Friday, February 5, 2016
Who is Bernie Madoff???
That was my question too, UNTIL I happened upon a two part TV special this past Wednesday and Thursday evening. I flipped on the show fully expecting to turn it to American Idol after a minute or two, BUT found myself engrossed in this story.
The story of Bernie Madoff is fascinating! Even for a numbers-challenged person like me.
He founded and ran a Wall Street Investment Firm that was very successful for decades. He portrayed himself as a financial magician! The "lipstick" building in Manhattan was his world and many people were employed there making legitimate profits for their customers in the ups and downs of that business. His two sons developed a successful career as traders, and money managers in that place.
The office was modern, slick, and exciting. People counted themselves very fortunate to work at Madoff's. He was very successful and president of NASDAQ for 4 years.
BUT...Bernie had a secret! On the 17th floor of that magnificent building a very different type of operation was whirling. NO ONE was allowed on the 17th floor without Bernie's permission and he rarely gave it. There Bernie's old-time and extremely loyal friend, two female morally bankrupt women and a handful of bean counters reported to work daily. The employees on that floor generated thousands of reports and perspectives and sent them out to some of the richest people on the planet. You see, Bernie had artfully and very slyly convinced his clients that only HE could make them successful on the stock market. Those people GAVE HIM, voluntarily, BILLIONS of dollars for him to "take care of." His charm, timing, manipulation and sheer bravado won them over.
The secret? Bernie never made ONE trade with their money. NOT ONE! He took their billions and spent it on his very lavish lifestyle which included 4 ka-million dollar mansions, yachts, a collection of Rolex watches, lavish vacations, fancy cars, extreme parties and "over the top" gifts to his family and employees. He gave away rare cars, watches, and villas in Switzerland, with the intent of buying loyalty and friendship. It worked for decades.
The reports sent to his 17th floor customers were all BOGUS. Every page, every column, ever number was a lie. Every thing that happened there was illegal with serious consequences. The employees on THAT floor were the only ones in the know!
It went on for YEARS! When a client requested a payout he would offer to give them their money WITH the stipulation that once OUT of his organization there would be no returning. They folded, every time, continuing to TRUST the wizard. He spent their money and they received paper reports in the mail.
Well, to make a very long complicated story short, a numbers nerd caught wind of this operation and was able to look at the books. After about 5 minutes he declared, FRAUD.
The FBI moved in and soon it was very obvious that MANY investors were devastated. It took years to unwind the mess. Bernie had to confess to his wife and sons that his operation was all a LIE, that he'd been running a PONZI scheme for decades. They were stunned! The husband and father they thought they knew didn't even exist. He'd deceived them as well.
Many innocent employees were without a job, one son committed suicide, the second died of cancer, his wife was destroyed. A daughter-in-law had to change her last name to be able to function in society once again. His loyal secretary of 25 years was a key witness AFTER the scam was exposed. She handed the FBI Bernie's "black book" of phone numbers. It contained the names of ALL the folks he'd tricked.
BERNIE and several of his inner circle went to jail. Bernie's sentence was 155 years. He's living the good life in prison as a hero of sorts and has declared that at last he has no worries and is enjoying life.
Probably the most important line of the whole story was when Bernie (Richard Dreyfuss) looked into the camera and stated....."one phone call would have blown the whistle years ago. A secretary could have made that call." (To the government agency that oversees the financial world.)
And another line, "I told them (investors) what they wanted to hear, not the truth, and they believed me."
Wow! He told them what they wanted to hear, not the truth! Most of Bernie's victims were highly educated and very successful businessmen and entrepreneurs. They were good, charitable, smart folks.
Deceived, every one. Probably the biggest lie I/we believe is, "that can't happen to me."
One morally corrupt evil man destroyed many.
Truth (about anything) is important, whether we like the sound of it or not.