Personal Finance

Richard Behar exchanged emails with Bernie Madoff for a decade

Published

8 months ago

July 30, 2024

Business Finance News

Richard Behar

Courtesy: Lizzie Cohen

You probably haven’t heard Bernie Madoff‘s name in awhile, but that doesn’t mean the infamous fraudster’s story is over, or the pain he inflicted.

Irving Picard, an 83-old court-appointed trustee, still spends his days trying to claw back money from the those who benefitted from Madoff’s Ponzi scheme, and to reduce the staggering losses of others.

More than 100 legal battles over the greatest known fraud in history still rage on.

Richard Behar, who has just published a new biography, “Madoff: The Final Word,” is also still trying to understand how Madoff’s mind worked. What allows a person to rip off Elie Wiesel, who survived the Holocaust and went on to become a main chronicler of it? Or to sit with his wife, Ruth, in a theater and enjoy a movie while knowing that he’s erased the life savings of thousands of people all over the world?

Those questions haunted Behar — who tells CNBC he has long been fascinated by con-artists. So long after most other reporters had turned their attention elsewhere, he reached out to Madoff while the financial criminal served out his 150-year prison sentence in North Carolina.

Richard Behar’s book ‘Madoff: The Final Word.’

Behar started by sending his condolences to Madoff, whose son, Mark, had just died by suicide in Dec. 2010, the second anniversary of his father’s arrest.

Shortly after, an email subject line popped up in Behar’s inbox: “Inmate: MADOFF, BERNARD L.” That message was the start to a decade-long relationship between the two men, including roughly 50 phone conversations, hundreds of emails and three in-person visits. When Madoff died in April 2021, Behar was still writing the biography. Madoff often complained to Behar that he was taking too long on the book.

“He once joked that he’d be dead when it came out, which of course turned out to be true, although I never planned it that way,” Behar said.

CNBC interviewed Behar, an award-winning journalist and contributing editor of investigations at Forbes, over email this month. (The conversation has been edited and condensed for style and clarity.)

‘He never asked me one personal question’

Annie Nova: You write that you’re an investigative reporter with “a special fondness for scammers.” Why do you think that is?

Richard Behar: I’ve always been mesmerized by how the brains of scammers work. I’m especially intrigued, maybe obsessed, with scammers who steal from people who are very close to them — like Madoff did.

A scamster who I visited in prison in the 1990s did something similar. Until Bernie’s arrest, this guy ran the lengthiest known Ponzi scheme ever, for 11 years. He was orphaned and raised by an aunt and uncle, and yet financially devoured them, as well as his cousins, his wife’s parents, his best friend — even a nun who he charmed with his alleged faith in god. I wasn’t raised by my biological parents either, and spent my childhood in foster homes. I couldn’t pretend to imagine doing that to people who stepped up to care for me, but it’s endlessly fascinating to me. Maybe that’s where that fondness for scammers is rooted.

Bernard Madoff arrives at Manhattan Federal court on March 12, 2009 in New York City.

Stephen Chernin | Getty Images News | Getty Images

AN: Did Madoff take any interest in your life?

RB: Through a nearly decade-long relationship, he never asked me one personal question. That was mind-boggling. I’d sometimes give him openings, like telling him I grew up in a town not far from his hometown — with a similar but poorer Jewish subculture — but he said nothing. He couldn’t care less. I asked a psychologist about this, and she theorized that Bernie was such a malignant narcissist that he couldn’t “hold my reality, he could only hold his own.” I couldn’t be a three-dimensional human being to him, because if he can imagine that, he’d have to imagine the school teacher who has lost a pension.

AN: What was the most remorse you saw him show over what he’d done?

RB: I once asked if he could ever forgive himself for the Ponzi itself, and he said “No, never.” He insisted he felt great remorse for those who he stole from. But I never totally felt it. Never a tear. I asked why he didn’t cry at his sentencing, and he snapped: “Of course I didn’t cry; I was cried out.”

‘Prison was a great relief for him’

AN: How did Madoff say life in prison changed him?

RB: He never talked about it. He once described himself as feeling numb. I said, “I can’t imagine what it would be like.” He replied, “You don’t want to know, you don’t want to know.”

In some ways, I think being in prison was a great relief for him. Running a half-century Ponzi has got to be exhausting. In prison, he’d typically wake up in his cell at around 4 a.m., make coffee in bed with an instant hot water machine, then read, or listen to NPR until breakfast. He worked in the kitchen, then the laundry room and then oversaw the inmates’ computer room.

That last job cracked me up because he told me he could barely turn a computer on in his office, which should have been a red flag to everyone at the company that he wasn’t actually trading stocks.

AN: You write that he was seeing a therapist in prison. Do we know often this was, or for how long it lasted? Did it seem to be helping him?

RB: He ended one phone chat abruptly because he had to get to one of his weekly appointments with his psychologist. When he called me afterwards, I asked how it went. He laughed and said it was helpful, that she was a “terrific lady” and that he thinks he should have done therapy years before. But even if the sessions were helpful, he said he never found the answers he sought about why he did the fraud and why he hurt so many people.

NEW YORK – MARCH 12: Financier Bernard Madoff passes the gathered press as he arrives at Manhattan Federal court on March 12, 2009 in New York City. Madoff was expected to plead guilty to all 11 felony charges brought by prosecutors on financial misdoings, and could end up with a sentence of 150 years in prison.

Chris Hondros | Getty Images

He was disturbed by press reports that called him a sociopath. He said he asked his therapist, “Am I a sociopath? A lot of clients were friends and family — how could I do this?” Bernie claims that she told him that people have the ability to compartmentalize, like mobsters that kill and then go home and hold their kids.

You just put it out of your mind. I asked if she came up with a diagnosis. He said, no, just a compartmentalizer. Maybe she told him that to make him feel better since he wasn’t ever getting out.

AN: For so many years, it sounded like Madoff was just waiting to be caught. Is that right? Did he always know he wouldn’t be able to get away with this? What was living in that suspended state like for him?

RB: Bernie said he was under constant stress over the Ponzi, and would talk out loud to himself sometimes in the office, because of the pressure. One of his biggest outlets for relieving the stress was sitting in dark theaters with his wife Ruth, he said, watching movies twice a week. He also said he deluded himself into thinking some “miracle” would come along to bail him out of the Ponzi, but that he knew for at least the last decade before his arrest that he’d never get out from under it.

The only time he truly relaxed, he said, was on weekends when he was out on his yacht. I interviewed a former FBI behavioral analysis expert who suggested Bernie felt safe on the boat because he could see 360 degrees around him, all the way to the horizon, so he’d have a lot of forewarning that a threat was coming.

‘Not a single investor’ had complained to the SEC

AN: You paint a really interesting portrait of the figure of Irving Picard, an 83-year-old court-appointed trustee, who has spent years trying to get money back for Madoff’s investors. Has this been Picard’s only job over the years? Why has he made this his life mission?

RB: Picard rarely talks with the press. I was just chatting with John Moscow, a former chief white-collar crimes prosecutor for the Manhattan DA’s office who worked on some Madoff cases for the trustee. He said: “Irving is a very faithful public servant.” He’s laser focused on his task. John’s words were: “He’s not manic about it, but he’s very close.”

Disgraced investor Bernie Madoff dies in prison at age 82

In my book, I quote a former federal prosecutor saying that you can probe this case for 50 years and still not get to all the truths, but Picard isn’t interested in that. It’s been his only bankruptcy case since four days after Bernie’s arrest in 2008. He is ferocious towards net winners who won’t return funds, but he can be a soft teddy bear with those who don’t have the money for him to claw back. He may let them pay it over time, or he’ll take someone’s house but leave them a life interest in it.

AN: What do you think people get most wrong about Madoff?

RB: A lot of people who lost money get it wrong by blaming him entirely, rather than looking in the mirror and asking themselves how they could have put themselves in such danger. Madoff’s consistent and high returns were simply not possible. Even so, many net losers think the government owes them because the SEC didn’t capture Bernie. But that agency’s mandate has never been to protect people from stupid investment decisions.

Financier Bernard Madoff arrives at Manhattan Federal court on March 12, 2009 in New York City. Madoff is scheduled to enter a guilty plea on 11 felony counts which under federal law can result in a sentence of about 150 years. (Photo by Stephen Chernin/Getty Images)

Stephen Chernin | Getty Images

I mentioned to you that I went to a prison back in the ’90s to visit the guy who had the longest-running Ponzi prior to Madoff’s arrest. Just like Bernie, that swindler could not have done it without a big bank’s complicity. In that case — an 11-year-long Ponzi — an investor reached out to the SEC to complain that he’d lost money even though he’d been guaranteed a preposterous 20-25% return. The scamster was arrested the following day.

In Bernie’s case, not a single investor over the half-century of his fraud contacted the SEC. They were too busy splashing around in the gravy.

Personal Finance

Disability advocates sue Social Security and DOGE to stop service cuts

Published

7 minutes ago

April 3, 2025

Business Finance News

A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025.

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14.

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

Fiserv CEO on the nomination to Social Security Commisioner role

Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person.

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

Personal Finance

Amid trade turmoil, ‘you do not want to time the market’

Published

4 hours ago

April 3, 2025

Business Finance News

Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market.

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.

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Personal Finance

How to file for a free tax extension if you can’t make April 15 deadline

Published

5 hours ago

April 3, 2025

Business Finance News

Galina Zhigalova | Moment | Getty Images

If you can’t file your taxes by the April 15 deadline, there’s a free, easy way to submit a federal tax extension online, experts say.

Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.

As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.

Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file.

However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.

But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.

“It’s an extension to file, not an extension to pay.”

After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.

That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.

But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.

You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.

The ‘easiest way’ to file an extension

There are a few free options to file a tax extension.

For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.

The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.

IRS Direct Pay

Internal Revenue Service

Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.

For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.