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

not entirely agree with all of the defendant’s description of his conduct,” said Litt to Judge Chin. “The defendant operated a massive Ponzi scheme through his company, Bernard L. Madoff Investment Securities, beginning at least as early as the 1980s.” Prosecutors are still trying to figure out precisely when it started, but it was certainly long before the date Madoff told the judge.
    This is a significant detail. If that statement was a lie, or if Madoff’s “recollection” was not at its “best” that day, and the scam did begin in the 1960s, it would also call into question the role of Ruth and many other Madoff family members and employees who were with Bernie in the early days. His brother, Peter, joined the family business in 1967. Ruth was there from the beginning.
    Ruth and Bernie were married in 1959 at the Laurelton Jewish Center, two years before she graduated college. Ruth breezed to a degree in Psychology from Queens College in three years, eager to begin life with Bernie. Once she was finished with school, Ruth helped to keep the books at Bernie’s company. At that time, Bernard L. Madoff Investment Securities was still a shoestring operation. Peter was fond of telling the story of how Ruth and his brother first ran the business from a folding card table in their apartment.
    As important as Ruth was to business operations, Ruth’s father, Saul Alpern, was even more essential. Alpern was a New York accountant who began to steer money to Madoff’s company from customers he knew in Queens or met while playing bridge over hot water and lemon at summer resorts in the Catskills. Hundreds of frugal retirees ultimately lost their savings because of following Saul’s recommendation from decades earlier.
    “Our place was fertile territory,” recalled David Arenson, whose family ran the Sunny Oaks resort in the Catskills where Saul Alpern and his wife, Sara, would spend the summers. Having heard Saul’s account of his son-in-law’s ability to pick stocks and earn big returns year after year, the retirees were eager to get in. “The fund only required about five thousand dollars to get in, so it wasn’t like you had to be rich. And they were promising something like eighteen to twenty percent.”
    The investors were grateful to be included by Saul in the great opportunity that Bernie’s investment company represented. When Bernie and Ruth would visit Ruth’s parents at Sunny Oaks, it was all very cozy. “In Yiddish, they’d say it was haimish , which means down home and folksy,” said Arenson. “There was an element of trust.”
    It was a family affair. Ruth kept the books, her father brought in the money, and Bernie pulled the strings, quickly becoming well known for his uncanny ability to make money even when others were suffering in down markets.
    Ruth loved her father and saw a lot of Bernie in him. “He really has such a great mind,” Jay Portnoy recalls Ruth saying of her father. “Don’t you think my father looks so brilliant?”
    As brilliant as his daughter thought he was, Saul Alpern’s dealings with Bernie would later lead to big trouble for his accounting firm, Alpern & Heller, which began recruiting clients for Madoff in 1962. By 1992 his firm had funneled $441 million into Madoff’s hands.
    Alpern’s accounting office was located in Manhattan, on East 40th Street between Fifth and Madison Avenues. Among Alpern’s employees were two accountants named Frank Avellino and Michael Bienes, who would later become partners when Heller died. When Alpern retired in 1974, the company dropped his name and became Avellino & Bienes. Even after Alpern’s departure, the firm continued to feed millions of dollars to Madoff for investment. According to SEC documents and people who were involved at the time, many of Avellino & Bienes’ clients had no idea of Madoff’s role in the business. The accountants guaranteed rates of return between 13.5 and 20 percent, the same impossibly high