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Steve Madden: Crisis of the Sole

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When Madden was finally indicted last June, people who knew him from high school began flooding into Jildor to discuss the charges. "I would tell them, 'That's what they have lawyers for,' " says Jildor senior vice-president Larry Bienenfeld. "I would say that if he was diagnosed with cancer, that's a problem. This is something that can be fixed."

If the first (and, so far, the only) trial to come out of the Stratton investigation is any guide, the charges against Madden may be difficult to prove beyond a reasonable doubt. That trial -- of the firm's former auditor, Dennis Gaito -- resulted in a hung jury in December after Gaito's attorney, Ronald Fischetti, focused his efforts on destroying the credibility of Porush and Belfort. "As long as Porush and Belfort say what the government wants them to say, they have a free ride," says Fischetti. "No one is checking to determine what happened to those millions and millions that they stashed away."

Joel Winograd seems likely to pursue a similar strategy. A heavyset, white-haired Long Islander who has known Madden for fifteen years, Winograd delights in deriding Porush and Belfort as "devils in business suits."

"Even when he was tape-recording for the government," Winograd says of Belfort, "he would write notes on his hand to betray the government: 'Don't talk, I'm recording you.' Is this the sort of person the government wants to use as a witness in the important aspects of another person's life?"

Belfort, Winograd continues, "even cheats at golf." Madden, by contrast, is not only a "great golfer" but a "good guy," a "straight shooter" who "treats his mother like a queen." Madden, says Winograd, is "being used by Jordan and Danny as one of the keys to open their jail cells that they should be in."

As Winograd sees it, the fact that Madden had an account at Stratton doesn't mean he knew what Porush and Belfort were doing, let alone that he was in any way involved. Madden "was buying stock and making money, buying stock and losing money. He made more than he lost, but he didn't know what improprieties they were involved in."

As Madden himself put it in the course of his lawsuit with Jordan Belfort: "My strengths as a businessman lie in the design and sale of women's shoes, and I have never been comfortable with complicated or technical legal or business documents . . . I have always relied on the people around me."

When I ask why Madden employed Belfort as a consultant at Steve Madden Limited in 1994, after he was barred from the securities industry, Winograd replies, "Steve Madden is a loyal friend and a devoted human being. He didn't turn his back on Jordan Belfort in his time of need." And what about the $80,000 cash kickback Madden allegedly gave to a Stratton golf buddy in the locker room of the Engineers Country Club in Roslyn, Long Island? "It's totally ridiculous," says Winograd. "Cash? The government can explain from here to kingdom come. There is no way Steve would have had that amount of cash, and he wouldn't have had that in a bag walking around a country club. I think these fellows have watched too many spy thrillers.

"Let's say Steve was fooled," Winograd summarizes. "You can be savvy in business, but you may not be savvy in love and friendship."

In any case, "Steve will overcome," he vows. "His company will continue to have record quarters of sales and earnings, and this will have a fairy-tale ending."

Perhaps. But even if Madden is acquitted in both of his criminal trials, he could still lose the civil case and, possibly, control of his company. For Steve Madden Limited, such an outcome might be manageable. "Mr. Madden is extremely talented and a tremendous business partner, and he's wonderful," says the company's president, Rhonda Brown. "But we could continue to grow our business profitably . . . whether he's on the golf course, or whatever." For Steve Madden the man, it could be devastating. "My life," he says, "is my company."

it's a cold, gray saturday in soho, but inside his lower-Broadway flagship boutique, Madden is absorbing teen consumer culture. Hip-hop is blaring on the sound system; girls in black leather jackets and jeans are lining up three-deep at the steel shoe displays. Madden kisses me hello, and with his arms folded across his chest proclaims: "This is a regular Saturday." Madden roams the deep, narrow selling floor, shoving his hand into insteps, caressing soles, and obsessing over the most minor details of the handiwork.

"I love that boot," he intones to a young dark-haired woman trying on narrow-toed black faux-crocodile boots with a two-inch platform heel. "Where else could you ever get anything like this?" he asks. "Where could you ever see anything like this?"

"I built all this," he tells me, waving his arm at the expanse of his crowded boutique. "And they . . . " he says, referring to Porush and Belfort. But he trails off without completing his sentence. "It's Russian," he says, finally. "Like Dostoyevsky."


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