Madoff on Madoff: “It wasn’t about the money”

 

This is the third instalment in a five-part series on the exclusive Financial Times interview From Behind Bars, Madoff spins his story – the second interview Bernie Madoff has given since he was sent to jail for life for fraud charges in 2009.

With more money rolling in, Bernie Madoff continued to play the market using his so-called “black box” theory – a complicated model that most people wouldn’t begin to understand, but is typical of Wall Street players who like to create winning formulas that impress naïve investors.

It was around 1992, Madoff says, that he began his Ponzi scheme, countering the claim by others that he started as early as 1983. Whether or not it started in the 80’s or 90’s, Madoff was able to run a massive Ponzi scheme for a long time, before it unravelled.

After discussing the timing of when it all began, Madoff makes probably the most astonishing statement of the interview – he says, “it wasn’t about the money.”

But the facts speak for themselves.

He had a very lavish lifestyle – which is a common trait of most fraud artists. A penthouse in New York, holiday homes in Palm Beach and Long Island, and his yacht aptly named Bull. Authorities discovered $75 million in a Gibraltar bank account, along with millions in jewellery and luxury goods.

He claims he did it because of his ego.

All of a sudden, he was no longer an outsider, but part of the ‘club’ with many of the big banks knocking at his door – Deutsche Bank, Credit Suisse. As is always the case in a Ponzi scheme, he had to continually raise more money to provide the steady returns (about 10 %) that was making his reputation on Wall Street and attracting a lot of conservative European investors.

Next: Madoff claims others knew what was going on.