The Madoff Letters: Correspondence Uncovered Reveals the late con man’s efforts to shape his legacy

From his arrival at the Federal Prison Complex in Butner, North Carolina on July 14, 2009 to his death on Wednesday, Bernard Madoff was more than inmate # 61727054.

Inmates reportedly sought financial advice from him. Academics, lawyers and journalists demanded his insight into the epic fraud he had committed.

After decades on Wall Street, Madoff knew something of value when he had one. Much like how he attracted investors to his fraudulent scheme by acting aloof, Madoff was strategically stingy in his responses, handing them out in a carefully crafted attempt to forge his own legacy.

My attempts to contact Madoff began around the time he pleaded guilty on 11 counts in March 2009. They contained several letters to him in prison. He finally replied on October 20, 2012.

“Scott, you are nothing if not stubborn,” he wrote.

Many of the dozens of emails he sent over the next several years were confidential. This condition expired when he died in prison, two weeks before his 83rd birthday. Now his writings can be revealed.

Market maker

In that first email, Madoff attempted to position himself as an authority on the market system he helped develop, leading to his appointment as non-executive chairman of Nasdaq in 1990.

It doesn’t matter that Madoff did more to undermine investor confidence than perhaps any individual in market history. At the time of our first correspondence, the financial world was still plagued by a lack of criminal prosecution after the 2008 financial crisis.

“I find it frustrating that I have chaired and worked on numerous committees and panels throughout my career that have extensively discussed some of the practices that created the events that created the chaos, and some of them There were meetings of the supervisory general councils [sic] and CEOs who now claim they have no idea what happened, “he wrote.

In another embassy on March 22, 2013, Madoff launched what is perhaps the boldest portrayal of his alleged accomplishments.

“There is no need to go into the success and achievements of the company that I have created with my family,” he wrote. “Regardless of the screams and accusations of others, there is enough record and history to create a legacy that will last. A legacy that my family can be proud of, despite the terrible mistake I made and for which I am solely responsible. “

Madoff was always careful to mention the guilt he allegedly felt for his betrayal.

“Scott, please understand that I never denied my guilt or did not express my shame and remorse for the damage I caused,” he wrote on October 23, 2012.

In the same email, however, he expressed frustration with how he was portrayed following his previous attempts to tell his story, including the definitive book on the scandal “The Wizard of Lies” by Diana B. Henriques, published in 2011 . Madoff complained. Despite his extensive collaboration, he was portrayed in the book as “Wall Street’s vicious figurehead”.

The story Madoff really wanted to tell was his claim that he provided full assistance to prosecutors and court appointed trustee Irving Picard in recovering assets for the victims. Madoff claimed that “95% of the recovery so far” was the result of pressure from a handful of major investors to return their profits or else he would expose their “complicity”.

This included Florida philanthropist Jeffry Picower, who was found dead in his swimming pool after a heart attack in 2009. The following year, his widow Barbara Picower agreed to a $ 7.2 billion deal that is the largest single recovery to date.

“Since the day of my arrest, I have offered to assist both the government and the trustee in recovering assets,” Madoff wrote.

Bernard Madoff leaves the US federal court after a bail hearing in New York on January 14, 2009.

Timothy A. Clary | AFP | Getty Images

“During the first few days I was on bail, I contacted these parties and made it clear that they had the following options. Return the funds that cover my clients’ investment principle,” wrote Madoff on November 19, 2012. ” I reminded them that I had received and signed numerous written correspondence and fax instructions from them and their accountants and staff, and stated that after pleading guilty, I had nothing to lose by sharing this information face a long sentence. “

At the time of the settlement, Barbara Picower’s attorney said it wasn’t motivated by guilt or pressure, but because it was the right thing to do.

“She believes in the principle that anyone who receives money from a scam should return it to the rightful owner,” said William Zabel.

Both Picard and federal prosecutors have stated that Madoff has provided no assistance in tracking or recovering any assets and that there is no evidence that he has contacted his former investors. His 2009 objection agreement contained no provision for his cooperation with the government.

Criminal chronology

Prosecutors and Picard have alleged that Madoff’s fraud began as early as the 1970s, but Madoff repeatedly tried to claim that it began much later to circumvent a break in the markets that was spiraling wildly out of control.

“Everything went well for years and then we hit the market crash in 1987,” Madoff said in a long email on March 18, 2013. “My US customers, three families in particular, panicked.”

Madoff said he had developed a complex hedging strategy that allowed his clients to minimize their tax liabilities ahead of the market, but it all started to dissolve when clients tried to reduce their positions. He wrote that he managed to weather the 1987 crash and as the market recovered, “more money poured in than it was known Bernie had a new strategy for hedge funds and high net worth clients.”

“Then the market stalled with the outbreak of the recession and the Gulf War.”

Madoff claimed that is where the scam started: when he falsely told his customers that he was investing their money in the stock market and making oversized returns. In fact, most of the money was simply deposited into a JPMorgan Chase bank account.

“The rest is my tragic story that I can never recover,” he wrote.

Investigators have said that Madoff’s account, like the business he allegedly ran, was pure fiction.

My interactions with Madoff culminated in an extraordinary two-hour meeting with him in a conference room in Butner Prison in early 2013.

During the meeting, he stuck to his alleged timeline of the fraud and allegation that some victims and the liquidating banks were “complicit”. (In 2014, JPMorgan Chase agreed to pay $ 2.6 billion – without admitting wrongdoing – to clarify allegations that the fraud was being ignored.)

Even so, Madoff said he found prison relaxing and that he was catching up on his reading.

“It’s like being in the army, only nobody tries to kill you,” he said.

Death in disgrace

As the years passed and Madoff apparently realized that his efforts to forge his own legacy were largely unsuccessful, the correspondence began to wane from prison.

In 2014, Madoff announced that his health was deteriorating, including stage four kidney disease, a condition that prison doctors were diagnosed as terminally diagnosed in 2019.

The last email came in July of this year in response to a query regarding a note on the US Bureau of Prisons website that he had recently been taken to the prison medical center.

“I’m fine,” he wrote.

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