Tuesday, March 24, 2009

Madoff's Legacy of Shame

by Diane Dimond

Bernard Madoff (pictured left), a man surrounded by billions of dollars over his long career now has a new number in his life: 61727054 – his inmate number. It goes with his new 8 x 10" glossy - his official mug shot seen at right. And it’s very likely, at 70 years old, he will be an inmate until the day he dies. Couldn't have happened to a more deserving guy and now that the dust has settled on the country’s largest ever financial scam it’s time to take a look at the man himself and how the heck he got away with it.

The past ...

In 1990, Madoff became head of the NASDAQ stock exchange but he isn’t so much a financier as he is a greedy criminal who used his connections to get people at the Securities and Exchange Commission, the only regulatory body that could have stopped him, to look the other way. The warning flags went up over Madoff’s scheme years ago but no one took action.The investors here were victimized by the SEC as much as by Bernard Madoff.

Part of the reason Madoff succeeded was the glittering gossamer cocoon of success he and his family spun around themselves. Potential investors were clamoring at the castle gate to be allowed in. Some claim
Madoff offered them 30 to 40% return on their money and the dollars signs in their eyes blinded them. Many gave Madoff their entire life savings to invest. Now we know he never invested a penny of it.

The present ...

When Bernard
Madoff walked into federal court in Manhattan on March 12, 2009 a large crowd of his victims was outside, bundled up against the icy winds. In contrast, Madoff wore no overcoat, hat or gloves, only one of his many custom tailored suits. It bulged at the front button from the bullet proof vest he wore in case one of his angry investors tried to exact revenge. He knew his next stop would be jail so Madoff had left his expensive watch and wedding band back at his 7 million dollar Manhattan penthouse. He was, in effect, walking naked in the street for all to see his shame. His life’s gamble had not paid off.

There was so much anger when the
court granted Madoff 's request for home confinement following his December arrest. His victims (and many others) exploded that his "punishment" was to stay home in his ultra-luxurious penthouse. When he was allowed out on the street TV cameras caught his every move, much like some Hollywood movie star. His trademark smirk was beamed across the airwaves on an almost nightly basis, solidifying the pure hate for this man. But, after his "GUILTY" pronouncement in court that smirk seemed more like a lip pursing, shoulder-shrugging childlike expression of, “Gee, I got caught.”

Madoff admitted he had methodically bilked 65 billion dollars from thousands of investors plunging them, as well as charitable foundations, hedge funds and union pension funds into financial Armageddon. He knew it was criminal and he was “deeply sorry and ashamed.” He said he'd always, “realized that my arrest and this day would inevitably come.”

No sympathy from me that he had to live his life looking over his shoulder from the deck of his 1.5 million dollar yacht or the porch of his
multi-million dollar European mansion!

Self-made hell ...


Madoff set up his own sword of Damocles, a deadly instrument suspended over his head by a single horsehair. One quick movement could have brought the blade down. To suddenly stop stealing from others would have meant certain exposure. It wasn’t “impossible” to stop the Ponzi scheme, as he told the court, it was too lucrative for him to stop.

Madoff was a genius at the scheme he perpetrated. But he’s a stupid man who failed to calculate the end result. He wasn’t just risking his freedom. He hasn’t just destroyed himself and his gullible clients. He has also destroyed any future for his two 40-something sons , Mark and Andrew
(below) and his elderly brother, Peter, who worked with him. He told the court the rest of his family never knew of his massive deceit. I don’t believe that. And now, who in their right mind would ever want to conduct another financial transaction with anyone named Madoff? What will they do for a living now?

And, a
massive federal investigation has now targeted Madoff’s 67 year old wife, Ruth, a woman definitely used to the finer things in life. Investigators have begun proceedings to separate her from the more than 90 million dollars found to be held in her name. How will she support herself in the end?

I wonder if there were nights when Madoff laid his head down on his 800 thread count pillowcase and realized that his opulent life was really a dead weight around his family’s neck. Probably not. He likely figured, at the age of 70, he’d gotten away with it and his massive crimes would die with him. He might have slept at night with the special contentment that comes from knowing you’ve more than provided for the people you love.

But they are ill-gotten gains. What Bernard Madoff leaves his family is a legacy of shame. The money he brought in doesn’t belong to his family. That would be like the bank robber who, upon returning home from a heist, gives his bag of loot to his wife and then maintains it isn’t his money – it’s hers!

It doesn’t work that way. I say justice comes only after the Madoff family is stripped of its wealth and the money is divvied up amongst the victims.

7 comments:

Ajlouny said...

"a massive federal investigation has now targeted Madoff’s 67 year old wife, Ruth, a woman definitely used to the finer things in life. Investigators have begun proceedings to separate her from the more than 90 million dollars found to be held in her name. How will she support herself in the end?"

Hue Hefner really likes blonds....maybe she'll get a playboy centerfold offer.

Leigh said...

Piece by piece, Congress and administrations dismantled the controls and regulations instituted after the Great Depression. Reaganomics experts told us they weren't needed, that the 'wisdom of the market' would handle it. Meanwhile, the SEC knew so much fraud was taking place that they refused to release figures for it.

Since the Nixon era, economists have forecast fraud and financial undoing. Almost 7 years ago, the Darkside of the Looking Glass (subtitled Corruption in the Capitalist System) explained and predicted what has happened today.

The clues were all there but the lessons remained unlearned because economics is boring and we don't require our politicians to have a freshman level understanding. Madoff is only the symbol; we have ourselves to blame.

FleaStiff said...

The SEC? Hah. Its first chairman was Joseph Kennedy! Anyone ever hear the term Fox in the Henhouse?
The SEC started out useless and became bloated and useless.

The so-called victims were fools who chased absurdly high returns and failed to follow fundamental investment procedures regarding due diligence and diversification. Many of them probably felt that they would get THEIR returns and the Ponzi Scheme would collapse upon someone else.

You can't cheat an honest man may not be entirely true but the greed of his victims surely helped Madoff do this. His Palm Beach socializing may have helped him, but anyone stupid enough to look only to hype deserves what they get! Most of his so-called victims were sophisticated investors who simply were greedy.

TxMichelle said...

FleaStiff,
That is all well and true for SOME investors. Still there were many, many people who knew they were laymen when it came to investing and the stocks. Those same people were told put your money into 401k so they can invest it for you and you will have a nice retirement nest egg. WHO regulated those companies? And how are those people foolish? When they were told over and over that their investments are safe. Case in point AIG. My father had 401k with them for a very long time. He was assured his money was okay. What the hell does he know right? Explain to him how he lost 4000 dollars in three days. That is only the amount I know about. I am sure it was an enormous amount as he had to retire early and take out his funds since he was losing so much so quickly.
How does that make him a fool? He was actually fortunate that he had his investments for so long. Otherwise he would have wound up a pauper in his old age.
What about all those other people that lost everything?
The fact of the matter is these people call themselves professionals. They used other peoples money to get rich and let them fall to their knees at the one time in their life when they should have been comfortable.

This whole affair is unacceptable. It is criminal.

Anonymous said...

"Most of his so-called victims were sophisticated investors who simply were greedy."

Many of the victims that I have seen or heard from were not even aware that they were investing with Madoff. I agree that there were many a blind eye, but that's a broad stroke you are painting these people who have lost their life savings.

hondarooly

piper said...

Greed is an ugly thing.

Hopefully Madoff takes this as a second chance to be a better person. Okay, don't scream at me...It could happen.

Anonymous said...

Madoff's prison number was lucky for somebody........ One guy won the lottery with it!

http://www.wpix.com/landing/?NY-Man-Wins-Lottery-Playing-Madoffs-Pris=1&blockID=248245&feedID=1404