He Madoff With All Their Money

Wednesday, March 11, 2009

Bernard Madoff is expected to plead guilty to 11 felony counts in the largest Ponzi scheme in U.S. history tomorrow. Vanity Fair contributing editor Mark Seal interviewed dozens of Madoff’s victims (including some of his closest friends) for his article "Madoff's World" which appears in the April issue of the magazine. We'll also be joined by Madoff investor and victim Donna McBride.


Donna McBride and Mark Seal

Comments [31]

Conrad from Dania Beach, FL

The biggest ponzi scheme of all is the Social Security system. Those that are paying in now are only paying for the people taking it out now. We all know the problems that are coming in the near future with Social Security. Why not call it what it is? A ponzi scheme!

Apr. 01 2009 07:12 PM
Jeffrey Paull from Toronto, Canada

The Madoff Variations on a Ponzi Scheme
seems like a very very costly version of a
Shepard-Risset glissando.
So it must be time for Jean-Claude Risset - or maybe Philip Glass to write an opera that has a seemingly infinite succession of acts and arias, but there's a suprise ending!

Mar. 18 2009 02:20 PM
Tim from Greenpoint

Listening to and feeling sorry for the poor nice lady from Florida that lost her life savings to Madoff, I stopped when she said she had trusted him for 10 to 20 years. So, that's 10-12% income per year for, say, 15 years? That's a 50% return on her money. Which came from the poor suckers that bought into the ponzi scheme later in the day. She at least got to send her kids to college, pay the mortgage or whatever, when she could just have well have been duped out of it all in one shot by, say, Global Crossings in 2000. We should be feeling sorry for those that invested recently, not the old timers. If anything, Madoff's loyal investors were unwittingly complicit in the scam.

Mar. 13 2009 09:22 AM


I agree about the SEC. I think what disturbs me about the Madoff situation is how much attention he gets - when the real issue is our failure to demand that government agencies charged with regulating might actually regulate.

To be redundant: Madoff is only a symptom, and a bad topic in a way, because it indulges anti-semites who would prefer to look at Madoff than to look at our collective failure to ask for accountability.

Mar. 11 2009 01:12 PM
jgarbuz from Queens

Oy vey! Some of the big "machers" and "shvitzers" and "mavens" took a fall! Hey, all fools and their money are eventually parted. No exceptions, including those who think they are so, so smart! There is, and never was, a free lunch. If it sounds too good to be true, it is definitely false! Oy vey iz meer!

Mar. 11 2009 01:08 PM
Jeff Putterman from Queens

One more interesting point about Madoff: his lawyer, Ira Lee Sorkin, ran the NY office of the SEC during the mid 1980s and never caught the fraud.

His parents had money with Madoff, and it was all withdrawn in 2007. Which means the Sorkin family received money stolen from other investors, just as Sorkin is now receiving money, for his fees, stolen from other Madoff investors.

Sorkin is the kind of clown who inhabited the SEC. When he went to work, he went to the bathroom, looked in the mirrior, and adjusted his round red nose.

Mar. 11 2009 01:02 PM
Phil Henshaw from NYC

There actually is a fairly clear sign of a far bigger Ponzi scheme, that a variety of people are now mentioning. It's our whole way of making money by multiplying money. For hundreds of years, actually, we've had the basic business model of promising multiplying business, and found our resources and talents to be increasingly responsive to match sometimes, and to not match at others. It seems that it’s when there’s a pause in the responsiveness of the environments to our efforts when the money makers shift to making false promises…. That’s been happening for a while now, and completely natural, and so the whole distortion of money and promises that collapsed seeming to be from it, our standard model for money is to still have it multiply forever. Money people and governments make ANY promise necessary to try to gain people's confidence in that!

So... yawn... yawn... I'm just guessing I won’t be the one who gets short changed! I'm just not so sure any more. ;-)

All joking aside, there is some good basic scientific research on how we got into this fix of having a measure of prosperity that conflicts with reality, and how it might be possible to correct the misinformation our standard business plan represents. pfh

Mar. 11 2009 12:58 PM
Jeff Putterman from Queens


As a jew, I can assure you that the SEC ignored every tip I ever gave them. And I can document that every tip I ever gave them turned out to be true (ie, about fraudulent companies trading publicly, fake performance results, insider trading).

The SEC, as an organization, is dumber than the Bush family.

Mar. 11 2009 12:55 PM
Jeff Putterman from Queens

I will predict this in public now, as I have been doing in private for weeks.

If Madoff really did take Russian mob money out of europe and drug money out of latin america (as Harry Markopolos suggested) then once he and his family are all locked up in prison cells, they will be summarily executed by other inmates, working for one of those two groups.

That is why he stays in his apartment now, and why he has security guards. You don't cross those people and live to talk about it.

Plus his family, and obviously some of his employees, deserve this.

Mar. 11 2009 12:53 PM

Did the guest really say she wants a government bailout?

Mar. 11 2009 12:40 PM

Maybe the real issue here wasn't anti-semitism, but anti-Hellenism.
When I first heard about Harry Markopolos, I thought:
Of course the SEC isn't going to listen to some Greek from Boston ranting about "the world's biggest Ponzi scheme."
Now if only Markopolos' last name had been WASP-y or Jewish, they would have listened to him...

Mar. 11 2009 12:37 PM
inquisigal from Brooklyn

Can your guests clarify what they mean by saying the government should get involved? To merely regulate, or to reimburse victims from some sort of government fund? I have to say, I don't happen to agree the federal government should get involved in this private matter - especially financially. If someone takes a risk with a large amount of money, that's not the government or tax payers' problem...

Mar. 11 2009 12:35 PM

it would be difficult to spend 50 billion, but it WOULD be possible to run through 17 billion by paying out large returns to previous investors, and then having to cash out investors when they were leaving.
Many of the investigators are now estimating that the total amount of money consumed by the scheme wasn't 50 billion, but around 17 billion.
The 50 billion is artificial, based on profits claimed that Madoff made for his investors.

Mar. 11 2009 12:34 PM
hjs from 11211

why would anyone invest ALL their money with one person/firm?

Mar. 11 2009 12:32 PM

Despite the large numbers of charities and individuals harmed by Madoff, I think we should bear in mind that Madoff is unfortunately only a symptom of a larger problem. A much larger problem.
Which is the failure of the SEC to actually regulate.
I, too, am fascinated by Madoff, but to be fair, he's only interesting as an emblem of a few things:
1) the failure of government to regulate
2) our own collective greed - even though most people weren't invested with Madoff, their 401Ks did cause investors to turn a blind eye to the need for regulation and good corporate citizenship - as long as their 401K was rising.

Mar. 11 2009 12:31 PM
Gary from UWS


If Madoff never invested the money--and thus didn't lose it in the market--where's the money? He and his wife couldn't have spent $50 billion all by themselves.

Mar. 11 2009 12:29 PM
Maddy from long island

I'd also like to know how the $50 billion lost is calculated. Rate of return should not be included.
Would like to hear from people who decided not to invest with Madoff and why they did not.

Mar. 11 2009 12:25 PM

It's the ultimate irony that Laura Goldman was falsely accused of anti-semitism. Because the failure to listen to her legitimate concerns about Madoff led to a surfeit of anti-semitic remarks from all corners of the world.
The lesson, I guess, is that criminals, regardless of ethnic origin, will defend themselves under the guise of an injured minority. Think of Al Pacino in Godfather II testifying before congress, and claiming that congress is prejudiced against Italians. Or in real life, the obvious example, I guess, is OJ Simpson.

Mar. 11 2009 12:23 PM
Mickey Bitsko from Downtown Manhattan

Interesting that you mention antisemitism. There were a number of antisemitic remarks made on Huffington Post about Maddoff. At the same time the story broke, antisemitic remarks were likewise made about Rahm Emanuel.

Mar. 11 2009 12:22 PM
rachel from manhattan

Regarding Madoff.. they should hit him where it hurts.. nevermind the jail time..strip all his and his wife's assets.

Mar. 11 2009 12:21 PM
katie from scarsdale, ny

I am also very interested in Mr. Madoff's psychological profile, and suggest that he fits the description of someone who suffers from Narcissistic personality disorder. I hope we don't come to find that this disease is an epidemic on Wall Street.

Mar. 11 2009 12:20 PM
Courtney Winston from Manhattan

I'm curious what all the employees at Madoff's actually did if there is doubt that trades were made, and he acted alone.

Mar. 11 2009 12:19 PM
rachel from manhattan

I second Jim from Bklyn (#4). I empathize with anyone being taken by another. However, if an investment does nothing but go up, up,up.. you have to wonder. Regardless of what friends and family say.

Nobody questioned anything when things were good. Everyone was "in" on it.

And why on earth would anyone put such amounts of money is one basket? I guess greed overrides common sense.

Mar. 11 2009 12:19 PM

let's not forget that the only reason we are discussing is b/c madoff turned himself in.
was he just waiting to get caught and when it never happened he finally did himself in? if so, was it for the relief?

whatever -- might be a good idea to have every new york felon headed for the big house for a serious offense to take a page out of bernie madoff's book -- and spend a month in his penthouse.

Remove that wife and I'd love to spend even a day in such a place!

Mar. 11 2009 12:16 PM

It's a misunderstanding to say there was ever 50 billion stolen. There was probably 17 billion stolen/swallowed up in this massive scheme. I believe the 50 billion includes the phony profits that Madoff customers thought they had accrued, and then reinvested with Madoff.
That larger number never existed. It's what was claimed. This has been covered in the Times.

Mar. 11 2009 12:16 PM
Norman from Manhattan

What about the theory that Madoff got into this by cutting corners when his investments couldn't make their targets, and he got deeper and deeper into it as he tried to catch up.

Mar. 11 2009 12:15 PM
m phil from nyc

tedious, tedious.....
this has been covered by other outlets dozens of times...

Mar. 11 2009 12:13 PM
Jim from Brooklyn

Why should we feel sympathy for the money-grubbering leaches who overlooked all reality and common sense in their lust to make ever more money?

I have no sympathy at all of the greedy.

By contrast, if someone thought he or she was wisely investing in some _other_ fund with reasonable expectations, then he or she deserves great sympathy.

There is now _ample_ proof that people _were_ alerted to the Madoff scam. The New York Times and the Wall Street Journal were given the same report in 2003. They chose to ignore it.

Mar. 11 2009 12:12 PM
Kim Doggett from East Village

I'd like a rundown of the numbers. They don't add up to me. Maydoff couldn't have spent 50 billion and if he didn't invest it why isn't more left sitting in some account? Could all 50 billion have been paid out to earlier investors?

Mar. 11 2009 11:40 AM
Mary from Bronx

Though I have great sympathy with all of Madoff's victims, I wonder why anyone would fail to diversify his/her investments, and put everything with one person. The first rule of investing I learned was "Don't put all your 'eggs' in one basket."

On another topic, I would love to hear a psychiatrist discuss whether Madoff has an antisocial (formerly, sociopathic) personality disorder. It seems to me that his total disregard for the rights of others must be symptomatic of a psychological disorder.

Mar. 11 2009 10:46 AM
Robby from Brooklyn

I am curious as to how Bernie is the only person being charged with a crime. How was he able to keep his family and all his employees in the dark about this? Who generated all those phony quarterly statements for all those years?

Mar. 11 2009 09:53 AM

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