The Madoff Chronicles: Inside the Secret World of Bernie and Ruth (15 page)

Now Ruth, too, became a prisoner. She was afraid to leave her apartment because of all the reporters and her fear that she would run into one of her husband’s angry clients on the streets of Manhattan. Ruth used her security guards, who were still being paid out of the investors’ funds, to do her errands. She even found a way to sneak out of her apartment building by using a door in the building that connected to the back of a stationery store that opened onto Lexington Avenue, around the corner from her building’s main entrance, where the camera crews were camped.

She told people close to her she felt lonely and shunned. She withdrew from the country clubs on Long Island and in Palm Beach where she and Bernie played golf. She was afraid they wouldn’t let her have her golf bag and clubs back, but they did. But her social shunning was widespread.

Pierre Michel, her hair salon for the last ten years, told her she was no longer welcome. To add to the humiliation, the owners actually issued a public statement after the story broke on Page Six, the
New York Post
’s gossip page. “The Pierre Michel salon’s clients are among some of the Manhattan’s most elite,” the statement read. “Unfortunately some of those clients were victims of the Madoff’s [sic] and therefore Pierre Michel didn’t feel comfortable having her in the salon.” Not only had the self-described “magnet for celebrities, socialites, fashionists and trendsetters” banned Ruth, but they ascribed some of the blame for the scam to her. “Victims of the Madoff’s [sic],” their statement read, not “victims of her husband.” At $125 and up for a haircut, and $200 and up for highlights, Ruth probably would have had to find a new place to tend to her blond bob, anyway. But the sting of rejection was still sharp.

Within days of the guilty plea, Ruth began to witness the dismemberment of the empire of wealth she and Bernie had built. She told one family member it was a relief to have one less possession when she learned the $7 million yacht,
The Bull
, was being sold in France.

But when the federal government made plans to sell the Manhattan penthouse and seized the Palm Beach waterfront estate and the home in Montauk, Ruth told family friends it was heartbreaking to lose all the beautiful things they had accumulated over the years.

Ruth worried that the government wouldn’t know what to do with their fine antiques, and might not sell them for as much as they could in order to pay back the investors. She was especially upset when she saw the list of items being sold along with the Madoff villa on the Riviera. The oil painting she and Bernie bought in New York for $35,000 was being sold for 500 euros. The furniture they bought at antique fairs in London and Paris was not being treated as it should be. It wasn’t simply used furniture; these were antiques, Ruth reportedly fumed. The woman whose husband had stolen the money to buy her precious objects said she hated to see the new buyers practically steal the stuff at such a good price from the bumbling government.

Bernie Madoff spent his seventy-first birthday in jail on April 29. Ruth visited him a few days earlier on her normal Monday visiting schedule, but there was no cake and no trip to Cabo San Lucas like the previous year. Prison officials say “there are no birthday celebrations permitted in federal prison.”

Also according to federal prison rules hugging, embracing, and kissing are allowed but not conjugal visits.

Ruth continued to profess her love for Bernie, but she began to plan her life without him. She told family members she had begun to clean the penthouse on her own. The cleaning ladies for the Madoff homes in New York and Palm Beach, who had all been paid from company accounts, were let go. Ruth cried when her New York maid, Praxides Dirilo, left, but she felt better after she went out and bought a Swiffer to do her own cleaning. Ruth told friends she had begun to “feel free,” apparently exulting now in the lifting of the burden of so many expensive possessions that had defined her life as Madoff’s wife.

As the news coverage of her husband’s scandal died down a bit, there were sometimes days when no stories about them appeared in either the
Wall Street Journal
or the
New York Tim
es. Those were good days for Ruth, who began to hope maybe there would be an end to all the attention. She was thinking of going back to her gym, hoping she would be welcome.

Ruth remained estranged from her sons, Andy and Mark, who considered her an enabler of their father. At their lawyer’s insistence, she was told to communicate with the boys only through the lawyers. The grandchildren were not included in the lawyer’s dictum, and Ruth cherished the thought of spending time with them and reading their messages. She even understood why they wanted to change their name to anything but Madoff.

She knew the world was angry at Bernie and at her. Ruth’s own sister, Joan, and Joan’s daughter, Diane, had lost everything they invested with Bernie, but they continued to see Ruth. Ruth confided to a friend that, in what must have been a strange scene, she had even traveled to Long Island to help out with a yard sale Diane had been forced to hold because of Bernie’s crimes. She said she felt miserable the whole time, knowing her husband and his scheme had ruined the life of her favorite niece.

While Ruth suffered for her husband’s crimes, Bernie seemed to be a new man in prison. He was immune to the cameras outside and the daily drumbeat of investigative reports. Ruth told one person that Bernie sounded free and no longer burdened by the necessity of keeping a multibillion-dollar Ponzi scheme going. He no longer had to check the daily bank balances or make sure the SEC wasn’t closing in. According to someone familiar with his daily life inside, Bernie passed the time reading John Grisham novels.

Only one more event was left in his rapid descent from multimillionaire to imprisoned felon. Judge Chin would sentence him for his crimes, and the outcome could have a significant impact on his day-to-day life and comfort.

There had been no deal struck between Bernie’s lawyers and federal prosecutors when he agreed to plead guilty to the eleven felony counts. He had refused to offer the FBI any further cooperation in unraveling his finances or incriminating others. Madoff expected to spend the rest of his life in prison. He knew he would likely die behind bars. The actual length of the sentence, however, would determine the kind of federal prison where he would be sent.

A sentence in the twenty-year range could mean he would be eligible for a medium security prison, where the restrictions on inmate life allow a more relaxed daily existence and his fellow inmates would be a less hardened lot. If he were given the maximum sentence of 150 years, he faced the possibility of being sent to a maximum security prison, where his worst nightmares might be realized. He feared being attacked. Violent gangs often control significant portions of such facilities. Inmates are forced to take sides to find protectors in order to survive. Would Bernie’s skill at manipulation and deceit work as well in prison as it had in the Lipstick Building?

Some thought Madoff had little to worry about. “The prisons are full of antisocial personalities who thrive there,” said former FBI agent Garrett. “He can be the king of the court again but in a jail environment. If every day it’s all about you and doing whatever you want to do, you’re not going to be depressed. You’re not going to be anything. You’re going to try to find somebody else to manipulate and control.” Madoff had made his fortune through manipulation. Other celebrity inmates had found ways to use their infamy to get cushy work details and gain respect from their new neighbors. After all, who had ever stolen more or better shown up the “feds” as incompetent bumblers? “He can create an environment that he controls in prison, so people look up to him and he’s holding forth and they’re coming to his cell and asking questions. That would be predictable.”

Still, Madoff was worried about being sent to a maximum security facility, and he began to craft a new statement to read at his sentencing hearing that would actually offer an apology to his victims. The master con man knew what to do.

A HUSH FELL OVER THE CROWDED COURTROOM AS BERNARD
Madoff was brought in to face sentencing on June 29.

The seventy-one-year-old con man seemed thinner than he’d been when he’d appeared three months earlier to enter his guilty plea. Life in his temporary prison home, the federal Metropolitan Correctional Center in lower Manhattan, had been more of a strain than he’d expected. His grayish white hair had thinned in the front, but it had grown much longer in the back, curled up like some aging European playboy’s.

He wore the same dark suit, white shirt, and black tie that he had worn in March, but now he looked disheveled. The suit was wrinkled, and worse, for a man who once obsessed about his clothing and appearance, the collars of his shirt turned up like unruly flaps. Madoff tried to press them down, but to no avail. After his last court appearance, his suit had been swapped by prison guards for a blue jumpsuit and held in reserve for this final court appearance. If his collar stays had been sterling silver or brass, as they likely would have been for a gentleman of means such as Madoff, they would have been confiscated because prison rules prohibit any metal objects. The Bureau of Prisons does not provide plastic collar stays. Bernie Madoff looked a mess.

“Crook,” shouted one of his former investors seated in the front row of the courtroom as Madoff took his seat. Hundreds of onetime clients had lined up outside the courthouse for the opportunity to see the day of reckoning for the man who had betrayed and robbed them.

“This is the end of Bernie Madoff,” said one of his victims, Michael DeVita, as he waited to get through the large crowd drawn to the spectacle. Network and local television programs were doing live shots from across the street. Many of the victims had their own public relations representatives to schedule interviews. Someone was selling copies of comedian Andy Borowitz’s book
Who Moved My Soap?: The CEO’s Guide to Surviving Prison: The Bernie Madoff Edition
. Bars of soap inscribed with Madoff’s face and attached to a rope were being handed out to passersby. With the addition of a guillotine, it could have been a scene from Charles Dickens’
A Tale of Two Cities
. “You jerk,” said the daughter of one victim, Jen Morrow, when reporters asked her what she would like to say to Madoff. “How could you possibly do this? I hope that your family never lives a life of luxury.”

Madoff said nothing as he was escorted by U.S. marshals to the defense table, where he was seated with his lead lawyer, Ike Sorkin, on his left. As Sorkin conferred with his partner, Dan Horwitz, Madoff took two folded pieces of paper from his suit jacket. They contained the handwritten statement he would read to the judge in a last effort to appear contrite and again seek to exonerate his wife, sons, and brother.

Judge Denny Chin had moved the hearing to the large ceremonial courtroom on the ninth floor of the federal courthouse in lower Manhattan so there would be more room for the many victims and journalists who wanted to attend. The reporters took up the right side of the room and the victims were on the left. The first two rows were reserved for nine victims who had asked to speak. In the jury box, six sketch artists drew the scene to provide a visual record for television and newspaper coverage.

At the prosecution table, across from Madoff, assistant United States attorneys Lisa Baroni, Marc Litt, and Barbara Ward were joined by an assortment of federal agents who had worked on the case. Baroni had replaced Litt as the lead government lawyer, apparently in response to criticism that Litt had initially been too easy on Madoff. Indeed, Litt himself told associates that Madoff had conned him into thinking he would cooperate if he was permitted to stay out of jail under house arrest at his penthouse apartment. Once Litt agreed to the house arrest, Madoff then refused to cooperate. Officials at the Department of Justice in Washington were determined not to let Madoff pull another fast one.

Conspicuous by her absence this morning was Ruth Madoff, who continued to pay the price for her husband’s crimes. A few days earlier she had given up her fight to keep the New York penthouse. The government had already seized the Madoffs’ vacation homes in Montauk, Palm Beach, and France. Ruth’s lawyer’s effort to prove she and Bernie had, at least, bought the $7 million apartment with legitimate money had failed. In an agreement with prosecutors, Ruth would be allowed to keep just $2.5 million of the hundreds of millions the family once had. She was no bag lady, but with no place to live, she had become homeless. Ruth was afraid of what would happen if she showed her face at the courthouse and so she stayed home.

In fact, no member of Madoff’s family was present to lend him support. No one even had the time or interest to send a letter. “I would expect to see letters from family and friends and colleagues,” said Judge Chin. “But not a single letter has been submitted attesting to Mr. Madoff’s good deeds or good character or civic or charitable activities. The absence of such support is telling.”

There was no shortage of condemnation, however, as the victims stepped to a microphone to tell their stories of economic ruin and emotional devastation. Madoff was seated in front of them and they could only see his back and the curls of his hair.

Tears rolled down the cheeks of Don Ambrosino, a retired New York City corrections officer, whose life savings were wiped out in the Madoff scam. His dream of traveling the country with his wife, Ronnie Sue, in a motor home had been destroyed. They’d had to sell the motor home, and Ambrosino wanted Madoff to suffer, too. “As the guard who used to be on the right side of the prison bars, I’ll know what Mr. Madoff’s experience will be and will know that he is in prison in much the same way he imprisoned us as well as others,” he said.

Madoff stared straight ahead or, at times, looked down at his hands in his lap or at the floor. He showed no emotion, although he seemed to be clenching his teeth.

A sixty-one-year-old widow, Maureen Ebel, described the emotional toll Madoff’s crimes had taken on her as she was forced to take three jobs and sell the family home. “I had the horrible feeling that I had been pushed into the great black abyss,” she said, referring to Madoff as a “psychopath.”

Madoff was unmoved. This was the same man who had not shed a tear when informed that two of his victims had committed suicide.

Others called him names: “evil low life,” “a common thief.” But neither the names nor the tears seemed to affect Madoff. He did not turn around to see who was speaking.

Carla Hirschhorn told the judge she and her husband had lost the money that was meant to pay for their daughter’s college education, as the young woman sat two rows back dabbing at her tears.

“He killed my spirit and shattered my dreams,” said former model Sharon Lissauer in a whispery voice.

Madoff had already been told by the judge that the nonbinding sentencing guidelines called for him to get a 150-year sentence. The former investors demanded he be shown no mercy.

Sixty-three-year-old Burt Ross broke down in tears twice and could not go on as he described the loss of the money that his father had worked so hard to save for his family. Ross said he had been taught that in each person there is “an inner light,” but he could not find one in Madoff.

“Can we say Madoff was a righteous Jew who served on the boards of Jewish institutions when he sank so low,” Ross began, and was again in tears and had to stop to regain his composure, with his wife holding him tight. “When he sank so low,” he continued with gasps, “as to steal from Elie Wiesel, as if Wiesel hasn’t already suffered enough in his lifetime. A righteous Jew, when in reality nobody has done more to reinforce the ugly stereotype that all we care about is money, despite the fact there are no people on this earth more charitable?”

The final victim to condemn Madoff was Cheryl Weinstein, who said she had met him when she served as the chief financial officer for Hadassah, a Jewish women’s charitable organization. “I now view that day as perhaps the unluckiest day of my life,” she told Judge Chin.

Eleanor Squillari remembered that Cheryl Weinstein was a frequent caller to Bernie over the years. “He would always roll his eyes when she called.”

Weinstein described how she and her husband had been forced to sell the family home because of their losses. “I felt it was important for somebody who is personally acquainted with Madoff to speak,” she said. “He is a beast that has stolen for his own needs the livelihoods, savings, lives, hopes and dreams and futures of others in total disregard. He has fed upon us to satisfy his own needs. You should protect society from the likes of him,” she urged the judge.

The cumulative weight of the denunciations from Madoff’s once trusting investors was overwhelming, and efforts by his lawyer, Sorkin, to counter them failed miserably. “We cannot be unmoved by what we heard,” said Sorkin of the victims’ accounts. “No doubt, we represent a deeply flawed individual.”

In a letter to the judge a week earlier, Sorkin had called into question the motives of the victims. “We believe that the unified tone of the victim statements suggests a desire for a type of mob vengeance,” he wrote.

Now on his feet, the veteran defense lawyer tried another tack, suggesting that the size of Madoff’s crime had been grossly exaggerated by the news media, ignoring the fact that it was Madoff who initially set the total amount of fraud at $50 billion.

“The frenzy, the media excitement, that Mr. Madoff engaged in a Ponzi scheme involving $65 billion and that he has ferreted money away, as far we know, Your Honor, that is simply not true,” asserted Sorkin. The $65 billion figure was the amount Madoff’s investors believed they had lost, based on the cumulative total of their last monthly statements. The government agreed that the actual amount of cash invested by investors between 1985 and 2008 was about $13 billion. Any amount beyond that represented the fake profits Madoff led his victims to believe they had earned. Sorkin argued that much of the lost $13 billion might be recovered, suggesting that maybe Madoff wasn’t all that bad. Sorkin pointed out that he had not tried to flee, and he and his family had also suffered “an enormous toll.” Given Madoff’s thirteen-year life expectancy, Sorkin thought a twelve-year sentence would be fair.

“We ask only, Your Honor, that Mr. Madoff be given understanding and fairness, within the parameters of our legal system, and that the sentence that he be given be sufficient, but not greater than necessary, to carry out what this court must carry out under the rules, statutes, and guidelines.”

Madoff barely stirred as his lawyer spoke on his behalf. Sorkin’s delivery seemed flat. He had been dealt a losing hand from the very beginning of the case. First, Madoff had essentially turned himself in to the FBI without consulting Sorkin. Then, he had given a lengthy, though largely untrue, statement to the FBI without consulting him. Again and again, Madoff had been a difficult client who seemed to think he was smarter than his own lawyer. It wasn’t even clear if Sorkin’s firm would be paid much more than the initial $250,000 he received from Madoff. As a consummate professional, however, Sorkin tried to fashion a cogent argument that would have some resonance with the judge. For the sake of future business, at least, he had to be seen as giving it a shot.

“Mr. Madoff, if you would like to speak, now is the time,” said Judge Chin.

Madoff stood up, holding his folded handwritten statement in front of him. His shirt collars now jutted outside his suit jacket, but he had given up any effort to tuck them in. It was over.

“Your Honor,” Madoff started and then stopped. His voice was too dry to go on. He sipped from a glass of water.

“Your Honor, I cannot offer you an excuse for my behavior,” said Madoff, who three months earlier in his guilty plea had offered the excuse that his clients had pushed him to achieve impossible rates of return.

Another sip of water.

“How do you excuse betraying thousands of investors who entrusted me with their life savings?” Madoff said, trying his best to show some kind of remorse. At least he was no longer blaming the victims.

Then came the words that mattered most to him, as he again tried to deflect any blame or suspicion from his employees and his family. He knew his fate. This was his last chance to help others who were now under suspicion.

“How do you excuse deceiving two hundred employees who have spent most of their working life working for me?” Lawyers for Frank DiPascali, Annette Bongiorno, and others who had worked on the seventeenth floor would appreciate that.

“How do you excuse lying to your brother and two sons who spent their whole adult life helping to build a successful and respectful business?” Madoff was back to the original version of his script that involved his confession to his brother and sons and then the FBI arrest. Andy and Mark might be behaving terribly toward their mother, but he was not going to throw them under the FBI bus.

“How do you excuse lying and deceiving a wife who stood by you for fifty years, and still stands by you?” Ruth was not there to hear the words, but she had already been told what Bernie would say. He told the judge that she would issue her own statement, part of a coordinated approach in which she would echo what Bernie said by announcing her own remorse. Everyone stayed on script.

To some reporters in the jury box, Madoff’s most heartfelt words seem to come as he said he was sorry for bringing disgrace on the securities industry. “How do you excuse deceiving an industry that you spent a better part of your life trying to improve? There is no excuse for that, and I don’t ask for forgiveness.” It seemed the one part of his statement that he read with true conviction. Lawyers for all feeder funds would find good use for those words as they continued to proclaim their clients’ innocence of any wrongdoing in their dealings with Madoff. They had been deceived by the master. If the SEC and the FBI had been fooled, how could they be expected to know better?

Madoff did not apologize for repeatedly lying to the SEC, but he went on to offer another explanation for his behavior. “I made an error of judgment. I refused to accept the fact, could not accept the fact, that for once in my life I failed. I couldn’t admit that failure and that was a tragic mistake.” This version of events seemed to imply that he had once been wildly and legitimately successful and then made one terrible mistake. Given his criminal, antisocial personality, the crime profilers had predicted this would be Madoff’s explanation.