The Madoff Hustle, This World, BBC2 at 1900 BST on Sunday, 28 June

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Willard Foxton's full investigation on The Madoff Hustle, This World, BBC2
at 1900 BST on Sunday, 28 June.

http://news.bbc.co.uk/2/hi/business/8120411.stm
Unravelling the 'Madoff hustle'

A man whose father killed himself after losing his life savings in Bernie
Madoff's $50bn (£35bn) investment scam, has travelled across the US
unravelling how he fooled so many people, for so long.

Madoff is to be sentenced on Monday for masterminding the biggest con the
world has seen, which lasted for decades, netted billions of dollars and
ruined thousands of lives.

The 71-year-old fraudster is expected to spend the rest of his life behind
bars for orchestrating an enormous Ponzi scheme from his New York
headquarters.
“ I wanted to take all the medals my father had won for gallantry and
throw them into Bernie Madoff's face ”
Willard Foxton

One of his victims was William Foxton, a 65-year-old retired British army
major, who shot himself in a Southampton park in February after
discovering Madoff had cost him his life savings.

He had worked in the world's conflict zones - Oman, Bosnia, Kosovo and,
Afghanistan. In 1999 he was awarded the OBE for his work in Kosovo.

His son, Willard Foxton, 28, went on a 14,000-mile journey to New York,
Boston, Florida and California after his father's death.

"I wanted to take all the medals my father had won for gallantry and throw
them into Bernie Madoff's face, to make Madoff know the sort of man he
killed," Mr Foxton said.

"But as my feelings and my passions cooled, I realised that what I really
wanted to do was to just find out more about Madoff.

"I wanted to find out about this titanic crime he'd perpetrated and I
wanted to work out exactly how my father had become entangled in all of
it."

Mr Foxton found some of Madoff's victims had witnessed him in action.

Two weeks after her husband died, Norma Hill headed for the Lipstick
Building, one of Manhattan's iconic skyscrapers and the home of Bernard L.
Madoff Investment Securities.

“ He put his arm over my shoulder and he looked at me and he said to me,
don't worry, everything is going to be fine ”
Norma Hill, Madoff victim

She wanted to discuss the investments her husband had made with Madoff.

"He appeared to be a really nice, kind man, sort of like anybody's
grandfather.

"He put his arm over my shoulder and he looked at me and he said to me,
don't worry, everything is going to be fine."

Mrs Hill believed Madoff and kept her money with him for 21 years, but
now, after losing nearly all her pension and savings, she will be forced
to sell her house.

Paul Allen, 89, also invested with Madoff.

Last December, just a week before the conman was arrested, Mr Allen put in
a call to Madoff's offices because he was worried about the credit crunch
and was thinking about cashing in his investments. He was transferred
straight to the boss.

"He got on the phone immediately and he said, 'well, why are you doing
this after all these years and with the success we've had?'"

Even though Madoff knew his Ponzi scheme was imploding, "he didn't sound
distressed at all", Mr Allen recalled.

"He should have been on the Shakespearean stage, he's a great actor."

Mr Allen chose to stay with Madoff, and a week later his investments were
wiped out.

Madoff did not just rely on his personal charm but used his social
connections, particularly within New York's Jewish community, to ensnare
victims - and cash.

Madoff's con hit the Florida island of Palm Beach, a winter retreat for
the East Coast's millionaires and billionaires, particularly hard.

Madoff was a member of the exclusive Palm Beach Country Club, and it is
thought that a third of its members invested in his Ponzi scheme.

Martin Gruss was one of the lucky ones who did not invest but he was at
the club in the aftermath of Madoff's arrest.

"There were maybe a dozen people in the dining room, hardly anybody was
there, and the people that were there looked like they had been hit in the
face with a frying pan," he said.

Madoff was trusted by his victims partly because of his sterling
reputation on Wall Street.

Alongside his fraud, he ran a legitimate share-trading business that
provided the perfect cover.

Ed Nicoll, who has run several Wall Street trading companies, has known
Bernie Madoff for early 30 years.

At one stage, Madoff was chairman of the giant NASDAQ stock exchange.

Mr Nicoll believes that Madoff's establishment credentials helped his
fraud stay undetected for decades - right under the noses of the
regulator, the Securities and Exchange Commission.

"They were very close to Bernie and they trusted Bernie," he said.

"And that trust that Bernie managed to create with the Securities Exchange
Commission blinded them."

Bob McMahon, is a computer expert who worked for a year at Madoff's
legitimate share-trading division.

The company's offices were split across three floors of the Lipstick
Building, and the fraud was run from the 17th floor, and it was rare for
employees from the rest of the office to be allowed on to that floor.

But one day Mr McMahon was given access.

"It was as if 17 were a cave, the rooms were dark, there were piles of
paper in boxes stacked nearly to the ceiling, and all of this old
technology," he said.

The 17th floor offices housed green-screen terminals, dot-matrix printers
and computers from the 1980s.

"Whenever I asked, 'one day it's going to die, what are you going to do
then?', the response that I got was that it was Bernie's problem, Bernie
will make that decision, we don't question it."

"Hindsight being 20-20, now we know it was a criminal enterprise."

The old technology was in fact being used to create the mountains of fake
account statements that were sent to Madoff's Ponzi investors, and the
computers were never upgraded.

"This would have required outside consultants to come in, and in doing so
the fraud would have been found out," Mr McMahon said.

Willard Foxton also tracked down a Madoff family friend, John Maccabee,
who first met Madoff over fifty years ago.

"I never saw anything particularly special about Bernie," Mr Maccabee
recalled.

"It was only in those years when he began making money that he came to
life in a way."

Mr Maccabee believes he knows what turned an ordinary middle-class boy
from the New York borough of Queens into the world's biggest conman.

"It's a man who was running from mediocrity and winding up like his parents.

"He wanted out of that. The middle of the middle of the middle of the
middle class."

**********
Dit bericht is verzonden via de informele D66 discussielijst (D66 at nic.surfnet.nl).
Aanmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SUBSCRIBE D66 uwvoornaam uwachternaam
Afmelden: stuur een email naar LISTSERV at nic.surfnet.nl met in het tekstveld alleen: SIGNOFF D66
Het on-line archief is te vinden op: http://listserv.surfnet.nl/archives/d66.html
**********