Personal Finance
Richard Behar exchanged emails with Bernie Madoff for a decade
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.”
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.
Sdi Productions | E+ | Getty Images
The U.S. job market has undergone a dramatic transformation in recent years, from one characterized by record levels of employee turnover to one in which there is little churn.
In short, the “great resignation” of 2021 and 2022 has morphed into what some labor economists call the “great stay,” a job market with low levels of hiring, quits and layoffs.
“The turbulence of the pandemic-era labor market is increasingly in the rearview mirror,” said Julia Pollak, chief economist at ZipRecruiter.
How the job market has changed
Employers clamored to hire as the U.S. economy reopened from its Covid-fueled lull. Job openings rose to historic levels, unemployment fell to its lowest point since the late 1960s and wages grew at their fastest pace in decades as businesses competed for talent.
More than 50 million workers quit their jobs in 2022, breaking a record set just the year prior, attracted by better and ample job opportunities elsewhere.
The labor market has gradually cooled, however.
The quits rate is “below what it was prior to the start of the pandemic, after reaching a feverish peak in 2022,” said Allison Shrivastava, an economist at job site Indeed.
Hiring has slowed to its lowest rate since 2013, excluding the early days of the pandemic. Yet, layoffs are still low by historical standards.
This dynamic — more people stay in their jobs amid low layoffs and unemployment — “point to employers holding on to their workforce along with more employees staying in their current jobs,” Shrivastava said.
Big causes for the great stay
Employer “scarring” is a primary driver of the so-called great stay, ZipRecruiter’s Pollak said.
Businesses are loath to lay off workers now after struggling to hire and retain workers just a few years ago.
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But job openings have declined, reducing the number of quits, which is a barometer of worker confidence in being able to find a new gig. This dynamic is largely due to another factor: the U.S. Federal Reserve’s campaign between early 2022 and mid-2023 to raise interest rates to tame high inflation, Pollak said.
It became more expensive to borrow, leading businesses to pull back on expansion and new ventures, and in turn, reduce hiring, she said. The Fed started cutting interest rates in September, but signaled after its latest rate cut on Wednesday that it would move slower to reduce rates than previously forecast.
Overall, dynamics suggest a “stabilizing labor market, though one still shaped by the lessons of recent shocks,” said Indeed’s Shrivastava.
The great stay means Americans with a job have “unprecedented job security,” Pollak said.
But those looking for a job — including new college graduates and workers dissatisfied with their current role — will likely have a tough time finding a gig, Pollak said. She recommends they widen their search and perhaps try to learn new skills.
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