American Greed: Madoff 10 Years Later - Episode One | Madoff Behind Bars | CNBC Prime

this is the American treat podcast presented by CNBC it's one of the greatest lies ever sold for the past decade Bernie Madoff has been the personification of greed locked away from the world as he serves a 150 year prison sentence but that's not the end of the story I'm CNBC special correspondent Scott Cohn and I'm Chuck Shafer executive producer of the CNBC original series American greed for ten years we've been investigating the Madoff scandal piecing together the puzzle speaking with the key players including Madoff himself in this special podcast series were going behind bars to uncover Madoff today from the lawyers he realized it was all over to the investigators that he is a pathological liar to the victims what he did is despicable there's no other word for it the financial ripple effect of his con in this episode life in a Cell who was Madoff today inside the mind of the world's most notorious congri this is American greed made on 10 years later hello everybody and welcome to our American greed podcast special series Madoff ten years later I'm Chuck che from the executive producer of the show American greed on CNBC and I'm scott kohn CNBC special correspondent hard to believe it it's been a decade since Bernie Madoff 65 billion dollar scam blew up and part one of our series is all about Bernie himself and we get a unique perspective from Scott because he actually did visit him in behind bars in Butner North Carolina yeah this was in 2013 and it was the culmination of about three years of writing letters to him and and a little bit of Correspondence back and forth with the idea of ultimately trying to get in to prison and interview him and we went through this very long process of setting it up first getting his consent to do it and then the Bureau of Prisons the warden at Buckner had to approve it and this was January of 2013 and it was very different Bernie Madoff that I met that day as compared to the last time I had seen him which was when he was in court in 2009 June of 2009 for his sing a surreal event in itself but at that point he was kind of a zombie he was hid he was skinny he was wearing a business suit it was kind of hanging off of them I get to prison that day in that January of 2013 and it was a different Bernie Madoff mm-hmm what let me go back to to just a process a sort of question yeah how how do you appeal to associated path that I'd like to interview you interesting I mean we I sent him a lot of letters I tried to I guess sort of empathize with you know what what what must you be thinking right now what do you want to tell the world about and you know Bernie Madoff is yes he's I think it's fair to say as a sociopath he's a man with a massive ego although he doesn't really exude that in person but he is he is to this day I think very proud of what he did in the financial markets which is very legitimate I mean a lot of the markets that we know today were shaped in large part by Bernie Madoff and I think he wanted to be remembered not just for his massive Ponzi scheme obviously he want to be remembered for the influence that he had in the markets so you know I we talked a lot about that what do you want to say and and so there were there were emails back and forth in the prison email system about what he was thinking about the the way that the case was playing out what his role was always kind of tagged with I feel great remorse and I feel I feel ashamed of what I did and I'm sorry for my victims bought it wasn't you know paid it didn't people were complicit in this and the the trustee Irving Picard who's rounding up the money is is getting things wrong and things like that so it's so it's it's kind of talking about those things that I knew are important to him with the idea of you know I want to get in and visit with you and that culminated again after about three years of effort in 2013 of getting into prison and I had two hours with him let's dig down into just the whole process of getting into this prison versus getting into hardcore you know big lockdown type pause yeah so first first thing they did what was it like at the club they gave you a hand stamp yeah I mean there's so I've been to this level of federal prisoners as a medium medium security prison-- this was a it's not a bad as prisons go not bad clean and all that but yeah you go and you go through security they stamp your hands so that they they they know who's going in and coming out since this was a set visit as opposed to just a regular visitor coming in for visiting hours I was able to bring in a notebook but nothing else a notebook and a pen yeah you know recording devices they we obviously wanted to have him on camera but that's next to impossible in the federal prison system they always say it's about security but I think they were also very sensitive to this high profile inmate Bernie Madoff and not not making him so much giving a shot for exactly so yeah so you go through you go through security and I remember thinking you know as prisons go not horrible it had more of the feel of a college campus or a school building then then what you would think of as a prison I wouldn't call it a club fat a Country Club kind of thing but it was not it was not a old run-down building or a place where you were scared to be okay and there were considerations of why he went to that prison was health one of them the health is one of them I mean you know even at the time he was in his 70s so it's but the Butner prison complex has a couple of medium security units I believe it has a higher security unit for the violent offenders bernie is in the medium security unit one but also Butner has one of the better medical centers in the federal prison system and so because he had some health issues going in because he was older because he was high-profile that probably has something to do with why he was assigned there it's kind of interesting what was the first thing you said to him and it was yeah where'd that come from I I don't know exactly where it came from the first thing I said to him was you look good and as I said when I saw him in court in in 2009 the last time I saw him in court and I was you know probably 15 feet away from him sitting in the jury box at his head his sentencing he looked horrible this had obviously taken a toll on him at that point he had been in the been combination of either under house arrest or in the Metropolitan Corrections the detention facility which is not a happy place to be and I think the weight of all of this at least at that point had come down and him so he looked he looked like a shell of himself when I saw him in prison he looked more like the Bernie Madoff of old there's a famous video of him 2007 doing a seminar on regulation and roundtable and you see Bernie sitting around this was kind of around a round table and looking very sure of himself yeah talking about the future of markets and things like that this was more of what what Bernie Madoff in 2013 looked like Bernie Madoff was never a very charismatic guy in prison he just looked like a regular kind of grandfatherly guy did he so he didn't come across with any special aura he didn't light up a room he didn't is that not fair to say not in the least bit and I you know from people who met him in years past when he was running his his Ponzi scheme and when he was a Wall Street luminary he wasn't a larger-than-life personality he did not have any sort of aura certainly not not when I saw him in court and certainly not when I saw him when I saw him in person so yeah the first thing I said to him you look good and I'm like well that kind of a weird thing to say I just blurted it out but we just sort of went with it and and you do really feel like you're you're just talking to a regular guy so the allure was the money dealer was the money absolutely you know the allure was I got a guy you know I've got this this guy on Wall Street who beats the market all the time and you know and not everyone can get in with him and it's it's his performance it's as we've heard and we talked to two victims van in now they all talk about he was the the head of the Nasdaq he was the non-executive chairman of the NASDAQ you know he was somebody who who had who was a name on Wall Street wasn't nestled name even at CNBC he wasn't somebody that we covered all the time and there was one interview from from 1999 and you look back on that and you know this was a guy who was really on the cutting edge of markets in 1999 talking about how all we're all gonna be able to trade online someday people have been curious about they've said we've been quiet you know Madoff has been very quiet you know recently and people since we've always been in the forefront of a lot of these technological changes people were was sort of wondering what we were doing but his allure was you knew he had some stature you knew he was in the business and he can make you little extra money even when the markets down any wars tailored suits from London right yeah yeah I mean he was he was put together when he was yeah his watches his suits is his office was he insisted on a certain kind of aura around of the office so he he had he certainly had that sort of sense of style so but but he wasn't I wouldn't I would say he never was exactly somebody with with an aura with a mystique beyond I can make you some money and that was the impression that I got when I finally met him in person and spent that time with them was that this guy is not polished he's not you know he's just a guy were you looking for wisdom or were you looking for follow the money where where are we what am I looking for when you met him um it was just who is this guy what does he want to say what is he what is his take on all of this because at this point we already we we had talked on the phone a couple of times we had these these emails back and forth and you know and he had a set sort of narrative that he wanted to get out there which was at odds with everything that the prosecutors the the trustee Irving Picard everything that independent fact checkers and investigators found Bernie had a different take on and he wanted to project himself as somebody who felt bad about what he did felt bad for the victims but look I'm getting them their money back I'm I'm they wouldn't be able to find all this money without me which is not true but by all accounts this wasn't Bernie Madoff telling you where the bodies were buried he didn't do that but he wanted to talk about that he wanted to talk about how the system worked and how the system failed and the system did fail there's no question about that that the system failed but he wanted to still put his kind of spin on things his put it putting himself in the best possible light while always trying to put out there whenever he could I feel bad I feel I feel horrible for the victims I'm ashamed of what I did and that type of thing but then still sort of nudge things his way we sat down with Mark litt who was the prosecuting attorney and you talked to him about his cooperation yeah I talked to him about yeah and and Mark Lippert Auctus case publicly until this ten-year anniversary he was the lead prosecutor and litt talked about meeting madoff at the time after he had confessed and asking him about asking him questions and he said that you know fairly quickly it became clear that he wasn't telling the truth he didn't make anybody any money he never invested a dollar in this business I believe that he's a pathological liar the same story came from Irving Picard the trustee who's been rounding up all this money they met with Madoff I think more than once and determined that there wasn't any use in it because he wasn't giving them that much information what what he wanted what madoff wanted to say when he talked to us and this sort of running theme was that there were others that were complicit and made offs attorney I release Sorkin who's still in touch with him tells a similar story that their work there were clients that it wasn't just about Bernie Madoff making me a little bit of extra money it was about hey Bernie I need a I need to show a loss on my taxes can you reconstruct these trades for me or show you know help me create a tax loss to offset some income he created fictitious documents and the customer investor / investor knew about it and the government never pursued that why I don't know but there were investors who did profit through that type of trade which is illegal which is illegal and you know and but these these clients were who these supposed victims were complicit in that way you know his his main bank was JP Morgan Chase JP Morgan Chase ultimately you entered into a deferred prosecution agreement with the US Attorney's Office in New York they were charged with two felony counts of not not maintaining adequate money longer controls and things like that not knowing their custom which you required to do it was deferred prosecution so they had two years to show that they had cleaned up their act they'd implemented these controls and they paid 2.6 billion dollars in fines so so it was a significant amount of money for you and me it was a significant amount of money for you and me for JPMorgan Chase it's about 10 days worth of revenue nonetheless 2.6 billion dollars was money that went toward toward victims and so there is certainly some value in that we don't know what what the bank did to clean up its act we don't know because that was never disclosed the charges were dropped after 2 years after the government said yes they've they've implemented these controls they've paid their money we're dropping the case and so so Madoff's position and what he talked about during this interview was that his fraud the the fiction of the Ponzi scheme was something that he did and and that no one else could even even Peter Madoff who was the compliance officer at the investment advisory business and did wind up pleading guilty and going to prison Bernie Madoff's younger brother they couldn't have known and the sun's absolutely couldn't have known what about the relationship between the father and the sons was it an open relationship that they could go up to his floor and say what's going on here apparently not and and we don't know we know that well we know that you could go back to December 10th 2008 when the financial crisis is in full swing Madoff is being pounded with redemptions people want their money back and he confesses to to his sons this has all been a giant Ponzi scheme there's no money to redo there's no money to return he there was no way out at that point now supposedly he wanted some time then to unwind things he let them know he was going to make sure that I guess favorite clients got their money he was able to wind down the business the sons wanted nothing of that because if they had at that point yeah gone along with it they would have been complicit in the crime and so the story goes that the sons called the feds and and and Madoff was arrested the next day he wanted a week was this original plan supposedly he wanted a week he and and we think that it was again to wind things down to make payments to people that he felt should should have their money maybe he thought in some way he could still get out of this this there's death spiral although that's probably not the case yeah he wanted he still wanted to do things on his own terms and the sons if again you you believe the story and the sons aren't here to tell us about it the son said no they called the FBI right then and there and the next day he was in custody and there's still people question whether the sons know anything there's no on forever I guess and and it will and you know and this the story of the sons is just is just tragic first there's mark Madoff the older son who killed himself in on the second anniversary in 2010 his his son was in the other room hanged himself and and it wasn't so much and I believe this III Balazs I said I believe it's plausible that he didn't know but still everyone was coming at him and this this scandal he was D knew he was never going to escape this by changing his name or and he was still gonna be mark madoff Bernie Madoff son and around that time the the the the trustee Irving Picard was ratcheting up his pressure against the sons and had sued both of the sons saying that they they received fraudulent or fraudulent benefits from the scheme and that they should be paying some money back and Picard was ratcheting that up to the point where he was going to go after the family going after the children going after the families owing money or their freedom going after the family's money it was primary because he wasn't a criminal prosecutor he was the guy rounding up the money but he was going after not just Madoff sons but made offs grand children and it was too much for mark made on him so so he hanged himself getting back to Bernie what was his take on mark suicide his take on unmarked suicide was that he's sending a message and and and I brought in my notes da yeah he was sending a message and he you know he did it on the second anniversary of his father's arrest his father's confession he was sending a message we don't know exactly what that message was I think it's just you know that's just a horribly tragic story of these sons by all accounts they revered their father this was the patriarch of the family they took after him in the family business and and now here they find out dad's whole thing was a lie and victimized thousands and thousands of people and if you believe them and you believe that the family that the sons knew nothing about it imagine what it would be like to live with that and for Mark Madoff it was just too much he just couldn't so so Madoff you know he felt I think he felt badly about it he told me at the time how he he hoped that someday he would be able to connect with his grandchildren but but Andrew Madoff was and insistent that that Ruth British wife have no contact with with me and basically said to Ruth if you want to see your grandchildren again you will have no contact with with our Father mm-hmm and for the most part she she stuck with that mm-hm and and Bernie and Bernie was you know he wanted to know his grandchildren he he said to me that he hoped that someday they would somehow understand and and that someday before he died that he would get to see them I can't imagine that'll ever happen in your email exchanges he talked to you about not regretting pleading guilty where did that come from yeah he said at one point I wish I hadn't pled guilty and and this came from Bernie Madoff always wanting to try and control the narrative and at that point the narrative was being controlled largely by Irving Picard the trustee the cific trustee who Securities investor Protection corporation whose rounding up assets for the victims and and and was telling a story of Bernie Madoff's fraud the fictitious trades the all the things that he did I was also told by people like Harry Markopolos who was a fraud investigator based in Boston who claimed to have alerted the SEC years before these were the people who were telling the story of Bernie Madoff and by pleading guilty he kind of forfeited the ability to help shape that and now this was a way for him to do that and so at one point he said to me I wish I hadn't pled guilty not that he didn't admit that he did his crime but I think it came from the fact that he wanted to be he wanted to have a voice in this he wanted to have a say in this of course you and I and the prosecutors and the victims you figure well he kind of forfeited that you know he he should just go away mark lit talks about that the prosecutor how he says he's a you know he's a pathological liar why does everyone want to anybody want to hear from him I don't believe people who are pathological liars should be given a soapbox and I don't think people should be interested in what they have say and I don't think people should report what they have to say why did reporters like me want to go to prison and give this guy a soapbox and we would hurt we would hear that every time that I would get an email and we reported on CNBC and and when we did this victims are victimized again victims are victimized again why are you giving this guy a platform and it's a fair question I do think that it's valuable to get into his head to know how to protect yourself to know what makes somebody like this tick that would steal all this money and ruin so many lives really in service of his own ego but it is a fair point and something that we we always thought about and tried to be careful with to not just give him a soapbox but I think that getting back to your question when he said I sometimes regret pleading guilty it was it was frustration with the fact that he had lost control of the narrative and he lost control it one thing we know about Bernie Madoff from the the way that he wanted his office laid out the way that he from the the everything down to the interior decoration of his office he was somebody who wanted control and in this instance he had no control anymore other people were telling his story and I think that's why he wanted to talk I guess when you live you get accustomed to a certain way and a certain run of people kissing your ass you know you don't want to give it up so you want to just keep the respect the money you know yeah I mean you know more we can tweak as much as we try and as much as we're doing here trying to get into his head we can't and I try not to do that but but just again you look you think about your own common sense that's what they tell jurors to do yeah yeah he had a lot going for him he had a nice life he wasn't somebody who was ostentatious about his wealth but he had a bunch of yachts he had a home in Palm Beach a home in Montauk a home in Manhattan was living well and he and his family he and his family were living well and his family revered him his sons his grandchildren his wife his brother mmm his employees and you know he was faced with a choice at that point of do I am i honest and do i forfeit all of that by being honest or do I take this different course so whatever fraud he was doing if he was doing fraud before that if you believe the regulator's and the prosecutors and the investigators that it went on for longer or as as we said if you just think about does somebody suddenly become a dastardly criminal after 34 years of being pure as the driven snow I don't think so you know he was faced with this choice and he took this course and the rest is history so now he's in prison right and his demeanor his he you said he looked what do you look like the weight of the world was off him yes and he told me that you know he said once you get past the fact that that I'm gonna die in here and once I get past the fact that I'm cut off from my family and that my son Mark had taken his own life at that point Andrew was still alive but did but suffering from from cancer and he would die about a year after that at just 48 years old he said once you get past that it's it's a lot less stress he said you know he used to be always paying attention to the news and the ticker and all of that back when he was on Wall Street now he can read so he had just finished a biography of Winston Churchill and he said to me he said this is kind of like being in the army except you're not afraid of getting killed as far as day to day there were there were talks that he'd gotten into fights and things of that nature what what what was your findings on that you know it's he said that wasn't the case there was a talk about at some point fairly early on that he had been in a fight with an inmate Ben Leaton up and I think he he spent some time in that Medical Center that we talked about that wasn't in as far as I could tell that wasn't the case he may have fallen or something like that but it wasn't it wasn't so much an altercation he basically felt as though as life goes if he was gonna wind up in in prison this isn't so bad this is a lot less stressful he had friends he he claimed that he was friends with Jonathan Pollard the the Israeli spy through pin other conflicting reports about that that maybe they weren't on good terms but he said that they were friends and and we're told today by by Ike Sorkin his attorney that he commands a certain respect in prison I'm told that the prison system the inmates respect age and intelligence as a respect from the prison population and I think he's got that he's he's an older inmate clearly he's a high profile inmate clearly he carried out the scam of the century and so he has a certain stature there people have financial questions they might as well ask Bernie Madoff he knows about the stock market he knows about finance so so as as life goes for somebody who pulled off what he did in the massive Ponzi scheme and the lives that he ruined yes he'll never be a free man again yes he'll die in prison but there are worse places for him to be true in the homes of his victims yeah you've you've interviewed a whole heck of a lot of white-collar criminals in your career what did you is there anything that strikes out are there any redeeming qualities that you found in those prisoners and and where are you with Bernie in that yeah I mean look i I've I've met dealt with interacted with most white-collar criminals not totally to my own horn here but you cover this beat for a while and you you get to know these people and you do get to see why they to where they were in term with its a CEO or a CFO or somebody like that and a lot of they're all smart Madoff is different Madoff is he certainly as I said came off like kind of a regular guy you know old man from Queens told interesting stories and he has had some pretty fundamental important impacts on the markets as we know them today but it's hard to find a lot of redeeming qualities in him in terms of what he did how he rationalizes it and he will tell you as long as long as the day is that he's not rationalizing it he takes responsibility but I never really felt like he took it to heart certainly not when I met him in prison when I correspondent with him afterwards maybe when he was standing in that courtroom getting his sentence and and looking like the weight of the world really was on his shoulders and feeling the feeling the wrath of his victims seeing his victims and that moment during the sentencing when he he turns to the victims after speaking to the judge and the so-called allocution saying what he did he had won at that point turns around and says I will turn and face you I'm sorry and I know that doesn't help you and I think that was a moment of honesty and that was that was Bernie really facing up to what happened but in my my one-on-one with him since whether it's by email by phone or in person I didn't feel that so how did you leave it with him on your visit there on my visit there it was you know we were told by the there was a public information officer in the room kind of in the back of this big conference room the whole time and she said okay your time is up we had two hours I obviously felt like we could have gone longer but that was such as it was shook hands I said can I come see you again he said absolutely that of course hasn't happened mm-hmm - have a good day we'll talk to you soon and that was pretty much it and I was left to think about what I had just experienced and who I would just spent two hours face-to-face with and he was it was an amazing experience it was it was unsettling for sure yeah it was you know this was the worst financial criminal of all time and yeah i sat across the table just like we're sitting across the table for two hours you know and we talked about I've talked to financial white-collar criminals before sometimes it's just fascinating it's fascinating to get into their heads and what they what they know this didn't feel like it was fascinating this is a little more unsettling this felt like it always was him trying to get his story out there and and bear in mind this at this this information of the time and while all the emails at his insistence were off-the-record which is why we didn't report on them at the time and subsequently he said you can use this and we did but he part of it was that his employees were still to go on trial at that point his son Andrew was still alive he so he wanted to spin me without being out there and again that's control that's Bernie Madoff in control and so I think that was sort of what you came away with was all right this guy was trying to control you he's trying to control the story you can't use it so in that respect it was sort of unsettling but in many ways the experience of a lifetime for someone who covers white-collar crime he's the big fish he's the big fish yeah there was an email one of the last emails that that he sent I just asked him how he was doing I don't do that every so often what's on your mind these days he writes back I'm hanging in there I missed my family terribly how on earth did I get myself into this nightmare Bernie Wow and and think about that though it's it's all about him yeah how did I get myself into this nightmare where's my family and this is this was some time after Andrew had died yeah his his younger son died tragically of cancer not you know I feel so horrible for my victims I mean I want them wanted to do such-and-such know how did I get myself into this nightmare and I feel I feel terribly I miss my family I think his victims would say cry me a river and as far as the next Bernie Madoff could that ever happen again I mean I think find out I think that's what we're gonna find out and I know we're gonna talk about that could it happen again could there was this a perfect storm or or are we going to see this again there are a lot of opinions about that there's a lot of people want to separate you from your money and we'll talk about that in our next episode so you think you could not get scammed by a birdie Madoff well we're gonna ask about that on our next episode in this special American greed podcast series we hope you'll subscribe today and and listen to all of our episodes thanks for listening to the American Reid podcast presented by CNBC you

Channel: CNBC Ambition

Views: 91,900

Keywords: CNBC Prime, news, Personal Finance, Entrepreneur, AMERICAN GREED, BERNIE MADOFF, bernie madoff doc, CNBC, TRUE CRIME, SERIAL, POP CULTURE, bernie madoff documentary, bernie madoff interview, bernie madoff movie, ponzi scheme, ruth madoff, business, american greed full episodes, american greed 2018, greed, fraud, american true crime, true crime tv, scams, crime, documentary, crime podcast, true crime podcast, cnbc podcast, cnbc prime podcast, true crime podcasts, true crime story

Id: Az7p81goouY

Length: 34min 19sec (2059 seconds)

Published: Mon Dec 10 2018