Bernie Madoff Breaks His Silence, Says Banks and Hedge Funds Turned a Blind Eye
Bernard Madoff, the Ponzi villain with Palm Beach roots in real estate and scorned investors, told the New York Times that banks and hedge funds handling his fortune turned a blind (an perhaps unlawful) eye to his criminal schemes. The Times article is based on a prison interview with the criminal financier; it was his first media interview since his arrest in December 2008.
While Madoff maintains that his family knew nothing about his actions, he says certain banks and hedge funds exhibited "willful blindness" when managing his fortune. "They had to know," Madoff told the Times. "But the attitude was sort of, 'If you're doing something wrong, we don't want to know."
The Times reporter, Diana B. Henriques, notes that Madoff acknowledged his guilt and said that nothing could excuse his crimes, but that he directed the conversation towards the institutions he dealt with rather than the pain he caused his investors. Essentially pointing a finger in a general direction, he neglected to mention any specific banks or hedge funds.
Then again, as Henriques acknowledges, Madoff isn't the most trustworthy person. So, take everything he says with a grain of salt.
Irving H. Picard, the trustee responsible for restoring funds to Madoff's investors, and his law firm, Baker & Hostetler, "filed hundreds of civil lawsuits seeking approximately $90 billion in damages and fictional profits withdrawn from Mr. Madoff's scheme over the years," according to the Times. Defendants include "the Wilpon family, the owners of the New York Mets, JPMorgan Chase, which served for decades as Mr. Madoff's primary banker; and Sonja Kohn, the Viennese financier at the hub of a network of hedge funds that invested heavily with Mr. Madoff."
Whether banks, funds, and other institutions will be held responsible for compensating investors remains to be seen, but in the mean time, no banks or hedge funds who have done business with Madoff have been accused of wrongdoing by federal prosecutors. Nonetheless, Madoff told the Times, "I am saying that the banks and funds were complicit in one form or another and my information to Picard when he was here [at the prison? - see below] established this."
Read the whole article here. It's essentially (and unfortunately) one of those pieces that capture a certain something about our generation and the state of the world...if you want to get that deep about it.
Late breaking news: Picard claims he never met face-to-face with Madoff in prison, as the Times article states. For such a high-profile story, this could be a fairly embarrassing error and/or a slight lie that Madoff told the reporter.
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