The Madoff Chronicles: Inside the Secret World of Bernie and Ruth Read Online Free PDF

financial genius earned him a seat on the Hofstra board of trustees. He was still a member of the board on the day of his arrest. Fortunately for Hofstra, it has a strict policy of not doing business or placing its endowment with any member of its board of trustees.
    During college Bernie saved about $5,000 by running a business with his brother, Peter, installing irrigation pipes for suburban homeowners who wanted perfect green lawns. That was a lot of money in 1960, but Madoff’s intention was to pursue a career trading stocks. America was in a boom, and while there was money to be made servicing suburban lawns, Madoff knew he could make a lot more as an investment broker than as a landscaper. Peter told Bernie’s secretary, Eleanor Squillari, that Bernie ran the business and would use Peter “to go and collect bills, collect the monies, because Peter was cute and charming.”
    In early 1960, Madoff took the test that brokers are required to pass before being licensed to trade stocks and securities. Within a month of graduation, Madoff had passed the general securities representative test and had founded Bernard L. Madoff Investment Securities. He tried law school but dropped out after only a year at Brooklyn Law School. Madoff started by trading penny stocks in over-the-counter markets and that business would, over the decades, grow to become a huge and legitimate trading operation that dealt with large institutional customers and was well known on Wall Street. Less well known was Madoff’s investment advisory business, which served as the foundation of his Ponzi scheme. The corporate structure for Madoff’s life of crime had been established.
     
     
    His decision to join the financial industry may well have been influenced by his parents and Ruth’s parents.
    Ralph and Sylvia Madoff ran a suspect investment company out of their house under the names Gibraltar Securities and Second Gibraltar Corp. of Laurelton, New York. These businesses were registered in Sylvia’s name only. Some reports say Ralph had “tax problems” and didn’t want his name publicly attached.
    In 1963, the SEC moved to revoke the broker-dealer license of the Sylvia Madoff companies, for “alleged failure to file financial reports,” according to an SEC announcement from September 1963. Four months later, in January 1964, Sylvia Madoff withdrew her SEC registration and shut down the businesses, which had the effect of stopping a full investigation from being launched. The decision to close up shop may have been motivated by her instinct to protect her son—much in the same way Bernie himself sought to protect his inner circle when he saw the end coming.
    By the time his parents had come under suspicion at the SEC, Bernie Madoff’s securities trading operation was already up and running—and already crooked, according to what Madoff said to a person he confided in after his arrest. This person insisted on anonymity because of the sensitivity of the ongoing investigation, but Madoff said, “It began almost immediately and for the first few years, there were a lot of sleepless nights. But then I realized I could do it.” A scam from day one.
    This account is corroborated by an investigator, who was tasked to “reconstruct” Madoff’s fraud but not authorized to speak publicly. The investigator says the available evidence shows that the scam was well in place at least by 1964 or 1965, and “likely back to the beginning or near the beginning,” when Bernard L. Madoff Investment Securities first opened its doors.
    If true, this calls into question Madoff’s statement under oath when he pleaded guilty in March before U.S. District Court judge Denny Chin. “To the best of my recollection, my fraud began in the early 1990s,” Madoff told the court. It was the only key fact in his plea allocution prefaced with the “best of my recollection” hedge.
    Federal prosecutor Marc O. Litt immediately challenged Madoff. “The government does