The Wizard of Lies: Bernie Madoff and the Death of Trust

For my colleagues at
The New York Times
,
yesterday, today, and tomorrow;
and for Larry,
forever

Cast of Characters

Prologue

1 An Earthquake on Wall Street

2 Becoming Bernie

3 The Hunger for Yield

4 The Big Four

5 The Cash Spigot

6 What They Wanted to Believe

7 Warning Signs

8 A Near-Death Experience

9 Madoff’s World

10 The Year of Living Dangerously

11 Waking Up in the Rubble

12 Reckoning the Damage

13 Net Winners and Net Losers

14 The Sins of the Father

15 The Wheels of Justice

16 Hope, Lost and Found

Epilogue

Acknowledgments

Notes

Index

The Madoff Family

Bernie Madoff
, founder of Bernard L. Madoff Investment Securities

Ruth Madoff
(née Alpern), his wife

Mark Madoff
, their elder son, born 1964

Andrew Madoff
, their younger son, born 1966

Peter Madoff
, Bernie Madoff’s younger brother

Shana Madoff
, his daughter

Roger Madoff
, his son

Ralph Madoff
, Bernie Madoff’s father

Sylvia Madoff
(née Muntner), Bernie Madoff’s mother

At Bernard L. Madoff Investment Securities

Eleanor Squillari
, Bernie Madoff’s secretary

Irwin Lipkin
, Madoff’s first employee

Daniel Bonventre
, the director of operations

Frank DiPascali
, the manager on the seventeenth floor

Jerome O’Hara
, a computer programmer

George Perez
, his coworker and officemate

David Kugel
, an arbitrage trader

The Accountants

Saul Alpern
, Ruth Madoff’s father

Frank Avellino
, Alpern’s colleague and successor

Michael Bienes
, Avellino’s longtime partner

Jerome Horowitz
, an early Alpern partner and Madoff’s accountant

David Friehling
, Horowitz’s son-in-law and successor

Paul Konigsberg
, a Manhattan accountant

Richard Glantz
, a lawyer and the son of an early Alpern associate

Individual Investors and “Introducers”

Martin J. Joel Jr.
, a stockbroker in New York

Norman F. Levy
, a real estate tycoon in New York

Carl Shapiro
, a philanthropist in Palm Beach

Robert Jaffe
, his son-in-law

Jeffry Picower
, a secretive New York investor

William D. Zabel
, his longtime attorney

Mendel “Mike” Engler
, a stockbroker in Minneapolis

Howard Squadron
, a prominent Manhattan attorney

Fred Wilpon
, an owner of the New York Mets baseball team

Major U.S. Feeder Funds

Stanley Chais
, a Beverly Hills investor

Jeffrey Tucker
, a cofounder of Fairfield Greenwich Group

Walter Noel Jr.
, his founding partner

Mark McKeefry
, the general counsel at Fairfield Greenwich

Amit Vijayvergiya
, the chief risk officer at Fairfield Greenwich

J. Ezra Merkin
, a prominent Wall Street investor

Victor Teicher
, his former adviser

Sandra Manzke
, a pension fund specialist

Robert I. Schulman
, her onetime partner

International Investors and Promoters

Jacques Amsellem
, a French investor

Albert Igoin
, a secretive financial adviser in Paris

Patrick Littaye
, a French hedge fund manager

René-Thierry Magon de la Villehuchet
, his partner

Sonja Kohn
, a prominent Austrian banker and founder of Bank Medici

Carlo Grosso
, a manager of the Kingate fund, based in London

Rodrigo Echenique Gordillo
, a Banco Santander director in Madrid

Cohmad Securities

Maurice J. “Sonny” Cohn
, Bernie Madoff’s partner in this firm

Marcia Beth Cohn
, his daughter

Whistle-blowers

Michael Ocrant
, a writer for an elite hedge fund newsletter

Erin Arvedlund
, a freelance writer for
Barron’s
magazine

Harry Markopolos
, a quantitative analyst in Boston

Securities and Exchange Commission (SEC)

Christopher Cox
, chairman from August 2005 to January 2009

Mary Schapiro
, his successor as chairman

H. David Kotz
, their independent inspector general

Grant Ward
, a regional official in Boston

Ed Manion
, his coworker

Lori Richards
, a senior official in Washington

Eric Swanson
, a lawyer in Washington

Andrew Calamari
, a senior regional official in New York

Meaghan Cheung
, a lawyer in the New York office

Simona Suh
, her colleague

William David Ostrow
, an examiner in the New York office

Peter Lamore
, his colleague

Lee S. Richards III
, a New York lawyer in private practice, appointed as receiver for Madoff’s firm

Family Lawyers

Ira Lee “Ike” Sorkin
, defense lawyer for Madoff

Peter Chavkin
, lawyer for Ruth Madoff

Martin Flumenbaum
, lawyer for Mark and Andrew Madoff

Federal Bureau of Investigation (FBI)

Ted Cacioppi
, special agent

B. J. Kang
, his colleague

Federal Prosecutors in Manhattan

Preet Bharara
, U.S. attorney for the Southern District of New York

William F. Johnson
, chief of the Securities and Commodities Fraud Task Force

Marc Litt
, the lead prosecutor in the Madoff case

Lisa Baroni
, his colleague

Securities Investor Protection Corporation (SIPC)

Irving H. Picard
, the trustee for the Madoff bankruptcy case

David J. Sheehan
, his chief legal counsel at Baker & Hostetler

Federal Judges in Manhattan

Louis L. Stanton
, a district court judge

Burton R. Lifland
, a bankruptcy court judge

Denny Chin
, a district court judge

Richard J. Sullivan
, a district court judge

Victims’ Advocates

Helen Davis Chaitman
, a lawyer in New Jersey

Lawrence R. Velvel
, a law school dean in Massachusetts