Madoff Calls Big Investors ‘Complicit’ in Jailhouse Interview
In an interview with the Financial Times, Bernard Madoff names four associates who he alleges knew that his business wasn’t on the level.
A recent jailhouse interview conducted by the Financial Times with Ponzi mastermind Bernard Madoff could shed light on one of the enduring mysteries of his multibillion-dollar scheme. Who else was involved?
The Feds have already charged a number of former Madoff employees. The trustee, Irving Picard, tasked with recovering money for Madoff victims, has cast a wide net, filing lawsuits that level accusations against the banks that facilitated the scheme and a number of investors who benefited from it.
Last June, ProPublica looked at several of the investors and money managers singled out in federal and civil filings. Now, in his interview with the FT, Madoff says that several of his oldest clients knew "something was amiss.""
In particular, Madoff names Jeffry Picower, Stanley Chais, Carl Shapiro and Norman Levy, his four largest investors.
At the outset, Madoff insists that one of the ground rules for the interview is that "nothing that I say should be taken as an excuse" for his behavior.
Yet later, he paints himself almost as a victim of Picower, Chais, Shapiro and Levy. "I was at their mercy," he says.
Madoff describes how he started managing money for the men in the 1960s. After the 1987 market crash, he says, he found himself locked into investment positions that his four stalwarts refused to close out. In order to keep the business going, they referred other investors to him. Madoff says that by 1992 it had become a Ponzi scheme and his big clients knew.
"They were complicit, all of them," Madoff says.
Of course, Madoff has been sentenced to 150 years in prison for orchestrating one of the biggest scams of all time, swindling investors out of more than $20 billion.
None of the men he accuses in the interview have been convicted of crimes. Chais and Levy are dead. The latter's estate settled with the trustee for $220 million without admitting wrongdoing. Chais' survivors have contested allegations made by the trustee and the SEC. Picower, the scheme's biggest beneficiary, also has died. His wife has pledged to return all $7.2 billion that her husband reaped from Madoff and says he did not know the business was a Ponzi scheme. Shapiro also has settled with the trustee for $625 million while denying any wrongdoing.
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