Tuesday, Bernie Madoff gave his first interview since being sentenced to 72 years in prison.
Joseph Cotchett and his colleague Nancy Fineman, lawyers for a San Francisco-area teacher whose family lost more than $6 million of their trust fund, met with Madoff for more than four hours at the medium security prison in Butner, N.C., where Madoff will presumably spend the rest of his life.
Now, Cotchett is making the interview rounds, recounting what Madoff told him.
All of the headlines about this interview read basically the same way, that Madoff was surprised at how long he got away with his scam. The gist of the stories is Madoff himself knew that his plan was not all that well-run and he expected to be busted for years and that when he was outed, he would most likely go to jail for life.
Crotchet told The Wall Street Journal’s Law Blog that Madoff said he got away with his scheme because many people were simply making too much money off of their investments with him and therefore looked the other way and did not investigate.
But Madoff, who was flanked by one of his lawyers, Mauro Wolfe, did tell Cotchett that his scheme was “pretty open and straightforward, and he hid everything but hid it in an inept way,” he says. Madoff told him, in essence, that “you didn’t have to be a rocket scientist to figure out what was going on. What happened here was when you’re getting the kinds of returns [Madoff reported to clients], you might have a tendency to look the other way rather than asking questions.” Cotchett added that “it’s clear from the details that he gave us that there were many people here who were negligent and not doing due diligence.”
Madoff gave the interview because he wants to in some way make amends, according to the Law Blog.
“He obviously wanted to speak with us because in his opinion, certain members of his family knew nothing about it, had no involvement of it,” Cotchett told ABC. “He cares about Ruth.”
Madoff’s lawyer, Wolfe, told the Law Blog that the interview was another way his client was trying to help victims recover from the fraud. He declined to say whether he would grant further interviews or which lawyers had put in requests for an interview. Needless to say, the Law Blog made its first interview request on Dec. 11, 2008.
ABC News, which also spoke with Crotchet, elucidated that a bit. Bernie might care about Ruth, but he could do without his sons, according to their interview:
He cares about Ruth," said Cotchett, "but he doesn’t give a —- about his two sons, Mark and Andrew." The sons have not spoken with their father or mother since Madoff’s arrest on December 11. They say there were unaware of the fraud scheme until he confessed to them as his money was running out and it appeared the crime would be exposed.
Cotchett said he did not yet know if he would name Ruth or the sons in the lawsuit, but that he was almost certain to name Madoff’s brother, Peter, who served as the firm’s chief compliance officer.
The San Francisco Chronicle, in the hometown of Theresa Ryan, the middle school teacher that Crotchet is representing, summarized the basic information that Crotchet found out (I am not sure from the Chronicle’s story whether the paper spoke with Crotchet.)
How did Madoff fool so many people for so long? "He said he did it essentially with a lot of smoke and mirrors," Cotchett said. "No one bothered to ask simple questions. People foolishly – including accountants and regulators – never looked in the right places."
Did he ever think he would get caught? "Not initially," Cotchett reported. "But he knew, going into the year 2000, that it was just a question of time before the market turned around. And by 2008, he knew it was all over."
What led him to turn himself in? When he essentially ran out of money, Cotchett said Madoff told him. "There were too many redemptions. He didn’t have enough money to cover the redemptions," Cotchett said.
Does he think he got a fair sentence? Madoff said he knew he was going to get a tough sentence, that he was the poster child for Wall Street and that it wasn’t going to be the 12 years his lawyer had called for. "So what’s the difference, at age 71, if it was 30 years or 150 years," Madoff told Cotchett. "He knew when he gave himself up that he’d spend the rest of his life in prison."
One mark of the changed circumstances of a man for whom the world had been a pearl-filled oyster: Under prison regulations, the only things the lawyers could bring in for Madoff were paper, pencils and two $10 rolls of quarters, the latter for the vending machine.