Wednesday, February 16, 2011
From Prison, Madoff Says Banks ‘Had to Know’ of Fraud
Convicted fraudster Bernard L. Madoff believes banks and hedge funds were complicit in his elaborate multi-billion dollar Ponzi scheme, The New York Times reported Tuesday.
In an interview from prison in North Carolina, the 72-year-old pointed to the "willful blindness" of many financial institutions who dealt with his investment advisory business, highlighting their failure to examine discrepancies between his regulatory filings and other information available to them.
"They had to know," Madoff said. "But the attitude was sort of, 'If you're doing something wrong, we don't want to know.'"
Madoff, who is serving a 150-year sentence in Butner Federal Correctional Institution, has previously claimed that he was the only person involved in the massive fraud.
In the interview with The Times, he maintains that his family members knew nothing about his crimes and says he never thought the collapse of his Ponzi scheme and his arrest in December 2008 would cause the sort of destruction that has since befallen his relatives.
In particular, Madoff lashed out at what he called some "disgraceful" coverage of the death of his son Mark, who committed suicide on Dec. 11.
He disputed reports that he refused to attend any funeral services for Mark, saying prison authorities had said they would not approve such a request.
Madoff, who acknowledged his guilt during the interview and said nothing could excuse his crimes, also said he was determined to aid official efforts to recover assets. However, he reportedly made little mention of the financial pain he caused thousands of his more modest investors.
In March 2009, he pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars.
A Ponzi scheme pays returns to separate investors, not from any actual profit earned by the organization but from their own money or money paid by subsequent investors.