In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “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 wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
It’s always all about the Benjamins.
We should really be looking toward the future, not the past. He’s suffered enough. Free Madoff!
“…a risk they were well aware of…”? Um, no. He’s still the con artist.
A Commenter at Balloon Juice (formerlyThe Grand Panjandrum)
One invisible hand washes the other invisible hand.
Madoff is such a sharing type of guy.
Now he’s sharing the blame. How sweet.
Weird convergence, I’d just finished reading that piece when I clicked over here. I don’t think the Madoff piece is quite clear on who knew what when. As MattF points out Madoff is a con artist and he’s still conning. He seems to have some kind of goal to minimize his responsibility to the sum total of the original monies put into his funds (20 billion?) and not for the manipulation of his investors which created 65 billion in paper value. Paper value that was used by people, in good faith, to plan for their retirements, to make gifts, to behave philanthropically. Basically, he stole that original 20 billion from his investors–some of them saving with pathetic earnestness–and with the promise of a payoff at some later date used that money to fund his lifestyle and to pay back more important investors. Whether anyone knew, or suspected, his behavior wasn’t on the up and up is irrelevant to his guilt in this matter.
On a larger level what he did is no more than many a hedge fund–but he had unwitting instead of witting investors–in that it was a bubble. If it had blown up like World Com or one of the other big scams it wouldn’t have resulted in his going to jail–I believe Bush Senior never did a day.
i agree with javamanphil, that much money doesn’t go that far missing if he was the only dirty one involved, besides some of the other crooks, unrelated to madoff, got away with it, lets free madoff and bail him out, let him get back to ponzing, see if the wife comes back too.
seriously, i lost my sense of outrage for the “victims”, when it turns out, they loved them some exclusivity. his hook was with people who wanted to believe they had a guy, that their guy was better than every one else’s guy, and it was only because of how special they were, that their guy had anything to do with them…not money mind you, it was something other than money that made them worthy.
douchebags, the lot of them. they could have invested above board, in stuff anyone with money can invest in, but normal returns, like taxes are for the little people.
you can’t con an honest man.
This morning, while “reporting” this piece, CNN’s Christine Romans spent 2 solid minutes underlining how much of a liar Madoff is because he first said he was the sole master mind and now he says he isn’t… even though that is not what he is saying.
He says the regulators shuould’ve noticed.
A former client of mine worked his ass off to get into Madoff’s scam. (one of things Bernie did so well was make it into a very exclusive “club”) My guy finally got in through the crook from Ct, who put together deals with Madoff to bring in additional investors.(sheep)My ex-client got in about a year and half before it blew up, he got nicked for about 5 milllion simply because that’s all he was “allowed” to put in. He is such a greedy dick, if they would have let him, he would have put in every penny he had.
Huh? Madoff never invested anybody’s money in anything. He pretended to invest money. He (and unknown confederates) made shit up, falsified documents, and used their reputation and other credentials to hide their fraud.
But you’re right that Madoff is continuing the con. People like him are always amused with themselves, and their ability to work the con.
Madoff is the latest embodiment of the type of con artist depicted in Dickens’ Little Dorrit. The banker Mr Merdle (great name!):
Merdle, of course, is a supreme fraud who wipes out the fortunes of all who “invested” with him.
On the other hand, Merdle doesn’t wait to get sent to prison…
Wasn’t the gossip at the time of his bust that most insiders thought that he was crooked, but the gains were ill-gotten rather than fictional.
Yeah he is a con man.
They also use criminal hackers as a tool to improve computer security, so even the con men can have a use. Not that I would place much stock in Madoff ramblings per se as a tool for learning much. He seems to be more focused on finding psychic solace in noting the failings of his victims. Dont be taken in by this con — no matter how unworthy of sympathy some of the victims may be, they are still victims.
What is so pathetic about Madoff is that the tools to police his crime were already in place and should have worked. He thrived because as noted above by others, his victims tended to be those special people willing to take risks with something that might not be quite legit, so long as it paid well. Others less squeemish and more open about this impulse invest in child labor facilities overseas.
What is really amazing are those professional investors who took a fee from clients to wisely invest their money, and who then just turned over the money to Madoff, without a drop of due diligence whatsoever.
Yes, the banks failed their duty to be vigilant and so didn’t catch Bernie Madoff cheating his clients. No, it doesn’t make him any less of a crook.
@fucen tarmal: I have to disagree. You’re saying that it’s inherently wrong to seek out, or hire someone to seek out, investments nobody else knows about that promise a better-than-usual return. But it’s not inherently wrong to try to get ahead of the game unless you actually cheat, and entrusting one’s money to Madoff didn’t, by itself, amount to cheating.
Sure, Madoff appealed to the vanity of some of these people to get them to invest with him. Sure, a bit more healthy skepticism about his claims might have kept these people’s fortunes intact. But we all have some vanity in us, and Madoff’s marks are no worse than the rest of us on that acore.
i’d say its more inherently dumb, than inherently wrong. sure you can make money that way, but, in the attempt, you have to kiss your cash goodbye,and not really expect it to come back.
the rewards might be greater, but the risks are also exponentially greater. you are basically saying, i am willing to take more risk than anyone else, because those investments aren’t a secret, they are just high risk. if they weren’t high risk, they wouldn’t need you.
@fucen tarmal: Nope, still don’t agree I don’t think it’s inherently dumb, either. Just riskier, which is fine if you choose to live with the extra risk. That’s what the game of investing money is all about, trying to get a better return on your money than the other guy. Most of us settle for a minimum-risk strategy and willingly accept mediocre returns as a trade-off. Madoff sold himself to his clients as a guy who could get them a better return at a still-comfortable risk level.
@Brachiator: To which part?
The gossip I read was that ‘some’ Madoff investors assumed he’d found a way to game the system, but as long as his dishonesty worked in their favor, they very much wanted to keep investing with him. Other reporters said this was a case of blaming-the-victim — that it was easier to believe the investors Madoff cheated were willing to wink at dishonesty than to believe that Madoff was just a supergeeenius grifter. Me, I think it’s pretty clear from the intrabank emails now at issue that at least some of the most sophisticated, professional investors knew Madoff’s returns didn’t pass the smell test, but as long as they figured they could get their share of the loot before the feds busted down the door, they didn’t care how much of a crook Bernie was. How far down the food chain one wants to assume this level of ‘knowingness’ is certainly an open question… complicated by the factoid that Madoff seems to have used his status as “a Jew among the white-shoe Wall Street goyim” to help attract investors (suckers). Just as Sarah Palin uses her status as “a Real Heartland American(tm) beleagured by the vile Lamestream Media” — how much credit do her supporters get if they honestly believe Palin is a victim, or should they just be denigrated for blatant self-interest and pretending to a victim status they know in their hearts they don’t deserve?
I’ve assumed from the beginning that this was the case for a sizable chunk of the scammed (I’m sure plenty were just naive and honest though) – they probably thought Madoff was running a sophisticated insider trading scheme, and that even if it all fell apart their winnings would be safe.
Madoff was classic Ponzi with a touch of Affinity Fraud. And as I noted earlier, read Little Dorrit. These scams are always the same.
Madoff traded on his reputation as a former American stock broker, investment advisor, non-executive chairman of the NASDAQ stock market. He also swindled Jewish charities and even some Holocaust survivors. The scam goes like this:
Madoff knows how Wall St Works.
Madoff can outsmart the smart guys.
Madoff using a special, secret, proprietary method of making nothing but gains and never having losses. He can’t let you know what his methods are. But you can trust him.
Madoff’s investment portfolio is only for sophisticated investors.
Madoff’s investments are golden.
Madoff’s investments are oversubscribed. You have to know someone to get in.
Madoff did me a special favor and let me invest with him.
Madoff would never cheat us. He’s one of us.