Madoff's Calls From Jail

I woke up this morning to Bernie Madoff's unmistakable Queens accent on CBS New Radio 88 from interviews the jailed Ponzi schemer had with a journalist.

Madoff made a dozen collect phone calls from jail in Butner, North Carolina to Steven Fishman, a contributing editor for New York Magazine.

After Madoff's lawyer turned down his request for interviews, Fishman got in contact via another inmate, who is a published author and a new friend of Madoff. Fishman pursued Madoff after the suicide of his son Mark Madoff writing that he became "interested in the most tragic families and the elemental forces that had torn the apart."

Madoff gave the interview because he is interested in restoring his legacy and in setting the record straight, according to the author. He also feels he's been misunderstood and is not the person or sociopath he has been portrayed to be. We learn that Madoff is seeing a therapist in prison. She tells him: "You're absolutely not a sociopath. You have morals. You have remorse," according to the article.

Madoff wants us to know the $65 billion Ponzi scheme for which he is serving 150 years in prison was not about the money and that he was successful on Wall Street. "My business was successful for 35 years plus," he says. He didn't wake up one morning wanting to buy a boat or a plane. He claims his wife Ruth would have been happy if he'd been a teacher.

From "The Madoff Tapes" in New York Magazine:

"All of my friends, most of my clients the individual clients are not net losers. I made a lot of money for them. I was making 20 percent returns for them doing arbitrage for years. It was the people who came in very late in the game that got hurt. So did I make a lot of money for people? Yeah. I made a lot of money for people. Did people lose profits that they thought they made? Yes. You know... But did they lose capital. I'm confident that when this thing is all finished, very few people, if any, will lose their principal."

What Madoff wants to convey is how he ran a successful market-making business on Wall Street and siphoned business away from the big market makers who controlled the New York Stock Exchange. Madoff's firm was one of the first to use technology to match buy and sell orders. He credits his brother Peter with designing an automated trading system.

"In the early days, Madoff mostly employed technical and fairly low-risk arbitrage techniques built around his market-making business. "I always had a good feel for the direction of the market because of the order flow I was seeing," he said."

Madoff is still eager to take down the large financial institutions that he is suggesting were complicit in his fraudulent money making scheme. Banks such as Santander, Credit Suisse, UBS, for instance, that wouldn't give him the time of day early on, but later threw billions of dollars at him. What is most surprising is that these banks later had doubts about his returns, but they never pulled their money.

"Look," he said, "these banks and these funds had to know there were problems." Madoff told them absolutely nothing about how he made those returns. "I wouldn't give them any facts, like how much volume I was doing. I was not willing to have them come up and do the due diligence that they wanted. I absolutely refused to do it. I said, 'You don't like it, take your money out,' which of course they never did."

His four biggest investors, Carl Shapiro, an apparel manufacturer, Jeffry Picower, a Wall Street investor, Stanley Chais, a money manager, and Norm Levy, a real-estate developer, with their "outsized return expectations" pushed him to continue his fraud. He even suggests that Picower dictated the terms of his investments, which was what compelled his widow to give up $7.2 billion.

After deceiving the SEC for years, Madoff also has some thoughts on regulators and the most recent financial crisis: "It's unbelievable. Goldman ... no one has any criminal convictions -- the whole new regulatory reform is a joke. The whole government is a Ponzi scheme."

While one must take Madoff's comments about his crimes with a grain of salt, you can hear that he is very driven to tell his story as if he is still fighting for the little guy in some twisted way.