Bernie and Ruth Online

Authors: Brian Ross

Tags: #General, #Swindlers and Swindling, #Business, #Ponzi Schemes, #Capitalists and Financiers, #Criminals & Outlaws, #Commercial Crimes, #Biography & Autobiography

The Madoff Chronicles: Inside the Secret World of Bernie and Ruth (10 page)

BOOK: The Madoff Chronicles: Inside the Secret World of Bernie and Ruth
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Branch chief Meaghan Cheung, who had expressed such contempt for Markopolos, signed off on the closing narrative along with the staff attorney who reported to her and the district administrator to whom she reported.

The SEC did find that Madoff had violated requirements that he register as an investment adviser. But that was a minor issue to the SEC, and it was resolved with “discussions” between Madoff and the staff that led Madoff to formally register as an investment adviser.

Madoff was pleasantly surprised when the SEC investigators closed the case after finding “no evidence of fraud.” From Madoff’s point of view, the incompetence of the SEC had once again kept him in business. Many of those same SEC investigators would be ordered back to the Madoff offices early on the morning of December 12. Madoff was under arrest in what the government was now calling the “world’s biggest Ponzi scheme.” Just as Markopolos had said so many times over so many years earlier.

“I recognized them from when they were here before,” recalled Eleanor. “They had their heads down and had kind of that hangdog look.”

“Clearly, the SEC failed as it has failed here in the past,” said Massachusetts secretary of state Galvin. “If you were looking for a summary of why we have so many problems in our financial services sector, there it is.”

Galvin, a Democrat, pointed to a culture in Washington during the Clinton and Bush administrations in which government tried to be “partners” with the industries it regulated. “The philosophy that was prevalent at the time which was somehow, government was in the way, we really didn’t need any regulation, we were holding back our economy if we continued to do that, that was a fraud too.”

CHAPTER
SEVEN
 
Eleanor
 

ELEANOR SQUILLARI ADORED BERNIE MADOFF IN EVERY WAY
.

Even after the arrest, his secretary of twenty-five years was comfortable describing her feelings.

“I loved Bernie,” she said in tears. “I did. I did.”

Since the arrest and the revelation that he was a crook, however, she has come to feel a sense of betrayal and great anger. She is a woman scorned.

“I guess you could say he used me,” she said with a sigh. “I knew a certain side of Bernie that I cared about. I thought he was a great guy.”

Eleanor started working for Madoff in 1984, at the age of thirty-three. A tall, shapely, attractive brunette with an infectious laugh, she was a divorced mom raising a daughter and son.

“She was a looker,” recalled Little Rick, the office messenger who was sometimes dispatched by Madoff to pick up marijuana in Spanish Harlem.

Eleanor started as the main receptionist when Bernard L. Madoff Investment Securities was still located at 110 Wall Street. Former employees say it was a place of fast-talking dealers and back-office workers who drank and partied hard, used lots of drugs, and liked to have sex on the boss’s sofa with whomever they could find for the night.

After a brief stint working with the traders, Eleanor took over as the secretary for Bernie and his brother, Peter. “They were funny, they were smart. I thought they were good-looking and that they had their act together.”

She also saw an intense sibling rivalry. “They fought all the time. Bernie would always set the rules and always had the last say. And Peter would follow.”

Eleanor took great pride in her work. She made sure to be one of the first people in every morning, leaving her house on Staten Island at 5:40 a.m. to catch the X30 express bus or the ferry across the harbor for the hour-long trip to the office in Manhattan.

Like generations of women from Staten Island who have crossed the harbor every morning before dawn to work as secretaries for the city’s powerful lawyers and financial titans, Eleanor was a power behind the throne at the Madoff firm. Her position as the boss’s secretary meant she was the gatekeeper for anyone who needed time with Bernie. She ran his schedule, fielded the phone calls he didn’t want to deal with, and kept his secrets—or at least the ones he chose to share with her. The “wild men” in the back office were careful about trying to hit on the boss’s secretary.

Madoff could be a difficult boss, whose needling, crude jokes and insulting comments were unrelenting. He would come out of the men’s room with his zipper down, and when Eleanor rolled her eyes, “he would say ‘Oh, come on, you know you want it.’” He wouldn’t hesitate to tell her to “shut up” or suggest she was being paid too much.

In her early days there, she said, Bernie would feel free to pinch or pat the behinds of women in the office.

“In the beginning, I was much younger, and if he would be insulting, I would take it personally,” recalled Eleanor. “He seemed to be somebody who liked to insult you.” She is not a shy person and she soon felt comfortable enough to fire back. “‘You know, you really shouldn’t be talking to me like that.’ He would pay attention to that and he would stop for maybe two weeks. And then he would go back to it.”

They developed an easy, familiar relationship that allowed him to abuse her, with her tacit permission. “He knew that when he was under a lot of pressure he could yell at me, he could snap at me. When we were alone, I’d say, you know, you don’t talk to people that way. We had that kind of relationship where he would listen.” She knew there was no chance he would fire her. “He goes, I can’t fire you; he goes, look how long you’ve been my secretary, people would believe you if you said something about me. So then I knew I could say whatever I wanted.”

She was the office wife. Her salary was close to $80,000 a year, with a yearly bonus of almost $20,000. It was very good money for not a lot of work. Sometimes, Eleanor spent hours shopping online from her desk computer. When Bernie decided to cut off e-mails after the SEC asked questions about an e-mail from one Madoff employee, Eleanor successfully lobbied to have her connection restored. Increasingly, she was Bernie’s eyes and ears when he spent weeks away in Florida or France. From her perch on the sleek nineteenth floor, in front of Bernie’s glass-walled office, life looked very good to Eleanor, who learned to ignore Bernie’s ugly side. “We thought we were working for this wonderful man. I loved my job and I loved the people that I worked with. And I was able to give my children everything that they needed.”

There were always plenty of rumors around the office about Bernie’s relationship with a long list of attractive women employees. They talked about the blonde on the trading floor, and how Bernie was said to have paid for her apartment, where he visited her regularly. There was talk of a brunette, much younger than Bernie, who was abruptly dispatched to London. There was talk about his first secretary, Annette Bongiorno, who would become a multimillionaire and an alleged partner in his crimes. There were the escort service women and the professional masseuses. And there was even office gossip about Eleanor. She was included on two trips to ski resorts that Bernie organized for the staff. He gave her two photographic portraits of him to hang over her bed. “I did not hang them above my bed, that’s for damn sure,” said Eleanor. She stored the portraits in a closet. “I don’t leave here thinking about you,” she said she often reminded him. “So if he was under that illusion, I told him to get over it. And he said, ‘Really?’ and I said, ‘Really.’”

“I’m not going there,” she said when asked directly about rumors that she had an affair with Bernie. “There are much more important things to know about Bernie.”

And since his arrest, no one has been more vocal or done more to make sure that everything else about Bernie, apart from the office gossip, is made known.

He stole from clients Eleanor came to know personally. He was ready to steal from her. “When my father passed away, I was a young single mom with two children. He took my money. He knew what he was doing. And you know, when he hired me he said, if you’re loyal, he said, and you work hard, you’ll go far. We’ll take care of you. That was a lie. And I believed it.”

Eleanor felt that even her presence outside his office for so many years had played a role in perpetuating Bernie’s fraud. “Part of the setup was that Bernie was able to say—and he loved to say—that ‘Eleanor has been my secretary for twenty years. We don’t have a big turnover; everybody here has been here forever.’ Well that made the firm look very stable.” She had no idea of the scam taking place two floors below her desk, on the seventeenth floor.

On the day of the arrest, she refused to believe her boss could have done anything illegal.

“Oh my God, you know, somebody’s framing him. So I put a call in to his house, because he had to be there and I left a message and told him that I loved him.”

It was when he called back twenty minutes later that she realized the painful truth. “I hung up the phone and I didn’t want to admit it to anyone. I was still in the protective mode, I was still trying to protect him, and then I started to realize that this is what he had done. And I went home and I couldn’t get out of bed Saturday because I knew. I knew.”

Once she realized “he was a horrible person,” she was heartbroken. “And then I started to get angry, I started to get really angry.”

Anger and tears turned to action. She had to do something. Eleanor, essentially, opened her own investigation into her former boss. “I was looking at everything in a different light now.” She wrote a first-person account of life as Bernie Madoff’s secretary for
Vanity Fair
, which, according to someone at
Vanity Fair
, paid her at least $50,000. She made copies of every document she could find in the office and turned them over to the FBI. She recovered a two-foot- tall stack of documents copied directly from Madoff’s filing cabinet and desk. These documents include spreadsheets, calendars, master phone lists, and legal bills.

“I was going to give it a shot because there had to be something in my files, in my drawers, anything. There had to be something. And I said, all right, here’s a pattern. I did files on travel. I did files on calendars. I did files on people who may be of interest. I didn’t know what I was doing, but I was doing it.”

Among the most interesting documents Eleanor gave to the FBI was a copy of Madoff’s expensive goatskin Hermès address book, the “little black book” that is a who’s who of people Madoff considered his “most important contacts,” with numbers for the office, home, and cell. After each name and number Eleanor jotted down what she knew about the person and his or her relationship with Madoff.

In addition to the masseuses, escort service women, and the prominent SEC official already mentioned, there are dozens of other names that have provided important investigative leads to the FBI and other government agencies.

The first name listed is Annette Bongiorno, under A. Frank DiPascali is under D. David Friehling, Bernie’s accountant at the strip mall in upstate New York, is listed. Bernie also included Dick Carroll, his longtime boat captain in Palm Beach, as well as the people who took care of his villa and yacht in France.

Many of his biggest clients—who were also his biggest victims—are in the book. These include Fred Wilpon, the owner of the New York Mets, who Eleanor says was much closer to the Madoff family than he has publicly acknowledged. Wilpon’s son, Jeff, who now runs the Mets, was a close friend of Madoff’s son Mark. Eleanor said that Mark arranged for one of Wilpon’s girlfriends to work at the Madoff offices.

Also in the book are Swiss bankers, Spanish bankers, and British bankers. So are the so-called feeders and the hedge fund operators who billed huge fees for steering billions of dollars to Madoff with barely a second glance.

In addition to providing these documents, Eleanor’s encyclopedic knowledge of names and numbers in the Madoff world and her memories of random events and meetings have provided other important leads to the FBI. “One thing the FBI said to me when we first started talking is, can you remember anything out of place or odd?”

For example, she recalls three different people who received regular cash payments from Madoff, in unmarked envelopes.

One of them, now deceased, lived in London, and Eleanor says she was often instructed to mail him a large stack of bills in U.S. currency. In an office that was regularly cutting checks and wiring hundreds of millions of dollars to people around the world, this person received his payments in cash. “I look at it now and I go, oh my God. I was really stupid, but I didn’t think about it.”

The two other cash recipients picked up their payments from Eleanor in person at the Madoff offices. One of them was an elderly woman who Eleanor believes was an eccentric client who “had a thing” about getting cash. The other person, however, had Eleanor’s investigative instincts working overtime. He received regular cash payments stuffed into a white envelope. She has provided his name to the FBI and describes him as someone very close to Madoff who is connected to a major Wall Street brokerage firm. The person and his wife remain close to Ruth Madoff. Was he in on the scheme? Was he a bagman paying off a corrupt official? Or was he just another client with an idiosyncratic need for cash instead of a check? Eleanor does not know, but she wants anyone involved in Madoff’s scam, even onetime friends, to get caught and pay a price.

“People made the wrong choices. They’re gonna be made examples of. It is very unfortunate. They all have families.”

In the days after Bernie’s arrest and the exposure of his Ponzi scheme, Eleanor says she was traumatized from handling the phone calls of cheated investors.

“I’m haunted by these people. I don’t sleep well. I’m just haunted by it, I can’t get over it. It was all the voices that I heard. I always used to get phone calls, gee, do you think Bernie will consider having, you know, my brother-in-law come in, or my neighbor, or this one or that one. So not only did they lose their money, now they have to live with the guilt of bringing in all the people they cared about.”

As the encyclopedia of Madoff, Eleanor was relied on heavily by the FBI to figure out who was who and how they were related. She knew the family tree, and she continued to report to work every day until March, when she told the agents she was being paid by
Vanity Fair
for her story. She was told she could no longer stay in the office, but the agents continued to call her with questions.

Other than Bernie and Ruth, Eleanor has become the best known figure in the Madoff scandal. She has received praise from many of her former colleagues for speaking out, including from Madoff’s son Andy, who told her he thought she had written a good article. Having watched them come of age, she believes that Andy and his older brother, Mark, could not have been involved in the Ponzi scheme. “I was there for twenty-five years and I think I would’ve at some point seen them involved in some way. Even in a conversation. I never did. I would find it hard to believe that they would wait for me to take a day off or go on vacation to openly participate. It just didn’t happen. Nobody is that good an actor for twenty-five years—other than their father.”

Bernard Madoff’s portraits have long since been taken out of the closet in Eleanor’s apartment and given away or put up for sale. Yet she admits she still cares about the man with whom she shared so much for so long.

“I still have feelings for him because I haven’t reconciled the fact that there was this horrible side to him, this side that I think it snowballed, it evolved, he got used to it, he got comfortable with it, and then he just went wild with it. We thought we were doing the right thing for our families. And we just thought that we were having a nice life. And we weren’t.”

BOOK: The Madoff Chronicles: Inside the Secret World of Bernie and Ruth
13.29Mb size Format: txt, pdf, ePub
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