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Bernie Madoff and the largest known Ponzi scheme in history | 60 Minutes Full Episodes — Transcript

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0:12it's been two and a half months since
0:14Bernard El madeof was picked up and
0:16charged with what's believed to be the
0:18largest financial fraud in history yet
0:21we still don't know much more about the
0:23alleged 50 billion scam than what made
0:26off initially told the FBI agents who
0:28arrested him that there are still no
0:30indictments as Federal prosecutors
0:32continue to unravel the case and to try
0:34and figure out exactly what happened and
0:37who all was involved but the proof that
0:39it happened can be found in the ruined
0:41lives of thousands of victims the one
0:44person who knows the most and is willing
0:45to talk is Harry maropis the man who
0:49figured out made off scheme before
0:50anyone else he sat down with us for his
0:53only television
0:54interview until a few months ago Harry
0:57marcoos was an obscure Financial land
1:00and mildly eccentric fraud investigator
1:02from Boston who most people would never
1:04notice on the street my modern Greek
1:07hero how you doing but today he enjoys
1:09an almost heroic status pursued by
1:12journalists and movie producers and
1:14honored by colleagues as the man who
1:16went to the Securities and Exchange
1:18Commission and blew the whistle on
1:20Bernie maid off in his $50 billion
1:25fraud thank you thank you please take
1:27your seats but he seems uncomfortable
1:30with all the attention and knows that he
1:32is no hero I stand before you a $50
1:36billion
1:37[Music]
1:38failure how many times did you send
1:40material to the SEC May 2000 October
1:452001 October November and December
1:492005 then again June 2007 and finally
1:54April 2008 so five separate SEC
1:59submissions and in spite of all of the
2:01things that you did it still ended up in
2:05disaster there's nothing to be proud
2:07about in this case I feel horrible about
2:09the result it's been a total disaster
2:11for the
2:13victims it began a decade ago when Mar
2:16caplus was working for a Boston
2:17investment firm his boss told him that
2:20Bernard mof a former chairman of the
2:22NASDAQ Stock Exchange was running a huge
2:25unregistered hedge fund that was
2:27producing incredible returns he wanted
2:30Harry to reverse engineer its trading
2:32strategy and revenue streams so that the
2:35firm could duplicate ma off's results he
2:38had the patina of being a respected
2:40citizen one of the most successful
2:42businessmen in New York and certainly
2:43one of the most powerful men on Wall
2:44Street you would never suspect him of
2:47fraud unless you knew the math so I mean
2:49you're like a math guy right I've taken
2:52all the calculus courses from inal
2:54calculus through differential calculus
2:56as well as linear algebra and statistics
2:58both normal and non-normal how how long
3:00did it take you to figure out that there
3:01was something wrong it took me 5 minutes
3:04to know that it was a fraud it took me
3:07another almost 4 hours of mathematical
3:10modeling to prove that it was a fraud
3:13what were the things that caught your
3:15attention it was the performance line as
3:18we know that markets go up and down and
3:21his only went up he had very few down
3:23months only 4% of the months were down
3:25months and that would be equivalent to a
3:27baseball player in the major leagues
3:29batting 960 for a year clearly
3:31impossible you would suspect cheating
3:33immediately maybe it was just good no
3:36one's that good Harry said there were
3:38only two plausible explanations either
3:41Midol was using Insider information to
3:43rack up huge profits or he was running a
3:46giant Ponzi scheme so either way he was
3:49doing something illegal either way I
3:51knew he was going to go to prison in May
3:53of 200000 Marco polus took his
3:55suspicions about Bernie maid off to the
3:57Boston office of the Securities and
3:59Exchange commissioner did you have any
4:01Financial motive yes he was a competitor
4:04of mine in 2000 to 2004 while I was
4:07still in the industry and when someone's
4:09competing on your playing field who's a
4:11dirty player you want him tossed off the
4:14field he also thought he might be
4:16eligible for a sizable reward if the
4:18fraud involved insider trading but that
4:21turned out not to be the case in your
4:23first letter to the SEC back in 2000
4:27you're a little tentative you say look I
4:30have no smoking gun in 2000 it was more
4:33theoretical in 2001 it was a little bit
4:36more real by 2005 I had 29 red flags
4:40that you just couldn't miss on but by
4:432005 the degree of certainty was
4:45approaching 100% over time and with some
4:48simple math calculations Mar capus
4:51concluded that for made off to execute
4:53the trading strategy he said he was
4:55using he would have had to buy more
4:57options on the Chicago options exchange
5:00than actually existed yet he says no one
5:03he spoke to there remembered making a
5:05single trade with Bernie made off spot I
5:08would talk to the people I had trading
5:10relationships with and ask did you have
5:12a trading relationship with Mr Bernard
5:14matov and they all said no we don't
5:16think he's for
5:17real could you find anybody I found no
5:20one that ever traded with Mr matov and I
5:22traded with the largest Equity
5:23derivatives firms in the world and
5:25that's because made off's investment
5:27fund never actually made any trades at
5:29Le going back to 1993 and probably
5:32further a fact confirmed last week at a
5:35meeting of madeof investors by the
5:37truste charged with liquidating his
5:39assets no one knew the depth of the
5:42fraud but a lot of people had questions
5:45who else figured this out besides you I
5:48would say that hundreds of people
5:50suspected something was a Miss with the
5:52moff operation if you look at who the
5:54victims were not you'll notice that the
5:57major firms on Wall Street had no money
6:00with Mr Manoff I mean you write in the
6:03this is the letter I'm quoting from the
6:04letter to the Securities and Exchange
6:06Commission red flag number 20 made off
6:08is suspected of being a fraud by some of
6:10the world's largest most sophisticated
6:12Financial Services firms and then you
6:14list some of the firms yes I do the
6:16biggest firms on Wall Street and
6:18conversations with people high up in
6:20those firms that is correct and the SEC
6:23ignored
6:24that did they call any of these people
6:27all the SEC had to do was pick up the
6:28phone they never did if you had
6:30Executives at at the biggest investment
6:33houses in Wall Street that knew
6:34something was wrong why do you think
6:36they didn't go to the
6:37SEC because people in Glass Houses don't
6:40throw stones and self-regulation on Wall
6:42Street doesn't work in January 2006 the
6:46New York office of the Securities and
6:47Exchange Commission finally opened a
6:50case File to look into Harry's
6:51allegations about Bernie maol despite
6:54uncovering evidence that Midol had
6:56misled them about his investment
6:58activities the the SEC closed the case
7:0111 months later without ever opening a
7:03formal investigation the staff said
7:06there was no evidence of fraud what I
7:08found out from my dealings with the SEC
7:10over eight and a half years is that
7:12their people are totally untrained in
7:13finance they're unschooled most of them
7:16are just merely lawyers without any
7:18financial industry experience well if
7:20the people there aren't trained in
7:21Securities work what are they trained in
7:24how to look at pieces of paper that the
7:26Securities laws require they can check
7:28every piece of paper perfectly and find
7:30misdemeanors and they'll miss all the
7:32financial felonies that are occurring
7:34because they never look there even when
7:35pointed to fraud they're incapable of
7:37finding fraud no one at the SEC would
7:40talk to us on the record about Harry
7:42marap polis's allegations but one person
7:45who seem to have had a high opinion of
7:47the agency was Bernie maol I'm very
7:49close with The Regulators so I'm not
7:51trying to say that they can't you know
7:53that what they do is bad as a matter of
7:54fact my niece just married one besides
7:56his niece's husband who no longer works
7:58at the SEC maid off has had
8:00long-standing ties to the agency and has
8:03been called upon to give advice at this
8:052007 meeting of a nonprofit group called
8:08The Phil octat Center mid off seemed to
8:11think the SEC was doing a great job you
8:13know in today's regulatory environment
8:15it's virtually impossible to to violate
8:19rules and this is something that the
8:21public really doesn't understand but you
8:24it's impossible for you to go UND for a
8:27violation to go undetected certainly not
8:29for a considerable period of time but
8:32don't try and tell that to the Phil
8:33oades center today its main benefactor
8:37the Betty and Norman Levy Foundation was
8:39fully invested in madeof one of dozens
8:42of charitable organizations that have
8:44been devastated or wiped out made off's
8:47customer list single spaced with small
8:49type is 162 pages long with victims
8:53running the gamut from Hollywood royalty
8:56to a Carpenters pension fund in Syracuse
8:58New York bu bu Shelley lllo has been
9:02forced to put her mother in a Medicaid
9:04assisted living facility while she
9:06packed up their apartment to move in
9:08with a friend all because of Bernie maid
9:10off her whole lives were turned upside
9:13down by this man that sits in his
9:16Penthouse and
9:21smirks the same day last week 70 Mi away
9:25Len and Marge Forest were leaving their
9:27house that they had just sold in sat
9:28talk at long Island and were preparing
9:30to drive to South Florida to sell their
9:33home there they had their money with
9:35Bernie made off for 30 years and lost an
9:38eight figure family fortune two days
9:40before his 80th birthday do you have any
9:43money to live on enough I would say for
9:4760 days do you know other people who are
9:49in the same situation oh yes we have lot
9:53unfortunately and I think probably the
9:55thing that tears me up more than
9:57anything is the fact that I
10:00recommended made off to a number of
10:03people and uh and they lost their money
10:06and I I'll never stopped feeling
10:08responsible for that they were all close
10:11family and
10:12friends Len forest and his friends
10:15thought they were part of a small
10:16exclusive group of investors lucky
10:18enough to have a connection with Bernie
10:20maid off and because they thought they
10:22were making 12% a year they weren't
10:25inclined to ask a lot of questions Harry
10:27marcoos called it the class classic
10:29Affinity scam an affinity scam is where
10:31you pray on groups that are similar in
10:33nature to yourself so I'm Greek if I was
10:36going to run an affinity scam I would
10:37run it on the Greek American Community
10:39here Bernie was Jewish so he ran it on
10:42the Jewish community in the United
10:43States but that didn't that wouldn't get
10:45him enough customers cuz he always
10:47needed new money to keep the scheme
10:48going over time mid off extended his
10:51reach from New York to Palm Beach where
10:53he enlisted hundreds of wealthy clients
10:55many of them recruited from his own
10:57country clubs and he also made
11:00connections that gave him on trade to
11:01Europe and the hedge fund capital of
11:04America Greenwich Connecticut it was
11:06here that Bernie made off made some of
11:08his biggest deals with large investment
11:10firms that were willing to feed him
11:12billions of dollars of their clients
11:14money to manage and in return Bernie
11:17maid off agreed to pay these so-called
11:19feeder funds a fortune in Annual fees
11:22the largest of the feeder funds was the
11:24Fairfield Greenwich group how much money
11:27did Fairfield make off burning made off
11:29every year hundreds of millions of
11:31dollars if you're a feeder fund what are
11:33you supposed to do for those hundreds of
11:36millions of dollars you're supposed to
11:37identify the world's best hedge fund
11:39managers and invest only in them and
11:41you're supposed to make sure they're not
11:42running Ponzi schemes the real steroids
11:45here were the feeder funds that's what
11:47made it an
11:49international Ponzi scheme attorney
11:52David boy is one of the most prominent
11:54lawyers in the country and is
11:56representing Fairfield Greenwich
11:57investors who lost near nearly $7
11:59billion when made off went under they're
12:02suing the firm for gross negligence
12:05claiming it failed to investigate made
12:07off thoroughly or monitor his activities
12:09as it promised to do in its marketing
12:11materials analysis of portfolio
12:14composition portfolio stress testing
12:16risk management asset verification do
12:19you think that really happened no we
12:21know it didn't happen because we know
12:23all they did was turn the money over to
12:25Bernie maid off and they did that for 20
12:27years they did nothing they essentially
12:29did nothing except lose their Investor's
12:31money and enjoy very luxurious
12:34Lifestyles from the money they took out
12:37Walter null one of the founding partners
12:39of Fairfield grenwich declined to talk
12:41to us and has reportedly been lying low
12:44with his wife at their Compound on the
12:46private island of Mystique but in a
12:48statement to 60 Minutes his firm said
12:51that it too was a victim of Bernie maof
12:53that it had placed too much trust in his
12:56then impeccable reputation and in the
12:58fact that there had been multiple
13:00reviews of maid off by the SEC Mr M off
13:04what do you have to say for yourself in
13:05the end Harry marus had been right about
13:08Bernie mid off he will be going to
13:10prison but not because of anything that
13:12Harry or the SEC did in a bad economy
13:16mid's lies simply collapsed under their
13:19own weight no one was investigating Mr
13:21madof at the end so he turned himself in
13:24before anybody in a position of
13:26authority began a serious investigation
13:28that's that's typically how the SEC does
13:33it they come in after the crime has been
13:35committed they toag the victims count
13:38the bodies and try to figure out who the
13:41crooks were after the fact which does
13:43none of us any
13:54good Wall Street in shreds the watchdogs
13:57Fast asleep bonus stuffed Executives
14:00laughing all the way out of the busted
14:02Banks it's been some year oh and we left
14:06out the Ponzi scheme of Ponzi schemes
14:09Bernard made off's untiy little business
14:12that built thousands of people out of
14:15billions of dollars while The Mastermind
14:17is doing 150 years in prison the big
14:20question is where did all the money go
14:23Irving Picard the courta appointed
14:25trustee the Liquidator is searching for
14:28the bill ions that disappeared and
14:30trying to recover as much as possible
14:33from made off's remaining assets it's a
14:35daunting and thankless task for while
14:38he's suing whoever he can on behalf of
14:41the victims he's also suing many of the
14:43victims those who he says benefited and
14:47should have known they were investing in
14:49a house of cards Mr Picard and his chief
14:52counsel David Shen have been largely
14:54silent about the details of the recovery
14:57until tonight
14:59last November just before the whole
15:01thing collapsed Bernard mof sent out
15:03statements to his clients how much were
15:07they told they were worth about $ 64.8
15:10billion so the statements were totalized
15:13yes
15:14absolutely the 64.8 billion that
15:18investors thought they had was just an
15:21illusion designed by made off to keep
15:24investors investing last December the
15:27roof fell in Mr mid what would you say
15:30to all those people that lost money Mr M
15:32Mr mid has no say in the matter if the
15:35victims want money back they'll have to
15:37go through Mr peard the decider and his
15:40blood hound Mr Shia how much real money
15:43do you think went into the whole scheme
15:46I'd say about 36 billion and about 18 of
15:49it went out before the collapse and 18
15:53of it's just missing and that $18
15:56billion is what we're trying to get back
15:58so for the last N9 months Picard and his
16:00team have been on a Global treasure hunt
16:03the first step liquidation made off
16:06boats his art even his seasoned tickets
16:09to the New York Mets plus Bernie's
16:12various homes all sold or about to be
16:15sold with the US Marshall as real estate
16:18pitch man your eyes are drawn directly
16:20to the chandelier which is probably
16:22worth a pretty penny they didn't exactly
16:25hide their wealth did they they did have
16:27the house in in Palm Beach they had a
16:30place in Monto they had apartment here
16:33in Park Avenue in the city all of which
16:35are the accouterments of great wealth
16:37but it wasn't an extraordinary lifestyle
16:40how much is all that total according to
16:43the government it's over $50 million
16:46just a drop in an oversized bucket
16:48nothing close to what investors lost so
16:51Picard and his team continue to follow
16:53the money they started here this was the
16:57seene of the crime made off New York
16:59offices an impressive landscape of
17:03emptiness his desk was here and close by
17:07perhaps a work of art that sums up the
17:09entire story it was called the soft
17:12screw and it was about four four I guess
17:16four to 6 feet high and it was sitting
17:19right here and sitting on top of the
17:21world was made off himself he was much
17:25like The Wizard of Oz just hiding behind
17:27this wall and no one could quite
17:29penetrate it but they sort of really
17:31liked the results as far as you've been
17:33able to find out was he ever legitimate
17:36no it was never legitimate and I think
17:37he told the truth which he's not capable
17:40of he would then say yes I started out
17:44as a crook and I ended up as a crook and
17:47a crook who looked after his family
17:49Picard's team Unearthed records showing
17:52made off sons Mark and Andrew who ran a
17:55legitimate trading operation and made
17:57off's brother Peter the chief compliance
18:00officer took $80 million in compensation
18:03over the past 7 years plus Millions more
18:07in personal expenses charged to the
18:09company private jet rentals ski
18:12vacations and Country Club dues even
18:15Ruth made off's wife had a company
18:17credit card and she charged Millions too
18:20on everything from shopping sprees in
18:22Paris to movie rentals all courtesy of
18:26bernardel madeof securities thank you
18:29very much they used the bank account at
18:32bis like a personal piggy bank of all
18:35the people that should have known his
18:37brother and his sons who worked under
18:39the same roof with him should have known
18:42one would think so did they know my
18:45belief is yes they knew and the reason I
18:48believe that is they were officers of
18:50these companies and directors in certain
18:52instances as well and also compliance
18:55officers and a very highly regulated
18:57environment so I think clearly
19:00they would have to have known what was
19:03going on given their own personal
19:06transactions the longevity of what was
19:08happening and their responsibilities as
19:10officers of the company M off sons and
19:12brother also had accounts with Bernie
19:15and their returns were simply
19:17spectacular there is a sort of an
19:19extraordinary event with Peter his
19:21brother after 1995 we only see him
19:24putting
19:25$14 in and he took out over 16 million
19:30we have to take a hard look at that
19:32Picard says Mark and Andrew M off
19:34withdrew over 35 million doll from
19:38accounts that were opened with little or
19:40no original investment if they turn out
19:43to be Untouchable criminally do you
19:46intend to bankrupt them civil whether or
19:49not they have a criminal um problem we
19:54will pursue them uh as far as we can
19:58pursue them
19:59and if that leads to bankrupting them
20:01then that's what will happen Picard and
20:04Shen told us they plan to file suit this
20:07week against made off's Sons Mark and
20:09Andrew his brother Peter and niece
20:12Shauna accusing them of negligence and
20:15breach of fiduciary duty in their roles
20:17at the company he'll be seeking the
20:20return of $198 million that was paid out
20:24loaned or transferred to them when his
20:27brother took out money or his sons took
20:29out money they took customer money can
20:32you lay claim to the son's real estate
20:35for example I believe that we can uh the
20:38money that went to buy these houses
20:40under the law is called fraudulent
20:41transfers maybe but the made off sons
20:44are claiming they're still owed nearly
20:46$90 million by their father's bankrupt
20:50company Mr mid off Mark maid off and the
20:52other family members maintained their
20:54innocence and declined our request for
20:57an interview I have no com I'm sorry I
20:59can't help but in a statement the made
21:02off sons say p car's allegations are
21:05baseless that they had no prior
21:07knowledge of Bernard mof's crimes if you
21:10were those sons and you knew what you
21:13knew today about where all that money
21:15came from wouldn't you be embarrassed to
21:18keep that money they should give it all
21:20back and if they don't give it all back
21:23I think we have an obligation to go get
21:25it and take it all back and that
21:27includes mother made off Ruth though
21:29she's already agreed to Forfeit about 80
21:32million in assets Picard has sued to
21:35keep her on a very short leash at the
21:38moment any time she spends over $100 she
21:41has to check in with you correct she
21:43reports it to us at the end of a month
21:45and how is she living now very modestly
21:48the most significant amount of money
21:50that Ruth is currently spending is on
21:52lawyers there is an assumption in this
21:54case that there is this stash out there
21:57whether in Swiss Banks or under the
21:59mattress are you assuming there is yes
22:03we are yes what kind of money are we
22:05talking about we assum it millions and
22:07millions of dollars millions and
22:09millions isn't nearly enough to cover
22:11the billions stolen by Bernie ma but
22:14here's where the story takes an odd
22:16twist most of the money for victims will
22:19not come from the made off family but
22:22from some of the victims themselves most
22:25people assume because everyone lost
22:27money mhm who dealt with made off right
22:31not true we've found that there have
22:33been quite a few people who have gotten
22:35out more than they put in in fact about
22:39half of ma off's thousands of victims
22:42are what Picard calls net winners people
22:45who took out more money than they ever
22:47invested with made off we can tell that
22:50if Morley put in100 hours and he got out
22:53200 he got $100 of somebody else's money
22:56so the guy who's been happily taking
22:5825,000 a year out over say 10 years he's
23:02not going to get a dime out of this no
23:05not if he took out more than he put in
23:08well say if he say he put in an initial
23:10100,000 then he's already got more than
23:12he put in he's been overpaid and are you
23:15going to try and get the difference
23:18perhaps and he's entitled by law to get
23:21that difference back it goes by the
23:23nicely nasty name of a clawback if any
23:27investor took out more more than theyve
23:29put in over the past six years Picard
23:31can legally demand it back to help
23:33victims who didn't take money out for
23:37now Picard says made off smalltime
23:39winners are not his priority he's
23:42focusing on the big Winners who claimed
23:44to be innocent victims that some of the
23:48big players I believe actually knew
23:50exactly what was going on and
23:52participated in it piard and Shen have
23:54sued several prominent madeof investors
23:57saying they knew knew or should have
23:59known of the fraud like billionaire
24:01investor and philanthropist Jeffrey
24:04pauer he got a statement that said his
24:06return was
24:08950 now this isn't some unsophisticated
24:11rubbe buying these stocks and dealing in
24:13this this is a very very sophisticated
24:15guy he gets a statement like that that's
24:18off the charts he doesn't do anything
24:20about that so is he a prime suspect sure
24:23I I think not only in terms of the
24:25monies that he took out but the records
24:28with regard to their relationship the
24:29manipulation and backdating of Trades
24:32you had to know or someone knew is false
24:35the suit claims picau took out more
24:37than5 billion in profits since
24:401995 Picard is also suing another
24:43billionaire investor Stanley Chase who
24:46withdrew over a billion dollars in
24:48profits both Chase and pickow maintain
24:51their innocence and would not comment
24:54but in court papers Pau characterizes
24:56the suit as un supported by facts or
24:59logic Sheen says he thinks they knew all
25:03along and simply couldn't resist the
25:05easy money I think as everyone you know
25:08was participating in this and just
25:10feeding at this trough of greet at the
25:13end of it what they were looking for was
25:15it to continue they were hoping it was
25:17never going to end so far the trustee
25:20and his Council have filed 13 lawsuits
25:23seeking the return of nearly $15 billion
25:26from the biggest madeof investor
25:29in addition 233 clawback notices have
25:33gone out to made off friends and family
25:35who may have profited from the scheme
25:38this is a human tragedy thousands of
25:41smaller investors who were living off
25:43what they believe were legitimate
25:44profits now fear that on top of their
25:47lost Nest Egg they may end up owing even
25:50more I open my mailbox wondering if this
25:53will be the day when the letter arrives
25:56she is sympathetic but at the end of the
25:59day they're in a Ponzi scheme
26:01unfortunately for them so all they get
26:04at best is what they put in and the
26:06claim that they should be getting
26:08something other than that is to suggest
26:11that some other resource should exist
26:13I'm about the taxpayers coming in in
26:16funding this so far peard has found
26:19nearly $1.5 billion for the victims fund
26:23and he's hoping to get several billion
26:25dollars more but even then victims will
26:28collect only a tiny fraction of what
26:31they lost we don't know how much is
26:32there but it's going to be not
26:34necessarily Pennies on the dollar but
26:36it's it's only you know a little bit
26:37more than that uh we're not going to be
26:40able to repay
26:42everyone not not anything close to what
26:45they
26:53lost made off it is a name that will
26:56live in infamy it's been nearly three
26:59years since Bernard made off confessed
27:01to running a $65 billion Ponzi scheme
27:05the largest financial fraud in history
27:08thousands of trusting clients who felt
27:10safe investing with a financial genius
27:12were swindled he hadn't invested a penny
27:16while Midol is serving 150 years in
27:19prison his family has had to deal with a
27:22consequences of his crimes his wife Ruth
27:25divested of most of her great wealth and
27:27D ided by a suspicious World their son
27:30Mark dead driven to suicide by shame and
27:34accusations of guilt their other son
27:37Andrew isolated trying to live with the
27:40disgrace are they innocent or were they
27:43willing partners for the first time
27:46since Bernie made off's arrest his son
27:48Andrew and wife Ruth speak out about
27:51crime punishment and the shame of being
27:54a
27:55madeof it's a tough name to live with it
27:58sure
27:59is Ruth made off you feel the shame of
28:03course I feel the shame I barely walk
28:05down the street without worrying about
28:09people recognizing me and Andrew made
28:12off from the very beginning of this
28:15whole episode uh I've had absolutely
28:18nothing to hide and I've been eager I
28:21would say almost desperate to speak out
28:24publicly and tell people that I'm
28:27absolutely not involved
28:29Andrew and Ruth made off speak out in
28:31the book truth and consequences a more
28:34or less tell all aranged by Andrew's
28:37fiance Katherine Hooper an attempt to
28:40separate the family from the father's
28:43crimes is it dismaying for you that no
28:45matter what you say people aren't going
28:47to believe you I think in many ways it
28:50is dismaying but public opinion has to
28:53be something that doesn't matter to us
28:55what matters to us is the truth it's
28:58really hard for people to believe that
29:01you didn't know that you must have known
29:04I I can't explain it I mean I trusted
29:08him why would it ever occur to me that
29:12it wasn't legal the business was his
29:15reputation was almost legendary why
29:19would I ever
29:20think that there was something sinister
29:24going
29:25on it was 1954 when Ruth Alper met
29:29Bernie maof in Queens New York I just
29:33saw him and I was sort of swept away I
29:38think she married him at age 18 they had
29:41two sons Mark then Andrew Bernie was
29:45building up his money management
29:47business a typical middle class family
29:50living on Long Island we were both solid
29:54parents and valued our family and so so
29:58proud of our boys it was a dream really
30:01my father was certainly uh present as a
30:03dad did he emphasize moral values at all
30:07I wouldn't say that we sort of
30:09explicitly uh discussed values but we
30:13certainly uh lived what I felt was
30:18uh a moral life where there was a clear
30:21sense of right and wrong exactly when
30:24birdie made off went wrong is unclear
30:27but as his rep reputation for delivering
30:29steady profits grew the moffs began
30:32living the good life a penthouse in
30:35Manhattan homes in Palm Beach in the
30:38south of France and yachts in both
30:40places the family became celebrated for
30:44philanthropy and made off became a Wall
30:46Street Big Shot he was a big figure in
30:50the industry he was the chairman of nasd
30:52he was constantly being honored as Man
30:55Of The Year of this organization and
30:57that and
30:58that had an an effect on me both sons
31:01went to work as Traders for their
31:03father's firm in the late 80s a Time
31:05authorities believe made off's Ponzi
31:08scheme was well
31:09underway why would your father want to
31:13taint his sons by bringing into a
31:16situation that could well spell
31:20disaster yeah that's uh that's a great
31:23question and that's something that uh
31:25that I really agonize over as a son
31:28um you know what my father did was uh so
31:33horrible and um it's hard for me to hard
31:37for me to understand that and I'm not
31:38any closer to understanding it now than
31:40I was three years
31:41ago bernardel made off Securities
31:44employed over a hundred people but it
31:46seemed like a family business his
31:49brother Peter and several cousins worked
31:51there mark and Andrew worked on the 19th
31:54floor of New York's lipstick building
31:57where they legitimately traded
31:59Securities for the firm and for outside
32:02clients the investment advisory business
32:05the pzi scheme was housed two floors
32:08below where their father never made any
32:11trades at all he was simply creating
32:13phony paper statements that showed
32:16steady profits for his clients his
32:19victims access to the 17th floor was
32:22highly restricted you must have been
32:25curious about why the 17th floor was
32:28such a secret place when you or Mark
32:32asked him about his end of the business
32:35what did he say it was always a very
32:38similar response is you guys have your
32:42business to worry about and let me worry
32:43about my business and the conversation
32:45would end there but people say look
32:48there's no way these kids could not have
32:52the very least suspected something was
32:55going on well keep in mind these were
32:57completely separate businesses we were
33:00executing hundreds of thousands of
33:01transactions a day uh and that kept all
33:04of us incredibly busy and uh it just
33:07didn't occur to me that he could be
33:09involved in any kind of criminal
33:12activity Andrew says his father would
33:15often walk his clients through the 19th
33:17floor to show actual trades being made
33:21you feel that the legitimacy of the
33:24trading business offered protection to
33:27what your father was doing absolutely
33:30absolutely that he was using you and
33:32your brother absolutely uh it was one of
33:35the hardest things to come to grips with
33:37in trying to get my head around this was
33:40that feeling that I had been used uh
33:43almost as a as a human shield by him uh
33:47he it's it's unforgivable no no father
33:49should do that to their sons the basic
33:52concept of Wall Street he says he
33:55thought his father was a financial
33:57genius there were suspicions about mof's
34:00remarkably consistent returns but the
34:02SEC repeatedly cleared him of any
34:06wrongdoing what troubled Andrew was his
34:08father's refusal to discuss any plans
34:11for a succession his plan was that he
34:14had no plan and he would say that when
34:18he dies his end of the business dies and
34:21again it was always the the same
34:22response that's the way it is and it's
34:25not going to change he ruled with an
34:27Iron Fist but kept everyone happy with
34:30money steady returns for investors and
34:33for family an endless stream of cash
34:37Andrew and Mark were paid multi-million
34:39dollar salaries and the boys went to
34:41their father for even more for houses
34:45business ventures and divorce
34:47settlements Katherine Hooper says the
34:50made off benign dictatorship took some
34:53getting used to it was an adjustment
34:55getting to understand that the
34:57boundaries and family were probably
34:58going to be different than what I was
35:00used to did you feel that Papa mid off
35:04was the boss there's no question that he
35:07was he could be a bully without question
35:10I did you ever suspect along the way
35:13either strange Behavior or somebody who
35:16was bottling up a secret or any of I
35:19never did I never did it didn't seem
35:21that way there was nothing that would
35:24make me suspect
35:25anything sometimes I look back and I
35:29think as the years went on he started to
35:32get more and more short tempered and
35:35maybe he just was having trouble
35:38obviously he had to
35:40been in the fall of 2008 the world
35:43economy began to implode and markets
35:46were in freefall big investors wanted
35:49out Redemption after Redemption strained
35:52made off scheme to its limits on
35:55December 10th 2008 with only a few
35:58hundred million left of the billions
36:00invested with him Midol realized the
36:03game was over he told his wife to
36:06transfer $10 million from her brokerage
36:09account of the firm into a personal
36:11checking account did you not wonder what
36:14on Earth is happening here $10 million
36:16is a lot of money it wasn't atypical for
36:19him to put money in an account and take
36:22it out I didn't think anything of it
36:25actually that same morning Bernard mof
36:28called a family meeting in his office
36:32and he started to uh try and speak to us
36:37and he couldn't he uh sort of fell apart
36:42started to cry a little bit um and it
36:45was shocking to see that I mean this was
36:49not a man who uh was emotional in that
36:51way at all he said that maybe it would
36:54be easier if we talked uh elsewhere and
36:57uh he suggested maybe we should go up to
36:59his apartment he called from the office
37:01and said I'm coming home with the boys I
37:04have something to talk about came in we
37:07went into a room four of
37:09us and he
37:12said I have a confession to
37:15make I've been running a Ponzi
37:18scheme he said $50 billion he
37:24said everything I've been doing is all a
37:27big lie he said uh he said the business
37:31is a is a Ponzi
37:33scheme and uh it firm is completely
37:36insolvent and I'm broke and then he just
37:39started
37:40sobbing and I was
37:43uh I was shocked I it was it was I felt
37:47like my head exploded I mean I I don't
37:49think if he had told me he was an alien
37:51I could have been more surprised uh he
37:53said that uh firm had liabilities of $50
37:57billion
37:58it never occurred to me that his
38:00business had anything like that kind
38:02of anything like that under management
38:04it was it was shocking your mother what
38:07was her
38:08reaction she looked uh she looked
38:12shocked um she uh asked what's a Ponzi
38:17scheme it was her first question she
38:19didn't even understand that I think it
38:20was me who answered and said that uh it
38:23means that it's all fake that dad's you
38:26know is
38:28he's not been doing what he says he's
38:29been doing and uh he followed that up
38:33and said yes I've been lying to all of
38:34you uh all of these years I've been
38:36lying to everybody I've been lying to
38:38myself he said your brother my brother
38:40was uh trembling with rage he was uh
38:45absolutely Furious Mark was the first
38:48one to stand up and said you know I'm
38:50out of here and he stormed out of the
38:52room and I uh I immediately followed him
38:56and walked out you know there's a lot of
38:58people out there who are saying or will
39:01be saying as they watch this this is all
39:04a charade that this was something that
39:05the made offs set up to get himself off
39:09the hook this I wish it were I wish it
39:12were I wish none of this was real you
39:14know I knew absolutely nothing about
39:17this uh before my father shared the
39:19information with me and it was the most
39:22shocking and terrible moment of my
39:24life I was as stunned as that day I was
39:28kind of paralyzed Bernie got up and said
39:31I'm going back to the office was he
39:34emotional in any way I don't remember
39:36that either he must have been apologetic
39:39in any
39:41way probably yes
39:44I it's sort of a blank now I'm not
39:48hedging here I don't I just simply don't
39:50remember every detail I was in such a
39:53state later that day that evening you
39:57both turned up at the office Christmas
39:59party I know he phoned me from the
40:01office and said we have to go to the
40:03office Christmas party so I got myself
40:06together and went over there we stayed a
40:10half an hour and we just went home the
40:14next morning the FBI was there to arrest
40:16him at about 700
40:18a.m. Andrew and Mark maid off had turned
40:21their father in shortly after the arrest
40:24Ruth maof called Andrew pleading with
40:27him to co-sign his father's $10 million
40:30bail bond and I said you know forget it
40:33there's no way I mean how could you even
40:36ask that question no I'm not signing
40:39that bail bond that's crazy and I was
40:41really uh I was very upset that she
40:44asked because uh here I had just turned
40:47my father into to the authorities uh a
40:49day before and now uh it appeared that I
40:53was losing my mother as well because she
40:55was siding with him I just wanted him to
40:59come home I was so afraid afraid of I
41:03mean the whole idea going to prison was
41:06sort of Unthinkable to me I don't think
41:10I ever knew anybody that went to
41:13prison Mr made off what do you have to
41:15say for yourself bill was eventually
41:17guaranteed by Ruth and made off's
41:19brother Peter and Bernie was released
41:23all of his assets were frozen but in a
41:26stunning breach of the court order
41:28barring the transfer of property a large
41:30and extremely valuable envelope arrived
41:33at Andrew M off's apartment I tore open
41:36the envelope and and and dumped it out
41:39and uh it was absolutely heartbreaking
41:43um these were pieces of jewelry that I
41:46recognized um things that I had seen my
41:48mother wearing over the over the years
41:51and uh I couldn't understand how she
41:54could do this I mean what were they
41:56thinking and uh it wasn't until um three
42:00years later that uh I had a chance to
42:04ask her what were you thinking when you
42:07sent me that jewelry I don't understand
42:09and uh she told me that um she and my
42:12father uh planned to kill themselves and
42:16they put together that
42:17package beforehand and sent it
42:20out did they try to kill
42:23themselves uh yes they
42:25did I don't know who whose idea it was
42:30but we decided to kill ourselves because
42:33it was it was so horrendous what was
42:37happening we had terrible phone calls
42:39hate
42:41mail just beyond anything and I said I
42:46can't I just can't go on
42:49anymore that's when I packed up some
42:51things to send to my sons and my
42:54grandchildren I had some lovely antique
42:57things and things that I thought they
43:00might
43:00want I mailed them it was Christmas Eve
43:04that added to the whole
43:06depression we took pills and woke up the
43:09next day what did you take I think
43:13ambian how many I don't even
43:17remember I had I I took what we had he
43:21took more did you leave notes
43:26no it was very impulsive and I'm glad we
43:29woke up but you must have
43:33talked this is a rather large decision
43:36to make it wasn't hard at the time it
43:38was impulsive and I just wanted
43:42out when we come back life in the made
43:45off apartment and the death of a
43:55son the she scale of Bernard mof's Ponzi
43:59scheme shocked the world thousands of
44:01individuals Charities and funds that on
44:05paper were worth a total of $65 billion
44:08were wiped out what's more some of his
44:11closest friends and family who had
44:14trusted him with their life savings
44:16faced
44:17ruin 30 seconds day with made off under
44:21house arrest the world staked out his
44:23penthouse on 64th Street obsessed by
44:27what might be happening behind the drawn
44:30Shades there were lawyers coming from
44:32meetings at the
44:35apartment we watched a lot of television
44:38and I cooked was there remorse was there
44:43yes there wasil or was it sort of
44:45self-pity I think in a way he was
44:48relieved at the beginning that he was
44:50finished but you must have asked
44:53yourself a thousand times why
44:57you you could have been a perfectly
44:59comfortable even wealthy family without
45:02question without this I don't understand
45:05it I
45:08don't it's hard for me to say this but I
45:11don't think the money was the part of it
45:14I think he got stuck that's what he said
45:18and he didn't have the courage to face
45:21face things when they might have been
45:23able to be faced on a much smaller scale
45:27VI mid repeatedly told authorities that
45:30he had acted alone did your wife have
45:32anything to do with this
45:33sir that his family knew nothing but who
45:37would believe Bernie made off I remember
45:40at some point we were having breakfast
45:42and I said to Andrew you know people
45:44will think that you were
45:45involved and I think it had dawned on
45:49him but it really hadn't sunk in and as
45:52I said those words he looked at me and
45:54said do you really think but that won't
45:55last I mean it'll become clear very
45:57quickly that we weren't involved did you
46:00have any suspicion at all that your
46:02mother might have been involved
46:04complicit in some no absolutely not I
46:06never for a moment felt that my mother
46:08was involved in my father's crimes or
46:10was aware of it at all the rest of the
46:13world was skeptical while countless
46:15stories predicted the imminent arrest of
46:17Mark Andrew and their uncle Peter do you
46:20have anything to say to the investors
46:22Ruth maid off seemed to get the worst of
46:24it it was said she had office at the
46:27firm that she had been the bookkeeper I
46:31was the bookkeeper I was the
46:34receptionist I worked for Bernie in 1961
46:38when I graduated from
46:41college and I left in
46:441963 when Mark was born and then Andy
46:48and I was a stay-at-home mom all those
46:51years and later on when the boys started
46:54to work there we lived within walking
46:58distance and I had an office there where
47:00I took care of decorating things and
47:03house things and boat bills and managing
47:06those things but I was never the
47:08bookkeeper after
47:101963 probably a majority of people can't
47:14believe that you can live with someone
47:16for 50 years and
47:19not know it's hard for me to believe too
47:23had you known would you have turned him
47:25in
47:27I'm glad I didn't it would have been
47:29tough but I I would have left whether I
47:33turn him in or not I don't know i' like
47:36to think I would have but I I I couldn't
47:42say I'm being completely honest with you
47:45I have to
47:46say she was vilified and shunned
47:49harassed on the subway the press hounded
47:52her with headline after headline her
47:55fiercest critics were her own sons from
47:59the time of your father's confession I
48:01gather you had a certain degree of
48:03estrangement from your
48:05mother how come well she and I uh barely
48:09spoke for uh two years
48:14um I struggled tremendously trying to
48:19understand her decision to stay by my
48:21father's side uh I felt so angry with
48:27him so I didn't understand her choice
48:31and I struggled with it as did Mor I
48:33never thought of leaving I don't know
48:36why I didn't I just knew this man for so
48:40long whom I loved for so many
48:42years I didn't know what else to do but
48:45stay there 3 months after his confession
48:49mid off pled guilty he was later
48:52sentenced to 150 years Ruth made off
48:56agreed to forfeit $80 million in all her
48:59worldly Goods all the homes boats cars
49:04Furniture even made off slippers were
49:07auctioned or sold you were allowed to
49:09keep 2 and2 million to a lot of people
49:12that's a lot of money it is certainly
49:15enough for me I've used a lot for legal
49:18fees there is a public perception and
49:21I'm sure you've heard
49:23it that there's got to be a stash
49:26somewhere you know I've heard it I've
49:28heard it that Bernie made off HIIT it
49:31somewhere and that you know about find
49:35it you both know about it my
49:38understanding of a Ponzi scheme is that
49:41when it's over there's nothing left and
49:44I certainly don't know stash anywhere
49:47though eight employees have been accused
49:49of helping with the scheme no family
49:52members have been charged but the
49:54bankruptcy trustee Irving peard and his
49:57lead counsel David shien are demanding
50:00that all the ma offs cough up virtually
50:02every penny they have claiming they
50:05quote knew or should have known about
50:08Bernie's crimes would you agree with Mr
50:11Shen the lawyer for the trustee when
50:15Sheen says you should be ashamed that
50:18you should give every penny back well
50:20obviously I disagree with uh many of the
50:23assertions in the lawsuit that the
50:25trustee has filed against me and I'm
50:27hopeful that in time we'll be able to
50:30reach a settlement and I'll be able to
50:32put this behind me Picard says the Suns
50:35trading operation received Millions from
50:38Bernie's Ponzi scheme he's suing Andrew
50:41made off a loan for $60 million
50:44virtually every penny he earned borrowed
50:47or was given to him by his father over a
50:5010-year period let me ask a really
50:52intrusive question how much are you
50:55worth as we speak
50:57well I was fortunate over the years uh
51:01running the business that Mor and I ran
51:04uh that generated many millions of
51:06dollars in profits and enabled uh my
51:09brother and I both uh to live a
51:12comfortable lifestyle you haven't
51:14answered the
51:15question I made in in good years uh
51:18several million dollars you know my my
51:21life at this point is an open is an open
51:22book uh the details of my financial past
51:26have been laid bare completely in the
51:28lawsuit against me I haven't enjoyed it
51:31but uh that's the reality that I live in
51:33do you fear ending up broke uh I think
51:36that it's a very real possibility but I
51:38am prepared to start over again and
51:41build myself back up have you talked to
51:44your dad I have no comment I'm sorry I
51:46can't help but for Andrew's brother Mark
51:49the weight of the lawsuits attacked from
51:51the media and the shame became
51:54unbearable he was absolutely obsessed
51:57with the news coverage he would wake up
51:59every morning immediately comeb through
52:02the regular newspapers and uh that would
52:06be followed up by reading blog posts and
52:09comments and I would say look you got to
52:11shut off your computer you got to stop
52:13subjecting yourself to this because uh
52:15this is not helpful for you and it's not
52:17helpful for me and uh if you keep doing
52:20this it's just going to lead to
52:23misery and it did on December 11th
52:272010 the second anniversary of his
52:29father's arrest Mark Midol hung himself
52:33while his two-year-old son slept in the
52:35Next
52:36Room he said in his last email no one
52:40wants to hear the truth as soon as we
52:43saw the caller ID at that early hour on
52:47a Saturday
52:48morning we both knew what had happened
52:51how did you react when you when you
52:54heard that
52:58it was
52:59awful uh I wish I could say I was
53:03shocked but I wasn't he had tried to
53:07kill himself uh a little more than a
53:09year
53:10before and uh that was was absolutely
53:15devastating and
53:18um I had tried to uh talk to him to
53:25understand what he was going through it
53:27was very painful for me and very
53:29difficult for me but I was making it
53:31through and to see him struggling uh and
53:36and not making it was uh was terrible we
53:39were we were very close he was my best
53:42friend and uh I I wanted to help
53:46him the night before he killed himself
53:49there was a awful article in the Wall
53:51Street Journal I mean I sort of I
53:53understood I was going through those
53:56agony of Shame
53:59and it was
54:01terrible to feel that way we're always
54:04so proud of who we were and Bernie's
54:07success in the
54:10industry it was
54:13uh so difficult she blames herself for
54:18Mark suicide he' wanted her to cut off
54:21all contact with her
54:23husband I just wish
54:27until my dying day that I had done what
54:29he wanted I don't know if it would have
54:31made a difference or not
54:34but if I could change things at least if
54:37I had tried I would have felt a little
54:41better I don't know if it would have
54:43mattered it's the most awful thing that
54:45can happen to
54:46anybody suicide of a
54:50child after her son's death Ruth maid
54:53off told her husband she was finished
54:55with him
54:56no visits no phone calls that decision
55:00led to a Reconciliation of sorts with
55:03Andrew that's partly why I'm sitting
55:06right here he and Catherine wanted to
55:08write this book I thought it would be
55:10good if I was a part of it and I agreed
55:14because I wanted to
55:17reconcile neither Ruth nor Andrew will
55:20benefit from sales of the book Catherine
55:23Hooper will you live just over there
55:26there you miss the apartment not really
55:29she lives a simpler life now in a three-
55:32room apartment in South Florida but she
55:35remains Ruth moff lawful wife of the
55:38greatest Financial criminal in history
55:42why haven't you filed for a divorce from
55:44this man I don't know it doesn't
55:48matter to me uh he's going to die in
55:51prison I certainly don't want to find
55:53another man these days he'll probably
55:56see this interview are you concerned
55:59about I was thinking about that no I'm
56:01not
56:02concerned he should hear
56:05it believe her or not the thousands of
56:08victims may have little sympathy for
56:10Andrew and Ruth but it can't be denied
56:13that they too are victims of Bernie maid
56:16off that's Mark and
56:19Andrew and happier times they lost a son
56:23and brother and will forever carry the
56:26sh name of the made off name what he did
56:29to me to my brother and to my family is
56:33unforgivable what he did to thousands of
56:36other people destroyed their lives um
56:40I'll never understand it and I'll never
56:41forgive him for it and uh I'll never
56:44speak to him again

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Free YouTube transcript tool

YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, translation to 100+ languages, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.