Legal News

Bernie Madoff?s Secretary Talks (and Talks and Talks)

By Ashby Jones

Life on the Bernie Madoff beat has been a bit slow in recent weeks. Bernie’s in the clink, and the clawback lawsuits brought by the trustee for Madoff’s firm, Irv Picard, have only barely started to trickle in.

The Secretary Speaks: Today, however, there’s some news worth hitting. The June issue of Vanity Fair apparently has a 9,000-word article out (9,000 words!), co-written by Madoff’s former secretary, Eleanor Squillari, which spills the dirt — lots of it — on the convicted Ponzi-scheming fraudster. The article’s not on the Web — only in the magazine, which hits newsstands in New York and LA today. That said, the good folks at Conde Nast have offered up a sort of Cliffs Notes version of the article, accessible here. Our Cliffs Notes version of the Cliffs Notes version:

• Madoff's behavior changed drastically in the weeks before his arrest. He reportedly began taking his blood-pressure every 15 minutes, refused to look at his mail, and was constantly meeting with the heads of his feeder funds and Frank DiPascali, "the go-to guy for the investment-advisory business" (the vehicle for Madoff's Ponzi scheme).
• In the days after her husband's arrest, Ruth Madoff called Squillari multiple times and encouraged the secretary to provide her with certain information without notifying the bankruptcy trustees, which Squillari said she couldn't do. "Instead, I told the F.B.I. what had just happened. I was working for them now, not for Ruth and Bernie Madoff."
• Squillari believes Madoff meticulously planned out the particulars of his arrest. She believes he wanted the F.B.I. to find the appointment book he left on his desk, and he wanted his sons to find the $173 million in checks made out to certain employees and friends that prosecutors cited when trying to revoke his bail (he never actually intended to send them out, Squillari says).

Revenues to Relatives: In other Madoff news, the WSJ’s Amir Efrati reports today on a filing made by Picard in bankruptcy court late Tuesday.

Efrati writes that, contrary to some earlier assertions made by Madoff’s lawyer and others, Madoff used the fruits of his multibillion-dollar Ponzi scheme to lend millions to his brother and son, support his relatives’ business ventures and pay corporate card bills of his daughter-in-law, sister-in-law and captain of his boat.

The document doesn’t allege that recipients of funds had knowledge of the fraud to which Madoff has pleaded guilty. Lawyers not involved with the bankruptcy proceeding say the facts as alleged don’t suggest any reason the recipients of the money would suspect wrongdoing. Representatives for the Madoff relatives were not available for comment on Tuesday. Representatives for Madoff and his sons declined to comment.

Full post as published by Law Blog - WSJ.com on May 06, 2009 (boomark / email).