Bernie Madoff always knew he’d be caught. It couldn’t work. It was all a bottle of smoke and he knew it.
Madoff mightn’t admit it, but he must have known since the very first day he accepted money from a victim that the whole thing had to collapse. He’s not a fool.
If you take money from people, promise them returns on their investments, and then just stick their money in your bank account, it’s all going to fall apart eventually. You have to keep getting more and more investors to pay the original people the profits you promised them, and like all pyramid schemes, those who come in last are going to be burned.
I think this is a case of monumental denial by one man, but there are other questions I don’t know the answer to. For instance, did anyone at Chase Bank ask what $170 billion was doing in Madoff’s account? Did they ask where all this money was coming from? $170 billion! What about the low-level staff on the 17th floor where the Ponzi scheme was operating from? Will their boss, Annette Bongiorno, be charged with anything?
Did his auditors ever look at his dealings? Did any regulator ever demand to see details of the investments he was supposed to have made on behalf of his clients? Did any employee of his firm — a hugely influential company on Wall Street — ever wonder where their wages were coming from? Did anyone in the New York financial community ever talk to anyone else when it must have been obvious to everyone that the entire thing was a fiction?
The whole thing runs on greed and denial which is why the world is now in complete chaos. After the things we’ve seen over the last year, we now know that Gordon Gekko was a gross misrepresentation of the typical Wall Street financier. In reality, they’re far worse.
Bernie Madoff set up his first company at the age of 22, and everyone was happy to deal with this flim-flam artist, because at heart they were all the very same as him, just as they still are. In the end, it was two of his sons who notified the FBI about what Madoff was up to, and I wonder if that could happen here, or even if the authorities would have the wit to respond so quickly when tipped off.
I doubt it.
Madoff seems to be genuinely remorseful, though that’s no comfort to all the people who lost their life savings, their futures and their security in old age because of him. It’s even less comfort to the families of those who committed suicide having lost all they possessed.
Yet it seems to me that many of these people who signed up with Bernie Madoff on the promise of a fast buck were also in a state of denial. Bernie Madoff was a man on a treadmill, running faster and faster to stay upright, and in the end, I think he was relieved to fall off.
He’s too old to be running that fast.
Elsewhere: The Securities and Exchange Commission knew about the Madoff case as far back as 2004, but the investigation was covered up and a staff member pressurised to leave the job. Washington Post.