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It's late November 1998 at a private club in West Palm Beach, Florida, Bernie Madoff reclines in a chaise lounge next to the pool. He pushes up his sunglasses, takes a sip of champagne as a warm breeze blows through his hair. Nothing beat Florida this time of year. Madoff turns over and looks at his wife, Ruth, from the outside. They've got the perfect life. Lounging at a private club that costs 100000 dollars to join. The stock market is booming and Madoff now manages billions of dollars of investments.
Madoff shuts his eyes as the sun beats down on his back and lets himself drift away. Far from the hedge funds and commodity stocks and far from the deep hole he's dug himself into. He'll deal with all of that at some point. Right now, he won't let anything remind him of the troubles that wait for him back in New York City. But Madoff's peace of mind suddenly shattered when he hears a pair of approaching footsteps. He opens his eyes and in front of him, he sees a pair of alligator leather shoes, a bag of golf clubs, then drops on the ground.
This can be only one man. Well, Bob Jaffe, you're looking like a million dollars. I was hoping you'd say a billion, but we can start there. What can I do for you? Well, Bernie, I was hoping we could talk business. I've got some news about levees. Al Madoff sits up because now is no time to relax. For years, he's been losing billions of dollars in investments, but his clients don't know what they think.
Their portfolios are growing. And that's because Madoff keeps sending them dividend payments and paperwork showing that their investments are doing well. But the truth is, it's all a fraud.
The dividends and payments aren't from returns on investments. Instead, Madoff siphons that money from the accounts of his other clients. But soon enough, their money runs out.
And so he needs to steal more and more. That's why Madoff needs people like this man, Robert Jaffe, to feed him new investors, no matter who the investors may be. All right. Laughing Tell me what happened with his own. You know, when I was a kid, the rabbis would talk about in his book his survival story, the horrors of the Holocaust. Wiesel gave us hope and pride. So tell me good news. He wants to park his money with me.
Jaffe breaks eye contact and Madoff knows what that means. Jaffey is about to deliver bad news. Bob, what's going on with Elie Wiesel? Well, if he's ill, might be a proud Jew, but the guy who runs his charity, he's Catholic. He doesn't have the same kind of shared trust we can offer our good Jewish community here in West Palm Beach. OK, so what does that mean? Well, it means that he wants to come to your office and see the trains.
If he's comfortable with what he sees, then he'll sign over the Visa Foundation. And you told him my policy, of course. What exactly did you say? That no one sees your trades? That's right. That's not going to change for this guy. But, Bernie, that's how I keep an edge. And your edge is why people are always begging me. Please, Bob, give me an introduction to Madoff. The exclusivity. That's that's how I wrote them in the Bernie Bob.
I pay you a lot of money to get new clients. I'll go and get people's money if you could just let his people see a couple of trades. Just a few. I'm sure he'll be fine. Madoff's eyes get icy as he stares at Jaffey. Bob, here's what you're going to do. Go to Veysel personally and give him the pitch we give everyone. This is about trust. This is about being Jewish and supporting the Jewish people, make it about trust and finish the deal.
Are we clear? Jaffe breaks eye contact again and nods sheepishly, then he lifts his golf clubs and walks away, made off fall to sunglasses and puts them back on. But now he can't escape his troubles any longer. He's not only angry at Javi, but he's upset with himself and ashamed. Bizzell is a Jewish hero. Madoff wasn't lying about looking up to the man. Now Madoff is trying to steal from him just like every one of his clients.
But Madoff knows it's too late for guilt. It's too late to turn back, because right now Madoff needs the money. It's the only way he can keep himself from getting caught. American scandal is sponsored by the Kaisers Web, the next audiobook in the Cotton Malone series by New York Times best seller Steve Barry, read by longtime series narrator Scott Brick in the Kaisers Web. A secret dossier from a World War Two era Soviet spy comes to light. It contains information that, if proven true, would not only rewrite history, it could impact Germany's upcoming national elections and forever altered the political landscape of all of Europe.
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From wandering, I'm Lindsey Graham, and this is American Skin. In the early 1960s, Bernie Madoff gained prominence as an investor and financier. He brought technological innovations to Wall Street and over the course of decades, he built a powerful investment firm, one that promised large, consistent returns. As Madoff's fortune grew, he became world famous and went on to chair the Nasdaq. But when almost no one knew was that Madoff was running a massive Ponzi scheme with billions of dollars of investments that he managed, it was a secret he kept from even his closest family members.
But soon, a curious financial analyst would begin to look into Madoff's record, and he wanted to understand how exactly Madoff had been so successful. Soon, what the analysts found would raise alarms. This is episode two. The numbers always rise. It's 1999 inside an office in Boston's financial district. Harry Markopolos stands tapping his foot anxiously. He looks down at an old photocopier and mutters a curse. Markopolos has a big meeting in just a few minutes with his copier has decided to move at its own pace.
Finally, the machine spits out the last page. Markopolos grabs the stack of papers and tucks them under his arm. Then he stocks down the hallway and begins bracing for what's bound to be a tough conversation. Markopolos is a financial analyst who works for a mid-sized firm called Rampart Investments. So far at this job, he's always done well. But just days ago, his bosses gave him a tall order. They asked him to figure out how Bernie Madoff was so successful.
They wanted Markopolos to reverse engineer Madoff's investment strategies. And while Madoff is considered a genius, Markopolos eagerly said, yes, it'd be a good challenge. Now Markopoulos heads down the hall towards his desk. He glances at the boardroom where his bosses are waiting for him. He's dreaded this meeting because his bosses aren't going to be happy with the news he's about to report.
No matter how he tries. Markopolos can't duplicate Madoff's returns. He can't even get close, but he doesn't view this as a failure. Instead, Markopolos believes he stumbled onto something far more important, something that's left him deeply troubled. It's an idea his bosses won't want to hear. Markopolos reaches his desk to gather his other documents. And for a moment he pauses, looking at photos on the wall. One shows Markopolos in fatigues from his time in the Army Reserves.
Another is a photo of his large Greek family. He can feel himself filling with strength because at the center of both his family and the army are two important values, integrity and honesty. Right now, Markopolos knows that's what he needs to be honest, full of integrity, even in the face of disapproval. So Markopolos steadies himself. He picks up his papers and heads to the boardroom. Markopolos enters the room, which is lit with bright fluorescent light.
He greets his bosses, who include the co-founders of the firm. Markopolos drops a stack of papers on the table and he decides that right now he needs to use a military strategy. You should always begin an attack with a massive show of firepower. And so without sitting down, Markopolos turns to his boss, Dave Fraley, and fires away. All right, guys, there are one or two possibilities when it comes to Bernie Madoff. Number one, insider trading possible.
Madoff has the most sophisticated operation we've ever seen. Or number two, he's running a Ponzi scheme. Either way, the numbers don't check out. Markopolos looks around reading the room, his boss, Dave Fraley, only offers an amused smile. Well, Harry and a good morning to you. So why don't you have a seat, then explain what the hell you're talking about. Narcopolis pulls out a chair and sits down. Then he starts handing out his photocopies.
Here you go. Take a look. These are Madoff's numbers. And let me sum it up for you here. Impossible. He never loses money, no matter how volatile the market gets. No, Harry, you understand that this consistency is exactly why we put you on the project. We want to offer these kinds of returns to our clients. What you're telling us you can't do it? Oh, no, no, I can do it. I can replicate.
The numbers are, well, good. So why didn't you say you couldn't? Well, that's the thing. I can replicate Madoff's numbers, but only by committing fraud. Otherwise, it's impossible. There's no other way. Fraley chuckles as he exchanges glances with the others at the table. Fraud. Look, Bernie Madoff is one of the most powerful and respected men on Wall Street. He just got Lévy Zell's Foundation and then he gets Steven Spielberg and all the power players.
How can this be fraud? And if it's so obvious, why hasn't anyone else said it? Well, I think that's the thing. Exactly. It's because he's Bernie Madoff, because he's got the Levy sales, the Steven Spielberg's its reputation. So no one second guesses him. Markopolos grabs one of his photocopies and points to a comparison of investment returns. Look here, Madoff says his returns are market driven. But here's the line for the market. It goes up and down every day.
That's what markets do. But here at Madoff, he's on a constant, constant, 45 degree angle, always going up. It's just not possible. For a moment, Fraley and the others are quite Markopolos feels a trickle of hope. Maybe he got through to them. Maybe now they can see the madness, the total impossibility of Bernie Madoff's whole business. But Fraley looks toward the other end of the table, nods and then looks back at Markopolos.
OK, Harry, thanks for your take. I think that'll be all. That's it. We're not going to do anything about it. I promise you, the man's a thief. Harry, thank you for your time. Markopolos feels his shoulder slumping, he feels defeated, but then he rises, gathers his papers and walks out of the boardroom. As he stumbles back to his cubicle, Markopolos feels his face burning with resentment. It's not just that his bosses don't believe him.
They must now think he's incompetent. He's just not smart enough to figure out Madoff's strategy. Markopolos reaches his desk and collapses into his chair. Once again, he looks at the photos of his family and friends from the army. He feels something burning inside him, pushing him forward. Markopolos knows his bosses are wrong about him. He is smart and he's brave. And it doesn't matter if the whole world trusts Bernie Madoff. It doesn't matter if the whole world thinks Markopolos is crazy because he's seen something, something big.
And he knows that no matter what he does, he'll never be able to forget it. Which means only one thing. Markopolos has to keep going. He won't stop until he finishes what he started. He's going to show everyone that Bernie Madoff is a fraud. About two years later, Harry Markopolos steps into a hotel bar in Manhattan. It's an old dark bar with wood paneled walls and a long row of top shelf whiskey. The drinks don't run cheap.
But tonight, Markopolos needs something good and strong. It's been a hard couple of years for Markopolos after he met with his bosses that day. He decided to take matters into his own hands. And so in May of 2000, he brought his accusations about Bernie Madoff to the Securities and Exchange Commission, the federal agency that acts as referee for the financial markets. But despite his evidence, the SEC never called them back. Markopolos felt deflated, but he still wasn't ready to give up.
So earlier this year, he resubmitted his allegations. But once again, the SEC remained silent. This felt like a final blow. The SEC is supposed to be an independent watchdog for Wall Street, but for Markopolos, their silence made one thing clear. They are in the pockets of big investors, and that meant he'd have to find another way to expose Bernie Madoff. Bartender finishes filling his glass and Markopolos turns away from the bar, that's when he spots his colleague, Frank Casey, sitting in a booth cases talking on a cell phone.
And when the two knows each other, cases, eyes light up and he waves over Markopolos. Markopolos approaches in case he holds a hand over the receiver. He says he's on the phone with a man named Michael Ockrent. He's an investigative journalist who might want to do a story about Madoff and fraud. And now Okrent wants to talk with Markopolos. The question is, did Markopolos want to talk with Ockrent? On the record, Markopolos hesitates, filing a complaint with a government agency.
It's one thing, but going public with a reporter is something else entirely could get him fired. But for Harry Markopolos, the decision doesn't take long. He grabs the phone and begins telling the whole story to the journalist. How he raised a series of red flags with his bosses, how no matter what happens with the market, Bernie Madoff always seemed to make a profit.
Okrent listens patiently and then asks whether this could just be a sign that Madoff is the genius everyone says he is. Markopolos responds. The sure that could be the case, except he's run the numbers. Madoff's returned or mathematically impossible. And Markopolos says there's something else. Madoff says he's trading at a high volume.
But if you look at the markets, there should be some signs of all those trades. But there are never any indications of his activity.
It's as if he's trading in a different market or he's not trading at all. Okrent goes quiet and Markopoulos takes another sip of his whiskey. He can feel it yet another person is going to call him crazy and write him off. But he's surprised when Ockrent says, all right, he'll investigate the story. And if Markopoulos right, he'll write up an article and reveal Madoff as a fraud. The two say goodbye. Markopolos hands the phone back to Casey, his colleague.
Then he finishes his whiskey in one Big Gulp, shooting Casey, a worried look because he knows no matter what happens now, there's no going back. It's the spring of 2001, Frankie Paschalis racing up the stairs in the Manhattan offices of Bernard Madoff Investment Securities dipasquale, leaps up the stairs, two at a time, ripping a laptop with his right hand. And he burst through the doors of the 19th floor. Catch his breath. It makes his way to Bernie Madoff's office.
Do you, Pa., takes a moment to compose himself. He's Bernie Madoff's right hand man and he knows he needs to look presentable given the crisis they're facing. Days ago, the office got a call from yet another investor who'd read the report by the journalist Mike Ockrent. It's a story that's given them endless headaches because Ockrent reported that Bernie Madoff appeared to be running some sort of investment fraud. Client is named Jeffrey Tucker and his company, Fairfield Greenwich Group, is absolutely crucial for Bernie Madoff's business.
They pull together hundreds of investors and then funnel their money to Madoff altogether. They account for billions of dollars.
They decide to pull out. Madoff will be ruined. So dipasquale and Madoff came up with a plan that's extremely risky, but their best option. And today they'll see if it's going to work. DiPasquale re-enters the office and finds Madoff standing by a window. Jeffrey Tucker, the client is seated on a couch. After a quick reading, he Paschalis sits down next to Tucker and opens the laptop he's been clutching for the last ten minutes. Then DiPasquale shows Tucker a detailed list of activity within his account, Tucker not, and then opens a briefcase.
He takes out a series of spreadsheets and silently begins to compare them to the numbers on the screen. Tucker glances back and forth at the spreadsheets and then back to the computer, dipasquale he feels like he might be sick. This is about as risky as it gets because while the details on the computer may look real, they're all entirely fake. IPASS Paschalis spent the last two days developing a program that would make the activity look real. But the truth is there is no activity.
The investments are all gone for minutes. Paschalis sits quietly beside Tucker waiting for the verdict. Tucker keep scanning the figures going back and forth between the spreadsheets and the computer. And then suddenly he stops focusing in on a discrepancy between the two sets of records. At that moment, DePasquale feels a wave of nausea wash over him. There's no doubt about it. They're going to be caught. The business will go down. He personally will go to prison.
Everything they've worked for, the money, the fame, all of it will be gone. Truth is about to come out. But then something surprising happens, Jeffrey Tucker smiles. He says he's happy, impressed with the performance of his account, and he rises and shakes hands with Dick Pascaline Madoff. He says he's not sure what all the fuss is about. Ever since that article came out. And Tucker, thanks DePasquale for his time and walks out of the office for a moment.
Frank DiPasquale stands in Silent Shot and he looks at Madoff laughs feeling an incredible relief. That was close. But Paschalis now sure of it. If they can fool one of the most savvy investors in the country, there's no one who can stop them. American Scandal is sponsored by ZIP Recruiter, think about the perfect employee, what skills, talents and experience does this person have? They're probably detail oriented, dependable problem solvers with initiative. Now, think about how many other companies want the exact same thing if you're hiring.
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There's a click and then a pale yellow light turns on. Markopolos pauses to gaze around the dusty space full of faded boxes and stacks of old board games. But there's also a wooden desk covered with a pile of folders. Markopolos sighs. This is now his office and the place where he makes a living or tries to. A year ago, Markopolos left his job as a financial analyst in Boston. He'd worked there for 13 years and he planned to stay at the company.
But after he tried to blow the whistle on Bernie Madoff spoke with reporter. His life took a turn for the worse. He could hear his coworkers whispering about him at the WaterCooler. The jokes went on and on. Everyone thought he was crazy, that he was a fool for going after Madoff and all became too much. So Markopolos decided to quit and go work for himself as a fraud investigator. He was confident he could find lots of work and uncover misdeeds on Wall Street.
But so far he hasn't pulled a single paycheck. He has no illusion why it was his attempt to expose Bernie Madoff. Now no one will take him seriously. Markopolos sits down at the desk and opens a folder. He begins reading a document, but stops, he feels demoralized. He risked everything speaking to that reporter. That story should have changed the country, changed the world, but instead, no one seems to pay attention to it. Now, here, Markopolos sits in a dusty attic with no prospects for making a living.
Markopolos snarls pounded the desk, and he reaffirms for himself once again that he's not ready to give up. So he grabs another folder and makes a decision. He's going to file yet another report with the Securities and Exchange Commission. Maybe this time he can actually convince them to go after Madoff. Markopolos turns on his computer and begins typing report. He feels driven by an intense sense of purpose, a fire burning inside him. It's bad enough that Madoff is stealing from his clients, were committing some sort of fraud.
But by avoiding any scrutiny, Madoff has now heard Markopolos himself. Markopolos knows that if he can get the SEC to take on the case, prosecute Madoff, everything will change. People will finally see Markopolos as legitimate. Maybe finally he'll get some work. He begins typing the cover page includes a title and large font that says the world's largest hedge fund is a fraud. He smiles. He knows that should get the SEC's attention. Then he cracks his knuckles, takes a sip of coffee and begins typing as fast as he can.
He describes the fraud in my new detail and feels his momentum picking up. He keeps going page after page, not pulling any punches. Finally, Markopolos stops typing. He thought he'd been working for maybe 15 minutes, but when he looks at the clock, he sees that nearly four hours have passed. He chuckles to himself because for the first time in months, he feels good again driven. What he's written offers undeniable proof of Madoff's guilt, and he can only hope that this time the SEC will take him seriously.
Five months later, Megan Chung approaches an office building in lower Manhattan. She unwraps her scarf and gazes up to the top of the building, which towers in the cold, clear sky. Cheng smiles despite all the time she's been here. Somehow coming to work never gets old. Then she steps into the building, which houses the New York office of the Securities and Exchange Commission. Although Chung is only in her 30s, she's already the branch chief of the office's enforcement division.
That means she investigates financial crimes committed in New York City, the financial hub of the United States. Chang steps into the building and a few minutes later she walks into her government office. The work may not have the glitz and glamour of investment banking, where you can make millions overnight. And Cheng knows that most people have a low opinion of officials. They have a reputation of just putting in time until they can get a high paying job on Wall Street.
But for Chang, that's not the goal. She's proud of her job and proud to be policing Wall Street, someone who makes sure the financial industry plays fair. Chung is selling her things on her desk when she hears a ding from her computer. She has an email and it's from her boss, Doria Bachenheimer. The message contains some big news. They're taking on a new case involving Bernie Madoff. Chung can't help but raise her eyebrows. Madoff's big name on Wall Street and one of the most powerful men in the world.
He commands billions of dollars. He's the definition of success in finance. Bachenheimer explains that they received a submission which raised the possibility that Madoff could be committing fraud. Chung shakes her head when she sees who this admission is from Harry Markopolos. She knows Markopolos all too well. He's already filed reports about Madoff. He seems like some kind of eccentric or maybe he's just jealous of Madoff. But this report appears different. It's convincing. And there's credible evidence that Madoff is either committing fraud or insider trading.
And so either way, now it's time to investigate. Chung sits down and considers the big task ahead of her, Madoff is an unquestioned legend of Wall Street. But Chung also knows that no matter how big a man's reputation may be, he is never above the law. So she writes back to thank her boss and opens up a new file. It's time to begin investigating Bernie Madoff. It's May 19th, 2006, six months since the SEC opened its investigation into Bernie Madoff.
Today, the SEC's New York office is buzzing with quiet anticipation. It's an electric atmosphere that Bernie Madoff can feel the second he steps into the office. Right now, Madoff is walking behind three officials from the SEC, their investigators. And while today could be a disaster for Madoff, he knows what he needs to do. He has to stay calm and appear unruffled as they grill him about his company. Madoff steps into a conference room and shakes hands with the lead investigator.
She looks like she's young, maybe 30, really no more than a kid. Madoff should have no trouble fending her off. They'll only take some charm and patient explanations in order to earn her trust. That's how Madoff has conquered the world of finance by gaining people's trust across a wide network, making them believe that he is in control. The group sits down at a conference table and then the woman grabs a notepad. Mr. Madoff, my name is Megan Chung.
Thank you for volunteering to come speak with us, Mr. Chung. It's my pleasure. I only hope I can help. I apologize for bringing up such unpleasant business, but we've received allegations against you and I'll get right to it. Some have questioned how you've gotten such consistent returns in your investments. Well, Miss Chung, many, many people ask questions about how I do what I do. I'm sure you understand my livelihood depends on not telling them anything.
But that's a rule I'll break for you. Well, of course, Mr. Madoff. And thank you.
So that how did you get such consistent returns? Well, here's the big secret, and that's that there is no secret. It's just the elbow grease to finance research, research and making good decisions based on research.
Well, if you wouldn't mind, could you give us an insight into how you make your decisions made after ends and leans in?
He knows that everyone likes to be part of a secret or an exclusive club. That's how he's gotten billions from his investors and that's how to win over the SEC. Well, there are some things you learn after decades in the industry. Now the market looks like it's a bunch of chaos. Right. But the truth is there are patterns. My brother Pete, he's always been a wizard with technology and with enough research. We can identify those patterns. I don't I don't work like other traders, they go off knee jerk reactions instead, try to stay calm.
I just make decisions based on my feel for the more I understand. Now on to the next point, Mr. Madoff. You have a London office. Correct me if I'm wrong. That's where you execute all your trades. Madoff maintains a gentle smile, but inside he feels himself seizing up. This is the first big trap. Chung could subpoena his trade records from London. And if she does, she'll see that no trades exist. But still, he stays calm.
That's impressive research. You've done some of yourself. But yes, as I'm sure you know, most of the trading that I do is based in Europe. And who has custody of the actual stock? Is it you or your clients? This is one of those paperwork issues you run into after so many years in this business. It can be a headache so strong. The way it works is we actually hold onto the assets. That's the easiest way.
If our clients want to trade again, it's just less paperwork. Oh, OK. OK, so Mr. Madoff, that means that you have the actual paper stock certificates and your London office sends those to you. Madoff's panic begins to rise. This is another trend. Next, she'll, of course, ask to see those stock certificates because those stock certificates offer proof that Madoff trades on the stock. He says he does, but the certificates don't exist.
So Madoff thinks as fast as he can. Well, as you can imagine, when you manage tens of billions of dollars of investments, you end up with a with a lot of stock certificates and strong even though I'm an older man, I've I've always hated having to file away papers. So what I do is I store the actual certificates in the depository trust company here in New York. We're fortunate to live in this day and age when you can store your stock in something like a bank vault.
Chung writes a final note and then rises. Well, must remain. I think we're done here. Thank you again for coming. Was my pleasure. You let me know if you have any other questions, big or small. Madoff stands and maintains his gentle smile, but as he walks back to the elevator, his chest begins to constrict. He was sure that he could control the situation, that he could carefully strong arm the lead investigator. She is just a kid, after all.
She was no fool. She did her homework and now she has everything she needs to start looking into his entire business. And if she does, she'll be able to put him away for a very long time. American scandal is sponsored by ancestry. Maybe you've heard that you have your father's eyes when your mom's sense of humor or you laugh like Uncle George or love words like your grandmother, those resemblances aren't limited to family. Inside you in every one of your cells is a small piece of the history of humanity, a story that goes back generations that proves you and me and everyone on the planet are related.
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He throws it open, then ducks' into the stairwell and wait. So far, so good. Doesn't seem like anyone noticed him. Then DePasquale. He begins to climb the stairs past the 18th floor where many of Madoff's employees do their work. Then he reaches the 19th floor where Bernie Madoff himself has an office. Before he enters, he starts to catch his breath. Normally dipasquale wouldn't be sneaking around like this. He's Bernie Madoff's right hand man and he's worked in this building for years.
But these aren't normal times. About a year ago, Bernie Madoff drew certain that he and Pascall were about to be arrested. He was sure the SEC was going to have them locked up, but the police never came. Instead, investigators from the agency showed up and then never left. They camped out on the 18th and 19th floor. They decided to continue their investigation in person. And while they still haven't asked for any stock certificates, they've been poring over documents, looking for evidence of fraud or other financial crimes.
DiPasquale knows they won't find much evidence on the 18th and 19th floor. But the SEC can't know about the 17th floor. That's where Depass Galleon, a small group of others, were. It's the beating heart of Bernie Madoff's Ponzi scheme, the operational center where DePasquale moves funds from one client's account to the next. And that's where he generates fraudulent records showing the clients still have money in their accounts. The SEC can never know about the 17th floor, and that's why DiPasquale has spent the better part of a year sneaking around the building like some kind of cat burglar.
Deep exit the stairwell and heads toward Madoff's office, he doesn't know why Madoff asked him for a meeting, but when he enters the room and sees Madoff s expression, he can tell something is wrong. He pascall gingerly steps forward. Then he asks Madoff if this is it, if today is the day Madoff looks out the window at Manhattan Skyline DePasquale, I can see his face reflected in the glass and he sees Madoff, not Madoff. Then says from now on, their lives won't be the same.
Things are about to change. He personally feels his legs grow weak. He knew it was only a matter of time. They may have kept the SEC from the 17th floor, but something was bound to catch up with them. Madoff then picks up several sheets of paper from his desk and steps toward. But then he stops, shakes his head and suddenly breaks into roaring laughter. DePasquale stammers and laughs nervously along with Madoff. Then he demands to know what's going on.
Madoff tells him that it's over. The SEC analysts have gone home. They've just cleared Madoff of all suspicions of fraud. He Paschalis stunned. He can't believe what he's hearing and now starts laughing uncontrollably. They should be in prison serving life sentences. But that's it. The investigations just closed. Madoff keeps laughing and hands over the sheets of paper he's been holding. He personally glances at them and at first he almost can't make sense of what he's looking at.
Then it hits him. These are resumes and job applications from the SEC officials. They finished investigating Madoff and they put in applications to work at Madoff's company, DePasquale. He looks up and shakes his head. Then he begins to laugh again. This is unbelievable. These Gally Clapp's Madoff on the shoulder and gives it a squeeze. The investigation is over there free. Nothing can stop. It's August 2007, just a few months later on this evening, Bernie Madoff is beaming as he gazes across the newest member of his family, an 88 foot yacht.
It's named The Bull, and it cost him seven million dollars. But Madoff knows this glorious ship is worth every penny. Right now, he's steering it to dock among a group of other massive yachts in the French Riviera. Madoff breathes the salty air as he looks out at the sky above. It's awash in a sunset of orange and yellow. This is going to be a perfect night. Madoff will have exactly what he wants. The Ocean Breeze dinner with his wife Ruth aboard a new ship.
Bernie turns the ship's wheel as the vessel glides toward the dock. But as he approaches a boy, he realizes that docking this craft might be more difficult than he imagined. It's a massive boat. He looks right and catches a look of concern on Ruth's face. Ruth. I see that look. You worry too much. You worry too little. I promise you, nothing's going to hit us. Nothing can ever hurt us. Bernie steers the ship around the first barrier dock and then glimpses the white rock houses that peppered the hills around the French Riviera.
One of those is their newest vacation home. Bernie grins, gestures toward the house. Not bad, huh? You know, sometimes I still can't believe this is our life. Well, believe it, Ruth. It's all very real. But, you know, I get this feeling sometimes like I wonder if it's all going to vanish. Suddenly reality is just going to hit us in the face. Bernie shoots a glance at his wife. He's not sure whether she knows something she shouldn't, whether she even has a clue about the hole he's turning himself into.
He doubts it. But either way, he won't let her hold onto any fears. Not tonight and not in the future, because even if his Ponzi scheme has gotten deeper, someday soon he'll find his way out of it because there's nothing in his way now that the SEC has stepped aside. Ruth, look around. Look at the boat, the blue water, the sky, that house, this whole world. It's ours. We earn it. Nothing's going to vanish.
Nothing's going away. This is reality. I'll say it's perfect, you know, you sound like when we were kids. A hint of doubt. Bernie slows the engine and drains it, Ruth. Well, that's because I know what I want. Oh, what's that? Come on over here. With the sun setting behind them, Ruth saunters over to Bernie. She stops and Bernie takes a hold of her hand and he leans in and the to kiss as the sun dips below the horizon in the waves lap against the side of the boat.
Bernie pulls back and looks at Ruth, he's filled with a tenderness that's almost overwhelming, he can't remember the last time he felt this happy or this free. Sure, he has problems at work. So does everyone. And no problem is too big to overcome. What's most important is the life he's built, the choices he's made. He's proud of himself and he's ready to celebrate. So he grabs a bottle of champagne and launches the cork, goes flying into the opposite side of the deck and rattles around.
He and Ruth burst into laughter. And then Bernie pours each of them a glass, two glasses clink in a toast to the good life they lead as he sips champagne. Bernie thinks again about the Ponzi scheme he's built. He has no doubt he will get out of it, maybe slow. It may be difficult, but he'll deal with everything soon enough. For now, he's happy to feel like the king of the world. Next on American Scandal, Wall Street gets pummeled by a financial crisis, and as markets crash, Bernie Madoff has to find a way to keep his clients from panicking, from wondering.
This is episode two of Bernie Madoff for American Scam. If you like our show. Please give us a five star rating and leave a review. Be sure to tell your friends, subscribe on Apple podcasts, Spotify or wherever you're listening right now. Join one, replacing the one to listen to episode one week early and at three you'll also find some links and offers from our sponsors. The episode supporting them helps us keep offering our shows for free. Another way you can support the show is by filling out a small survey and one income survey to tell us what topics we might cover next.
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Be sure to listen to my other podcasts to American history tellers and business movers. A quick note about our reenactments. In most cases, we can't know exactly what was said, but all our dramatisations are based on historical research. If you'd like to learn more about Bernie Madoff, we recommend the books to Good to Be True by Aaron Arvedlund and The Wizard of Lies by Diana Enrique's American Scandalous, hosted, edited and executive produced by me, Lindsay Graham for Airship Audio Editing by Molly BOQ Sound Design by Derek Parents.
This episode is written by Charles Olivier, edited by Dave King. Our senior producers gave Rezvan. Executive producers are Stephanie Gen's, Jenny Laura Peckman and Hernan Lopez for wondering why. Beauty industry, mega companies Estee Lauder and L'Oreal both started small but had to play dirty to claim customers ripping off products, stealing counter space and copying ads. Hi, I'm David Brown, the host of Wonderings Show Business Wars. We go deep into some of the biggest corporate rivalries of all time.
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