The Madoff Chronicles: Inside the Secret World of Bernie and Ruth (17 page)

The information in this book is based on dozens of interviews, documents filed in court, records and files from inside the Madoff offices, and the extensive reporting of the ABC News investigative unit. Given the sensitivity of the ongoing criminal investigations and civil lawsuits, many of the people who were interviewed did so only on the condition that their names would not be used. Bernie and Ruth lived in a world full of secrets and they confided in few people. Some of those few felt it important that the Madoffs’ story be told because of the enormity of the crime and the complexity of assigning guilt, including people who spoke in defense of Ruth and the two Madoff sons, Mark and Andrew.

CHAPTER ONE

“Ike, it’s Bernie.”
: Ira Sorkin

Instead of a day
: Ira Sorkin

“do the right thing”
: Person close to Mark and Andrew Madoff

He had asked his sons:
Person close to Mark and Andrew Madoff

Madoff, a meticulous:
Law enforcement sources

“an innocent explanation”: USA v. Bernard L. Madoff
, Complaint, December 11, 2008

At the time of:
Irving Picard

Whatever it was that Sorkin
: Person familiar with Bernard Madoff

Within days, Madoff
: Person familiar with Bernard Madoff

He believed he could “sell”
: Person familiar with Bernard Madoff

“there will be a life after this”:
Person familiar with Bernard Madoff

Prosecutors later admitted:
Madoff case investigator

His firm’s account: MLSMK Investments Company v. JP Morgan Chase & Co., and JP Morgan Chase Bank, NA
, April 23, 2009

had only $234 million: SIPC v. Bernard L. Madoff
, Stipulation and Order of Transfer of Funds by J.P. Morgan Chase Bank to Trustee, January 27, 2009

The reports were prepared:
Eleanor Squillari

Between 2006 and 2008: MLSMK Investments Company v. JP Morgan Chase & Co., and JP Morgan Chase Bank, NA
, April 23, 2009

withdrew $5.5 million
: Massachusetts Secretary of State Complaint against Cohmad Securities Corporation, Exhibit 16, February 11, 2009

Madoff flew to Palm Beach:
Madoff’s 2008 calendar and Eleanor Squillari

“too stretched”:
Madoff case investigator

Carl Shapiro agreed:
Person familiar with Shapiro’s affairs

November 19:
Madoff case investigator

“hundreds of millions”:
Source close to Wilpon

The next day, Tuesday:
Ira Sorkin

An hour or so earlier:
Eleanor Squillari

ordered $10 million:
Massachusetts Secretary of State Complaint against Cohmad Securities Corporation, Exhibit 16, February 11, 2009

brother, Peter, arrived first:
Eleanor Squillari

because “he had recently made profits”: USA v. Bernard L. Madoff
, Complaint, December 11, 2008

“We have to meet with Dad”:
Person close to Mark and Andrew Madoff

Peter stayed behind:
Eleanor Squillari

Mark and Andy told the FBI:
Person close to Mark and Andrew Madoff

Instead, his sons:
Person close to Mark and Andrew Madoff

CHAPTER TWO

She told one family:
Sources close to Madoff family

The two met as teenagers:
Sources close to Madoff family

Richard Cohen:
“Goodbye, Bernie,”
Washington Post
, July 1, 2009

“tough guys”:
Jay Portnoy

Bernie’s parents:
Person familiar with Bernard Madoff

“mislead”:
SEC Division of Enforcement Case Opening Report, January 4, 2006

“evidence of fraud”
: SEC Division of Enforcement Case Closing Report, November 21, 2007

Bernie went off to college
: University of Alabama records

While he was away
: Sources close to Madoff family

joining Sigma Alpha Mu:
University of Alabama 1957 yearbook

“a fraternity of Jewish men”:
Sigma Alpha Mu Web site

“for her own safety”:
University of Alabama Web site

He enrolled at Hofstra:
Hofstra University records

second lieutenant:
U.S. Army Reserve spokesperson

She still found:
Sources close to Madoff family

Fortunately for Hofstra:
Stuart Vincent, assistant VP for university relations at Hofstra University

In early 1960:
FINRA Broker check records

ran a suspect: SEC News Digest
, September 20, 1963

In 1963, the SEC: SEC News Digest
, September 20, 1963

in January 1964: SEC News Digest
, January 23, 1964

Ruth and Bernie:
People who attended wedding

Ruth breezed to a degree:
Queens College records

Alpern’s accounting office was:
Source familiar with the company

The accountants guaranteed: SEC News Digest
, November 23, 1993

The SEC imposed: SEC News Digest
, November 23, 1993

A second set: SEC News Digest
, December 11, 1992;
SEC News Digest
, November 23, 1993

They were not allowed:
Person familiar with the company

and Mendelow insisted:
Stanley Arkin, lawyer for Steven Mendelow

“Who was the broker”: Wall Street Journal
, December 16, 1992

When Ruth’s father, Saul:
Saul Alpern’s will

After her husband’s arrest: SEC v. Madoff
, Order on Consent, March 2, 2009

CHAPTER THREE

It was late afternoon:
Interview Laurence Leamer, author,
Madness Under the Royal Palms

At Madoff’s office:
Madoff employees

Peter had seemed:
Madoff employees

Calls were coming in:
Bernard Madoff’s phone messages, December 11 and 12, 2008

Some friends called:
Fax sent to Madoff from James Davin

Carl Shapiro was at home:
Source close to Shapiro

“Some late news”:
CNN transcript, Anderson Cooper, December 11, 2008

“to take care of the poor”:
Person familiar with Madoff

Similarly, Ruth didn’t:
Sources close to Madoff family

“Dear neighbors”:
New York Times, January 12, 2009

He ignored all requests:
Person familiar with Madoff

“can’t snap my picture”:
Voice-mail message left for Nick Casale by Bernard Madoff

One package contained: USA v. Bernard L. Madoff
, Letter from Marc Litt to Judge Ronald Ellis, January 6, 2009

Bernie enclosed a note:
Person close to Mark and Andrew Madoff

“sentimental personal items”: USA v. Bernard L. Madoff
, Letter from Ira Sorkin to Judge Ronald L. Ellis, January 7, 2009

CHAPTER FOUR

Ruth was at one point:
Madoff case investigator

It was rare:
Madoff employees

One of his first:
Amy Joel

He became an investor: USA v. Bernard L. Madoff
, Government’s Second Notice to Seek Forfeiture of Certain Assets, March 17, 2009

requested the table up front:
Eleanor Squillari

more than a trillion:
The Philoctetes Center for the Multidisciplinary Study of the Imagination, “The Future of the Stock Market,” October 20, 2007

“the world’s largest market-maker”:
Bernard L. Madoff Investment Securities LLC Web site

“scores of leading securities firms”:
Bernard L. Madoff Investment Securities LLC Web site

At an industry:
The Philoctetes Center for the Multidisciplinary Study of the Imagination, “The Future of the Stock Market,” October 20, 2007

According to Madoff:
Bernard L. Madoff Investment Securities LLC Web site

They both became multimillionaires:
Madoff case investigator

$2 million home on:
Nassau County property records and Palm Beach County property records

Her husband, Rudy:
NYC Department of Transportation spokesperson

Investigators came to:
Madoff case investigator

When questions were raised:
Massachusetts Secretary of State Complaint against Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) LTD, April 1, 2009

Customers were told:
Massachusetts Secretary of State Complaint against Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) LTD, April 1, 2009

One prominent investor: Irving H. Picard v. Jeffry M. Picower et al.,
May 12, 2009

Madoff said he made:
Massachusetts Secretary of State Complaint against Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) LTD, April 1, 2009

he refused to answer:
Massachusetts Secretary of State Complaint against Fairfield Greenwich Advisors LLC and Fairfield Greenwich (Bermuda) LTD, April 1, 2009

Then, on a regular basis:
Madoff case investigators said Madoff and DiPascali recorded the bogus trades once a month. Bernard Madoff told lawyer Joseph Cotchett that he and DiPascali recorded the trades “every other day.”

They often got sloppy: Irving H. Picard v. Fairfield Sentry Limited, Greenwich Sentry Limited L.P., and Greenwich Sentry Partners L.P.,
May 18, 2009

“Frankie was wearing”:
Madoff employee

Madoff took cash draws: SIPC v. Bernard L. Madoff
, Affidavit of Michael Slattery, Jr., May 5, 2009

Madoff used $2,225,000: SIPC v. Bernard L. Madoff,
Affidavit of Michael Slattery, Jr., Exhibits 16 and 17, May 5, 2009