David F Mayer: Today, I am visiting the distinguished con-man and Ponzi schemer, Bernie Madoff at his new home in North Carolina.
Madoff: It's a great pleasure to be interviewed by you. I have been looking forward to this since you first called two weeks ago.
DFM: Well, I have been looking forward to this interview as well. It is not every day that I get to speak with the greatest con-man in history.
Madoff: That is very flattering. Thanks.
DFM: Our time together is limited. Let's get down to the interview. Bernie, tell my readers how you feel about pulling off the greatest swindle in all history.
Madoff: Well, I am very proud, to say the least.
DFM: Our public would like to know how you managed it.
Madoff: Actually, it was not really very hard, overall. The hardest part was smiling at all of the suckers without breaking out laughing when they gave me their money.
DFM: The swindle must have been very difficult to pull off, with Federal regulators from the SEC and all that.
Madoff: The SEC guys were absurdly easy to fool. These dolts are all MBAs or accountants, and almost all that they wanted to look at was the books. So, I gave them very nice books to look at. The books were completely consistent and straightforward. My accounting department saw to that. Each and every security purchase and sale was carefully recorded and annotated.
DFM: Well, if that was so, how come they didn't catch on at the beginning?
Madoff: Easy: The books were total lies. They were made up as if we had actually made the trades.
DFM: But didn't the regulators want to see more proof than that? Like stock sale documents?
Madoff: Sure, so we showed them phony settlement sheets and the rest of that malarkey, which are printed on ordinary paper and therefore easy to fake.
DFM: But what about the securities themselves - didn't they insist on looking at the stock certificates?
Madoff: We just took them to the vault and showed them large piles of paper that looked like stock certificates held together by rubber bands. On top of each pile was a real certificate, just one, and on the bottom was another. The sheets in between were just cut paper. They would look at the certificate on top, and then go grab another stack. They were too damned stupid and lazy to go through the certificates one by one. That would have been too much work. I did have a few scary moments in the beginning, standing there smiling, knowing that if the inspector actually looked through any of those piles, I was in trouble. But I just stood there with my friendly, confident smile and they never bothered. After a few years, when they bothered to look at the certificates at all, they just counted the piles and read the summaries that were taped to each pile.
DFM: But what about the stock registrars? Surely, the inspectors took a list of CUSIP numbers and validated them with the stock registrars?
Madoff: They never even tried. That would have been entirely too much effort. I told you that they are stupid and lazy, and I meant it. The whole scam was built on my innocent, sincere, and confident smile along with the gross stupidity and laziness of the regulators. If they had done their jobs the way they were supposed to, I would have been found out within two months. But Bernie Madoff was so cool, so confident, so obviously honest, that they never bothered. My college theater minor really paid off.
DFM: I understand that most of your money came from various charities. Is that true?
Madoff: It certainly is.
DFM: Do you ever feel any pangs of conscience about that?
Madoff: Of course not. The jerks who run these charities are taking nice large salaries, often more than a million a year, to do nothing. If they were actually doing their jobs, they would have performed due diligence on my firm before they invested. They would have insisted on checking a random sample of certificates against the stock registrars' lists. Their acceptance of their salaries constituted fraud just as much as what I did, and they have the nerve to complain about me. They were stupid and lazy, just like the regulators and deserved what they got.
DFM: Weren't you considered a generous donor to charities?
Madoff: Yes. That is so funny. I gave back to these bozos a small part of the money that I stole from them and they thought that I was a great man. They are as dumb as a sack of hammers. In reality, I never gave a nickel of my own money to charity in my life and never will.
DFM: Our readers would love to know how much you managed to get away with. I understand that the entire swindle involved some sixty billion dollars.
Madoff: Yes, but we always gave sixty to ninety percent of the invested money back to the suckers as so-called dividends. That is the way a Ponzi scheme works.
DFM: So your gross was between six and 18 billion dollars.
Madoff: Yes, that was the gross, roughly ten billion. Of course, there were expenses, and these involved keeping the front looking good, and paying the staff. That means expensive offices, deep pile rugs, teakwood desks. I figure, that over the twenty years of the scam, the overhead must have amounted to a couple of hundred million dollars total; ten million or so a year.
DFM: So your net was about ten billion less a hundred million, right?
Madoff: More or less.
DFM: Where is all this loot today?
Madoff: In numerous offshore banks, mostly in the Caribbean.
DFM: So you still have all of it.
Madoff: Almost all of it. They did confiscate a few loose assets like my yacht and so forth. But there is still plenty left. I am planning to give each of my kids a check for one hundred million dollars on July first of this year, and the checks are not going to bounce. It is sort of an payback for all of the difficulties that they were put through by the press and an unappreciative public during the trial.
DFM: Hasn't the Government made any effort to get that money back?
Madoff: Not at all. The prosecutors are just as stupid and lazy as the regulators. All of the fund transfers are on record, and they could find them if they hired experts who looked hard enough. Then they could trace down the money and maybe recover it. But they don't even try.
DFM: How about your suckers, I mean investors? Don't they try to get the money back.
Madoff: These are the same idiots who gave me the money in the first place. They are too damned dumb to bother. Of course, I have it hidden rather well. It would take a very professional job of fund tracking to find it. They don't know how to do this and don't know enough to find somebody who does know how. They just stand around looking hurt, as if it wasn't largely their own faults, which it certainly was.
DFM: How do you feel about your new home here?
Madoff: Frankly, I hate it. This is a medium security prison. Somebody like me belongs in one of the minimum security prisons; you know, the country club prisons with golf courses, tennis courts, swimming pools and so forth. I feel that it is unreasonable to put a person with such wealth and standing as I have into this second-rate jail. I am hoping for a transfer soon to one of the nice joints, where I can play golf all day and high-stakes poker or bridge all evening long.
DFM: Could you please tell our readers something about your personal philosophy of crime?
Madoff: I'll be glad to. I consider crime to be a necessary part of the business ecosystem. Look at the African plain. There are herbivores like wildebeasts and carnivores like lions. The herbivores roam all over the place grazing on whatever vegetation they find, harvesting the solar energy trapped by plants. The carnivores harvest the energy contained in the bodies of the herbivores. The carnivores prevent overpopulation of the herbivores, and remove the weak and the sick, improving the stock. We criminals do the same thing to the business world. We are an essential part of the economic ecosystem.
DFM: I never heard anybody express it that way. That was very insightful.
Madoff: I have always thought that way since I started as a two-bit broker on Wall Street. Somebody is going to take the suckers' money, and it might as well be me. The suckers are certainly too goddamn dumb to hang on to it. We remove the stupid from the business scene so that the intelligent can prosper. It is a noble calling.
DFM: Would you have any advice to our readers who might consider pulling off a scam like yours?
Madoff: Sure. My advise is "Think Big. Don't settle for less than you can get. And remember, anybody dumb enough to trust you with his money, deserves to lose it.
DFM: Any advice for those in other areas of crime?
Madoff: Well, to tell the truth, I never had any experience outside of securities fraud. But there is some general advice I would like to pass on. Each and every criminal, no matter how lowly, should always do his or her very best. Whether it is a simple street con, an ordinary stickup, a major jewelry heist, whaterver, the criminal must pay attention to detail and plan ahead. Each one of us, regardless of the opportunities that Fate has placed before us, has an obligation to make our crimes as magnificent and as profitable as possible. We are not just stealing money, but making our contributions to the Noble Art of Crime.
DFM: Of all of the famous criminals of history, which ones do you admire the most?
Madoff: First of all, there is Charles Ponzi, obviously. By the way, he did not invent the great con that bears his name. It is as old as the hills. But Ponzi perfected it. Then there was Ivar Kreuger, the Match King, who was a contemporary of Ponzi, but somehow has not earned the fame that he deserves. John Law created the first truly gigantic Ponzi scheme two hundred years before Ponzi. He also deserves to be better known. Of course, absolutely every criminal admires the great Big Al Capone, but he was not in my line of work. Many confidence artists have inspired me over the years including Lou Blonger, George C. Parker who sold the Brooklyn Bridge, Soapy Smith, Victor Lustig who sold the Eiffel Tower, and many other greats. From them, I learned audacity and became aware of exactly how stupid the average sucker really is.
DFM: Looking back at the entire caper that is responsbilt for putting you in here, is there anything that you are sorry about?
Madoff: There sure is! I am very sorry that I got caught. And that's all that I am sorry about.
DFM: Well, thank you, Bernie for this inspirational interview. I am sure that our readers will find it both enlightening and beneficial.
Madoff: You are very welcome. Have a good trip back to New York.