NPR logo

Madoff's Victims May Still Have More To Lose

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Madoff's Victims May Still Have More To Lose

Your Money

Madoff's Victims May Still Have More To Lose

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


This weekend, the elder son of the convicted swindler Bernard Madoff was found dead. Authorities say Mark Madoff hanged himself in his Lower Manhattan apartment using a dog leash. His two-year-old son was asleep in another room.

Mark Madoff had steadfastly maintained that he played no role in the Ponzi scheme that his father operated, but he faced legal troubles because of it. He was one of a number of relatives, friends and business associates of Bernard Madoff's who have been sued by investors hoping to recoup their losses.

We're joined now by NPR's Jim Zarroli. And, Jim, Mark Madoff worked at his father's firm for years, made a lot of money there. Did authorities believe him when he said he didn't know what was going on?

JIM ZARROLI: Well, we know two things. One is that the investigation is still going on, more evidence is going to come out. Number two, they didn't seem to have found anything on Mark Madoff. The authorities have filed criminal charges against some other people connected to the firm. He was not one of them.

It is true Mark Madoff worked at the firm. He worked, though, in the trading division, which was separate from the place, the division where the Ponzi scheme took place. And his lawyer always pointed out that, you know, Mark Madoff and his brother were, after all, the ones who turned their father in two years ago, and this is not what a guilty man would have done.

But a lot of people just found it impossible to believe he could have worked there for so long and not known what was happening.

SIEGEL: Mark Madoff did not face criminal charges, as you've said, but he is named in a civil suit. Tell us about that.

ZARROLI: Well, the bankruptcy court appointed a trustee to recover some of the money that investors lost. His name is Irving Picard. He's basically gone after a lot of people connected to Madoff, his relatives, even Mark Madoff's two small sons were named, Madoff's employees.

A lot of these people made huge amounts of money from the firm. They lived really well. They, you know, owned multiple homes. And Picard's position was that these were ill-gotten gains and they should give the money back.

And for someone like Mark Madoff, that was a real problem because he had trouble getting a job. He had that name, that notorious name. So no one wanted to hire him.

SIEGEL: But as you say, Picard is seeking to have the Madoff money end up returned to investors. How much money are we talking about?

ZARROLI: Well, that part is not going to be a lot. This was a multi-billion-dollar fraud. Where there is money is in the banks that did a lot of business with Madoff, and Picard is also going after them.

He's filed suit against, you know, JP Morgan Chase, for instance, and his position is if they didn't know what was happening, they should've. There were also some big feeder funds that would take money from investors and funnel it into Madoff's firm. Sometimes the investor didn't even know it was happening.

The people who ran these funds got huge amounts of money from Madoff. You know, some people might say they were kickbacks, and Picard is going after them. And he's already gotten some money, including $500 million from a Swiss hedge fund company, and more than $600 million from a Boston firm that shared office space with Madoff.

SIEGEL: Now, there's also a federal criminal investigation taking place now. How far along is that?

ZARROLI: Yeah, this is - I'll tell you, this is going to be just a legal saga that goes on for years. The authorities have arrested some people who worked for Madoff, his accountants, some back-office people, also his long-time aide Frank DiPascali. These are not big players on Wall Street, but they are cooperating with the government, some of them, and they are in a position to bring down bigger players, including these hedge funds that I talked about, which really enabled Madoff to stay in business all these years.

Some of these feeder funds are connected to major financial institutions. There was a suit against Sonja Cohen(ph), who worked with Madoff for 23 years. She ran a division of a major Austrian bank.

So the idea is that some of these back-office people at the Madoff firm could provide evidence against the bigger players. That seems to be what the government is doing right now to build its case.

SIEGEL: Okay. Thank you, Jim.

ZARROLI: You're welcome.

SIEGEL: That's NPR's Jim Zarroli, talking to us from New York.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.