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The Madoff Tapes


“Everyone was greedy,” he continues. “I just went along. It’s not an excuse.” In his mind, the hedge funds and the banks were little more than marketers, skimming their 1 to 2 percent off the top, a fee for their supposed “due diligence,” though they exercised little oversight. “Look, there was complicity, in my view,” Madoff told me.

Madoff didn’t exclude his individual investors in his list of those who, at least tacitly, played along with the game. “Their friends had told them, ‘How can you be making 15 or 18 percent when everyone is making less money?’ ” he told me. “Believe me, if you don’t think they had doubts, they had doubts … I would say, certainly, by the mid-to-late nineties,” it should have been obvious to everyone that his investment business was a fraud.

Madoff’s thoughts about his four largest early investors are especially barbed. Privately, Madoff resented many of his clients whom, legitimately or not, he’d carried for years, turning modest nest eggs into luxurious lifestyles. “It was his friends he had made rich—and he certainly talked about that all the time—he just resented them,” said one man who worked with Madoff. Madoff’s four big investors have little reason to complain, as Madoff sees it: Carl Shapiro, an apparel manufacturer, Jeffry Picower, a Wall Street investor, Stanley Chais, a money manager, and Norm Levy, a real-estate developer who told his children on his deathbed, “Trust Bernie Madoff.” “All of those four people, even though my friends, you also have to understand, every one of them made tons of money with me, hundreds of millions. Picower, billions. Shapiro, well over a billion. Levy, billions. Real money.” And, he insisted, legitimate money. They all became giants of philanthropy, happy to take public bows, while, in his view, it was Bernie from Brooklyn who thanklessly drove the engine. “Let’s put it this way: Shapiro probably built more hospitals in Boston and put more buildings in Brandeis University than you can imagine” with money Madoff says he earned.

“It’s unbelievable. Goldman … no one has any criminal convictions—the whole new regulatory reform is a joke. The whole government is a Ponzi scheme.”

And now there are limits to his sympathy. He sees himself not as some evil mastermind but as part of a system of corruption, maybe its linchpin, but he believes that people have lost their perspective on what actually occurred. “Look, none of my clients, even if they lost every penny they put in there, can plead poverty,” he said. “Look, it doesn’t mean I’m excusing what I did, doesn’t mean I don’t feel sorry for them. I’m embarrassed … It was the people that came in very late in the game that got hurt. All of my friends, most of my individual clients, are not net losers,” he said. “Now if you listen to [them], they’re living out of Dumpsters and they don’t have any money, and I’m sure it’s a traumatic experience to some, but I made a lot of money for people. Does it justify it? No.

“When you deal with people’s money, as I did for all my life,” he continues, “you realize how strange they are; it’s all like, ‘What have you done for me lately?’ If you made money for me, I was smart because I gave you the money and I went there, and if you lose money, then it’s all your fault. So you become somewhat callous about people lying.”

Through the nineties, Madoff dreamed of climbing out of the hole he’d dug. “I kept telling myself that some miracle was going to happen or that I was going to be able to work my way out of it. I just didn’t know when that was.” By around 2002, he realized this was a fantasy. “By then, the number was so astronomical I didn’t know what I was hoping for, quite frankly.” So he continued. The scheme demanded endless funds. Money flowed out almost as quickly as it came in, at points. It isn’t clear that the fraud was even designed to make money. “He left millions and millions on the table,” one of the trustee’s lawyers said, implying that if it had been about the money, he could have taken more. And yet the scheme demanded constant attention. Madoff felt he had to handle every inquiry from a significant investor. “He’d pick up the phone wherever he was—he wouldn’t go places on earth where he couldn’t be reached by phone,” said a person who worked with him. And increasingly, it was some of his largest investors, with their outsize expectations, their winks and nods at the mounting facts, who called the shots. According to one of the trustee’s lawsuits, the power relationship had been turned upside down. The suit alleges it was the swindler who took marching orders. Picower, probably his largest individual investor on paper, dictated the returns he sought or “needed”—one reason the trustee accused him of being tacitly in on the scheme, and his widow agreed to return $7.2 billion. Outwardly, Madoff basked in the admiration the scheme brought him, but it was a humiliation too. “I would stare out the window,” he said. “Sometimes I would talk to myself.”


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