Madoff’s son a suicide
This is terribly sad. It’s not for Bernie Madoff that I have compassion, it’s for the wife and the children.
I have written several times before about the Madoff family and their guilt or lack thereof (this piece focused primarily on the sons). I am of the opinion, until proven otherwise, that the sons did not know of the father’s crimes until he confessed.
[ADDENDUM: Here’s an article that appeared in the WSJ today, but before the news of Mark Madoff’s suicide broke. It discusses some of the repercussions of the Madoff scandal for the family members, and says this about Mark:
“Mark remains unalterably bitter about his father’s deception and the injury his father has caused,” said a spokeswoman for the two men. “Andy was also deeply impacted by his father’s deception.”
Neither has talked with his father or mother in two years, mostly out of personal choice and also because of legal sensitivities, a person familiar with the matter said. Mark Madoff recently has been using an email address that doesn’t include his first or last name, a friend noted.
This week Mr. Picard, the trustee, sued children of Andrew and Mark, alleging that Ruth and Bernard Madoff transferred funds to them. A spokesman for Mark and Andrew and their wives declined to comment, as did Mark Madoff’s ex-wife.
And here’s more on the Picard suit.]
The children always seem to suffer for the sins of the parents.
Deeka: that’s the way I see it, too.
And the children’s children tend to suffer, as well.
Someone at Jammie Wearing Fool said he took the easy way out, which infuriated me:
http://jammiewearingfool.blogspot.com/2010/12/madoffs-son-hangs-himself.html
You don’t have to like suicide (I think it’s monstrously selfish) but please don’t act like hanging is easy. It’s slow and agonising – and that needs to be publicised every time someone does it. Not who their father happened to be.
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3613659.ece
Deeka and Neo: …unless the children themselves commit sins.
Bernie Madoff is someone’s son, too. I don’t think his parents are guilty of his crimes.
This ending was not inevitable, but it was unavoidable that the Madoffs would suffer massive social damage and remain under suspicion for having benefitted financially from the fraud. Society can punish even when the State will not. Humiliation is not the least of it. The old man inflicted a monstrous amount of damage on his family, in addition to the other families he damaged or ruined.
I wonder whether Mark Madoff would still have made the decision to report his father to the authorities if he had known what the consequences would be. Did he know? Should he have known? How would his calculus have been different, depending on whether he was guilty or innocent? Tragic material here, in the hands of a playwright of genius.
Neo, I’m sorry to say but you are wrong on your “lone wolf” theory about Madoff. Just about every investigator and prosecutor involved disagrees with you. You would be hard pressed to find a single fraud expert to agree with you.
Harry Markopolos sent a large memo to the SEC in 2005 exposing the fraud in detail. It is interesting to note that Markopolos was able to determine the fraud by just looking at reported trading records. He never even had to step into Madoff’s office.
Civil lawsuites ahve been filed against numerous Madoff relatives and associates, one large lawsuit lists 60 people and institutions all over the world.
There have been at least 7 arrests so far with more to come. Madoff’s wife and sons were corporate officers which automatically assigns fiduciary responsibilities on each of them. All three (both sons were lawyers and the mother has a masters degree) were intelligent enough to be aware of their responsibilities for protecting their investors. At the very least, all three are guilty of gross negligence of the worst sort.
There is more evidence. The company used an incredibly antiquated computer system that had been rigged through clever programming. Madoff never updated his systems because doing so would have exposed the fraud to too many outsiders. Since Madoff was never known to be able to code complex programs (something that would take years of training and too many hours for him to enjoy his ill gotten gains), he had help from IT experts who may also join him in prison. Others who will join him are his CFO, CPA, office employees and officers of feeder funds. Before the last indictment is made, you will end up changing your theory. There’s lots of evidence dear Neo, you just have to look. I strongly suggest you discuss this with any CPAs, CFOs, CFEs and other financial experts you may know. As a corporate CFO with unfortunately too much experience with fraud and defalcation situations (not as a guilty party or victim but as an investigator and analyst) I am always interested in other views. Since fraud touches on areas of psychology, you may be interested in learning more about this.
Jimbo: I never updated my posts, but I don’t subscribe so strongly to the “lone wolf” theory any more, and haven’t for quite some time. I read about a couple of the arrests. But I continue to believe the sons did not know. They were involved with a completely different wing of the business.
Now, whether they should have suspected something is a different story. But when it’s your own highly respected and trusted father, love (and trust) can be blind. I think the sons did not know. And I think the shock and betrayal was too much for this one particular son—plus the knowledge that most people thought him guilty, too.
Of course, I don’t know enough about him to know for sure, but that’s what I believe very firmly, and I’ve seen nothing so far to contradict it.
Neo: I understand that filial love can be blind but this is usually found in adult children who are easily fooled. Madoff’s sons were highly educated and lawyers are a skeptical, suspiscious lot. Most lawyers I know love their parents but would not be easily fooled by them. They may rationalize their parents bad behavior, but for an entire family to be in denial, well that is a longshot. If you read the Wikepedia article and its sources, you will note that it took an entire full time staff just to fake the more than 1,000 account statements each month. One of the brothers was the compliance officer. For an accomplished lawyer in his forties acting as compliance officer to not notice anything wrong there can only be two possibilities: 1) the brothers were part of the scheme or 2) Both brothers who managed to survive law school and pass the bar exam somehow suffered extreme brain damage from an accident that rendered them mentally deficient. A simple medical examination can easily rule out #2. The evidence so far points to the mother having knowledge since she started to mysteriously empty out her accounts before the fraud was exposed.
I find it hard to believe that even though there were at least a couple of dozen employees and assiciates in the business who were in on the scam and who constantly communicated with the two brothers and nobody told them what was really going on. Did Bernie tell his staff “Look guys, don’t say anything to my two boys, they haven’t a clue as to what we are really doing”?
Jimbo: the sons were involved in the other wing of Madoff’s business, which was kept separate.
It is always easy to see things ex post facto. However, this father was respected by the world, loved and trusted, and to step outside of that and suspect him would have required an emotional leap that few people (very few, actually) would be capable of. It’s not about legal training or anything intellectual. It’s on another level entirely. And Bernie protected them (he may have thought) by keeping the two wings of the business very separate.
Fathers can have a HUGE emotional power over sons (and daughters), especially highly successful fathers who are venerated by the world at large and considered financial geniuses. We protect ourselves by saying ah, we would have known had we been in their place. But I contend that very few would be able to make that leap.
Here are some interesting quotes from an older article in Vanity Fair:
Do not underestimate the emotional power of a father like that. Very difficult to be objective about him, and to challenge anything he does.
Madoff was a MASTER manipulator.
Hence, ANYTHING he told his sons would have been SPUN.
It goes with his archetype.
That he WAS fooling them only increased the fathers contempt for the ‘kids.’
——-
Having seen this level of deception too close to home: parents can, and do, roundly abuse their authority to warp the opinions and knowledge of their children — all the time.
So…
I can easily believe that the kids were kept at bay…
While the rest of the conspirators were working their ‘magic.’
The anniversary date would have revisited all the awful feelings — and a devout wish to Hamlet.
BTW, depending on the drugs and technique…
Who can say how painful the death was?
But selecting a DOG COLLAR…
Sheesh…
How low can one go?
I think perhaps Madoff is in prison in two ways. One is the actual prison, the other is the knowledge of what he has done to his family. And now this, he knows he is responsible for his own son’s death. That is a major burden.
Jimbo, didn’t the sons turn in their father after he confessed the scam to them? They should have known but then again Madoff seems to have fooled a lot of people who should have known.
Bernie’s wiring is severely messed up. He’s a sociopath and likely his sons experienced all that was abnormal as normal. The conflict must have been very, very great; they were doomed from the start to ever experience anything approaching normal.
As far as his sons not knowing: Never underestimate the power of denial, especially if you’ve been raised by a sociopath. Most likely the suicide was an attempt of revenge against the Dad, to whom, it will not matter in the slightest.
I have more sympathy for Madoff’s sons. My grandfather was an extremely domineering man and there is no way, considering the family dynamic he so lovingly established, that his sons would have dared question him. This was in spite of numerous shady dealings.
I suspect that was why he put his family in the business, at least in part. He knew they could be quietly intimidated into not even considering questioining him.
Liz, The sons, as with Madoff’s sons, still bear some of the guilt. They knew right from wrong and in the case of Madoff’s sons, they knew what was legal and illegal through their training. Neither son would be able to use an insanity defense for this reason. Neo has said that the sons worked on the “other” side of the business. You all need to know that there was no “other side” to the business because there was no business. Everything was faked. There were no trades, no brokerage accounts, no securities held in accounts or real assets. All of the trades were faked and falsely recorded. This was a small company that handled billions of $ as investments and had about 50 employees. Both sons were involved with something called compliance in the management of trading activities that didn’t exist except on paper. You all need to realize, that even the dumbest of financial professionals, accountants, traders and yes, even lawyers serving as compliance officers, had to know that a major scam was going on. They all profited from it by drawing huge salaries, fabulous bonuses and perks. The employees knew about it but kept quiet because the scam was their bread and butter. Madoff knew it and that is how he maintained control over his employees and not just his sons. As it turns out, Mark was facing some serious criminal charges and as a lawyer, he knew he had no “plausible deniability” and therefore could end up in the slammer. Others will be charged and there may be more suicides (Mark isn’t the only one so far, at least one client has killed himself ). My big conspiracy nightmare is that there were high ranking people in the SEC and elsewhere who were in on this scam. Madoff was not so much a pupetier as he was a very clever gang leader. Puppets don’t know what they are doing, gang members and accomplices do and are therefore responsible.
Jimbo: I have no idea what you’re referring to. Everything I have read about the part of the business the Madoff sons ran is that it was legit, and separate. Here, for example, is a typical discussion of it:
I came across some interesting facts about the son when I was reading about the suicide. Mark lived an extravagant lifestyle. His bank or money market accounts showed that he withdrew more than he deposited or something like that. He probably knew about the con.
As for suicide, it’s a myth that it’s an act of revenge or punishment against others. It’s an act of utter desperation when the pain of your life becomes too unbareable to go on.
I for one decline to fixate on the Madoff(s).The truly great Ponzi artists are alive and thriving despite an estimated $100trillion of unfunded liabilities in the various Federal entitlements which they in the Congress have overseen, and, like Madoff, have been paid for supervising and “investing”.
Neo, you are right about the “legitimate business”. In a recent article in the Financial Times
http://www.ft.com/cms/s/0/05013a3e-061c-11e0-976b-00144feabdc0.html#axzz183DmKHCD
it covers the market making company as a separate business that was indeed a business. This is typical of many organized crime gangs that use legitimate businesses as fronts. Like many front businesses, this one was not very profitable and it was sometimes subsidized by the larger “scam” side of the operation. This is proven by the fact that your article states that this business was sold for only $15 million – hardly enough to pay a fraction of the legal bills. Both sons were oficers in the trading company and were probably not allowed on the 17th floor where the inner circle members were allowed. Both sons had to have known of their lower “foot soldier” role in this crime organization just as many gangster family sons often have lesser roles to protect them. Madoff gave his sons and wife some plausible deniability but the whole family was smart enough to know that the source of their fabulous lifestyle was tainted.
This is a conspiracy that involves at least several dozen people in and outside of the organization. It may even include some SEC employees (one was related to Madoff by marriage and Madoff had lots of friends there). Large conspiracies are unusual but can and do happen. The Equity Funding scandal of the 1960s and 70s involved a conspiracy of over 100 people. This psycological mumbo jumbo about Madoff being some kind of super patriarch with amazing power over people is bunk. Madoff was an extremely clever crook who managed a large and excellent team of conspirators to engineer a successful scam. He survived so long because so many others who should have seen through everything were stupid or didn’t care. Even Madoff was surprised on how long it took to catch him. Psychologists should study how so many people outside the organization were easily fooled or refused to do anything. There were certainly many professionals who were not fooled such as the executives of Goldman Sachs, the editors of Barrons and Harry Markopolos. Perhaps Madoff did us a favor by finding out the weaknesses in our financial regulatory systems.
Maybe not so innocent.
http://online.wsj.com/article/SB10001424052748703727804576017830974885652.html?mod=mktw