Madoff Speaks! And Blames the Banks [Updated]

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Photo: Stephen Chernin/Getty Images

Disgraced Ponzi-schemer Bernie Madoff gave his first interview since his arrest in December 2008 and, guess what, the whole Ponzi scheme thing wasn't all his fault: It was the banks and hedge funds, too! If only they'd been watching him better. He says that certain banks and hedge funds had "willful blindness" about the discrepancies in his dealings and were "complicit" in his fraud. “They had to know,” said Madoff. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’”

The Times said he was "noticeably thinner and rumpled in khaki prison garb" and seemed "frail and a bit agitated."

“I’m reading more now about how suspicious [banks] were than I ever realized at the time," said Madoff. Documents unsealed in a lawsuit earlier this month showed that JPMorgan Chase analysts were raising doubts about Madoff's spookily consistent investment returns as far back as 2006.

But apparently, they were not sufficiently suspicious for Madoff's tastes. He's now working with Irving Picard—the trustee responsible for helping recover money for the victims—to offer "information I knew would be instrumental in recovering assets from those people complicit in the mess I put myself into.” Madoff hopes that if banks are found complicit, lawsuits against them would produce enough to funds to cover the remaining $10 billion he owes victims.

“I am saying that the banks and funds were complicit in one form or another and my information to Picard when he was here established this," Madoff said. He did take steps to exonerate Fred Wilpon, the owner of the New York Mets, and Wilpon's brother-in-law and business partner, Saul Katz: "They knew nothing. They knew nothing.” Picard is seeking $1 billion from the Wilpons as he seeks to claw back profits that they withdrew over the years from their Madoff accounts.

Although he "acknowledged his guilt in the interview and said nothing could excuse his crimes," he was also unapologetic about all the money his victims lost. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he said. Of course, his victims weren't actually "investing" in anything: Most of their $20 billion went right out the door to pay off fellow "investors," with the remainder funding Madoff's lavish lifestyle.

From Prison, Madoff Says Banks ‘Had to Know’ of Fraud [NYT]

This post has been updated with additional information.