Blogs and Stories
Madoff Employee Breaks Silence
ROLE OF OTHER MADOFFS
When Bernie was away, were members of the family the ultimate bosses who oversaw the illegal operations that Di Pascali allegedly ran? Some employees are wondering now whether they were because, outside of Mark and Andrew, none of them seemed to do what they were ostensibly hired to do. “I didn’t even know that Peter (Madoff’s brother) was the firm’s compliance officer,” the employee said. “I never saw him doing compliance. He was more concerned with making sure that the firm could run business out of their office in the Bulova building if a disaster occurred.” The building, near La Guardia airport, where Madoff had offices, had office systems that were duplicates to those in their offices in the Lipstick Building. We had these drills where we had to drop everything and rush to the Bulova building. A lot of money was spent on this duplicate office.”
“Shana Madoff , the compliance legal counsel, Peter’s daughter who was married to an SEC compliance officer, only spent half time in the office. When she was here, she seemed to work on human resources rather than compliance.”
Ruth was the firm’s bookkeeper: “But I only saw her walk through once or twice,” Some friends of the employee, in hindsight, have said that Andrew and Mark must have known or suspected that things were not kosher. “They were educated guys, one of them had gone to Wharton, I think. They saw the balance sheets. We were making no money, some years losing it, and the brothers, I heard, were getting $4 million annually. That just didn’t track.”
“But I don’t want to believe that they knew or were involved,” the employee said. “I believe they're innocent. They were really nice guys, they looked very straight. They treated me well even though as a computer programmer, I didn’t command the respect the hotshot traders did. When I told them I wanted to leave, Andrew tried to persuade me to stay and when I declined, he let me work only four days a week so I could start up my computer business.
‘IT WAS GOOD TO WORK FOR BERNIE’
“We all joked that the motto of the place was that ‘it was good to work for Bernie.'
“We assumed Bernie was a billionaire and we didn’t understand why he didn’t leave his money in safe investments and just collect interest. Why did he support this lousy business? It didn't seem worth it for a billionaire.” In court, Madoff admitted that at one point he put $250 million of clients’ money into the legitimate businesses.
“But it was drummed into us that Bernie was into positions for the long haul, that he believed the stock market was cyclical and that eventually what was down would come up. So I thought that Andrew and Mark just believed what their father said and followed his philosophy. If he wasn’t bothered, why should they be?”
When asked how he felt when the Ponzi scheme was revealed, the employee became silent. "At first I was detached. I didn’t have relationships with the Madoffs like lots of others did. I had no emotional connection."
He looked down. "But now, I keep thinking about the 90-year-old man who lost even his house and is bagging groceries. Then I think of the fact that I may have gotten paid with his money."
_______
Correction: A previous version of this story incorrectly attributed a statement to Andrew Madoff; it should have been Mark Madoff.
Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
John Talks Joe
Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
Sources: Madoff Indictments Imminent
Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
Madoff's Other Girlfriends
Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
Ruth's $45 Million Stash
Allan Dodds Frank is a business investigative correspondent who specializes in white collar crime. He also is President of the Overseas Press Club of America, one of the many journalism organizations that protests the arrests of journalists abroad and repression of freedom of speech.
Lucinda Franks is a Pulitzer Prize-winning journalist and author who was on the staff of the New York Times and has written for the New Yorker and the New York Times Book Review and Magazine. Her latest book is My Father's Secret War, about her father, who was a spy for the OSS during World War II.
shlamazing
Wow..now it's starting to all come together....freaky!
there are enough red herrings in this story to indicate that there are bodies everywhere....inside the madeoff facade and outside in the regulatory bodies looking on
An absolute bombshell!
Another insight into the Madoff "House of Mirrors"......
Will the stories ever end?Stay Tuned!
Lucinda Franks deserves yet another journalism award for her work on this issue. She worked for us, which is a pleasant "change" we can believe in.
This comment has been removed by The Daily Beast's editors.
You are so right!. That's why, one month after your post, we have made no progress in this case. SIPC is not paying us the money that we are legally entitled to under the laws in this country. The higher-ups are not talking at all. We, the legitimate account holders are not getting any help from any quarter. So where are the bodies buried?
Since I've been critical of other posts on the Madoff case by Lucinda Franks--which seemed just recycled information from other papers--I have to tip my hat on thise one. It contains real information, not available elsewhere.
Good job.
MANY MORE THAN NOT
Try to follow the lead of the guy who has the biggest wallet. WHY? I think they see in them a kind of KING like image ---- GOD FORBID if you are of that mindset. Then some might asks who should one look up to? Maybe this man --------his words and deeds are good for us today as when he pinned them to build a fire in us to take back and repossess our Great and Abundant America.
FAMOUS QUOTES BY FREDRICK DOUGLAS 1818 ----- 1885
America is false to the past, false to the present, and solemnly binds herself to be false to the future.
At a time like this, a scorching iron, not convincing argument, is needed.
Find out just what any people will quietly submit to and you have the exact measure of the injustice and wrong, which will be imposed on them.
I prefer to be true to myself, even at the hazard of incurring the ridicule of others, rather than to be false, and to incur my own abhorrence.
If there is no struggle, there is no progress.
It is easier to build strong children than to repair broken men.
It is not light that we need, but fire; it is not the gentle shower, but thunder. We need the storm, the whirlwind, and the earthquake.
No man can put a chain about the ankle of his fellow man without at last finding the other end fastened about his own neck.
Power concedes nothing without a demand. It never did and it never will.
The life of a nation is secure only while the nation is honest, truthful, and virtuous.
The limits of tyrants are prescribed by the endurance of those whom they oppose.
The thing worse than rebellion is the thing that causes rebellion.
To suppress free speech is a double wrong. It violates the rights of the hearer as well as those of the speaker.
Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.
Holy crap. What an interview! And I say good for that former employee coming forward to tell this story now, risking heaven only knows what. Yeah, it's easy for us to say, "How could he possibly not have known?" and natter on about how we'd have done better and they must all have known or be congenitally stupid (as Derida suggests in comment 5), but unaffiliated hindsight is 20/20. The Devil never looks like the Devil; that's how he gets away with it.
Lucinda will be getting a subpoena any minute demanding the name of this person, although she gave enough clues for investigators to identify him or her.
The over-compensation factor reminded me of Charles Keating who used to pay secretaries and clerks six figures. This should be one of the first things SEC investors look for when checking out investment firms. Count up all the clerks making an excessive wage, subtract one for the boss' gf and then look closely if there are many more.
I feel pretty confident in stating that the Bankruptcy court and the Criminal Court cases will state the Trading and Proprietary businesses of BLMIS were money losing entities. The records of the trading business were just as much of a mess as the Investment Advisory. Madoff was laundering the Investment Advisory funds to his Trading operations Bank of New York Accounts.
Another reason why the Trading side of the business wasn't making money, the salaries were not in line with earnings, never mind that the bonuses were probably exorbitant as well.
I cannot believe that only a couple of people knew that something was amiss at Madoff's place of business, I agree that more investigating is required into this gigantic Ponzi scheme. People get nuts when it comes to money, they stop thinking about reality and just see dollar signs. If something seems to be too good to be true, more than likely its not true. From the investors to the traders to the sons to the SEC, folks were blinded by quick money, easy profits by a sociopath who cared little about others. Huh, sounds like America as a whole these days! Good job Ms. Franks!!!
A good article, full of shocking substance - stupidity a la lemmings. I only wish that more articles I read in DB were as interesting
Very good piece. But shouldn't this employee be talking to investigators, not reporters?
Of course, they'll be knocking on his door any minute now. Hell, they're probably already there.
OUTSTANDING! This is why I continue to read the Beast.
And I have to agree with the employee--it would be very hard to leave if you were making a large salary and couldn't replicate it elsewhere. Many people could be trapped this way.
Kind of reminds me of General Motors.........
It looks like Madoff borrowed from the "Mob" years ago and them found him self stuck with new "Partners" and made the most of it. Fish Heads and gloves for Bernie??
Can somebody tell me what is the difference between Madoff's scheme and AIG's Financial Products division's Credit Default Swaps. It seems they both sold a lot of nothing to a lot of people.
Don't be surprised when this is all said and done that we find out the number of politicians who had their hands in this pot. The present administration comes to mind. Crooks flock together. Madoff, Dodds, Franks, Schumer, Clintons, Obama and his Hollywood friends, Acorn, etc., etc. etc. Just wait and see.
Really interesting piece. Thanks, Lucinda. Love how someone here referred to Bernie as "Made-off'" Creative play of words! What really struck me about this piece was this employee's comments at the end---how he's wondering now if he was paid with money that belonged--for instance--to the 90 year-old guy bagging groceries. It made me cognizant of the idea that Bernie's vctims are almost countless, from the investors who lost millions, to the guy who quit the firm years ago and feels complicit somehow.
Keep up the good work.....
So Bernie's a neatnik. His prison experience is going to be even more hell than I thought,
Great story about this dirt bag and his family. They should throw this scum and the fake wife in jail in one of the worse on earth to rot. Take every thing they got away.
They complain about greed well they should start rounding up all these dirt bags like them and throw them in jail and stop wasting money on long lengthy trials. And start paying back some of the people they hurt.
ZZZzzzzzzzzzzzzzzzzz!! Wow! Is this story boring and poorly written, or what?
schlocking. THIS is America. a rogue colony of greedy Euro cast offs ... and u tried to make (us) think its was just Australia ... LOL
Thank you.
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