It was the day after Bernie Madoff was arrested, and the phones at his Midtown Manhattan office were ringing non-stop. That morning, on December 12th 2008, it seemed like everyone who had ever put money into Bernard L. Madoff Investment Securities was now calling in desperation to liquidate their accounts. It was carnage up on the 19th floor, where sobbing investors bombarded the phones, begging for help, and sending in so many faxes that office staff had to replace the machines’ ink cartridges mid-call. It got so bad that Eleanor Squillari, Madoff’s secretary, organised a rota with her assistants to do twenty minutes on the phones so that in between shifts she would have time to dash to the bathroom and vomit from stress.

Madoff in his heyday on his investment company&#8217;s famous 19th floor


This frantic scene is just one of the stomach-churning moments from Jim Campbell’s new book, 

Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History

. Campbell is an American business radio show host who extensively interviewed Madoff, or Inmate 61727054, from prison in North Carolina. It is a gripping account, and unmatchable now that Madoff has passed away aged 82, just two weeks before Campbell’s book was published this April. He was 12 years into his 150-year prison sentence.

The scale of Madoff’s criminal operation beggars belief, and this book does an excellent job of reminding you of the lives he ruined. There were 16,000 American investors in Madoff’s wealth management operation, which was a multi-billion-dollar Ponzi scheme, in addition to around 720,000 international investors. The size of the fraud, according to prosecutors, was estimated to be $64.8 billion. And it may have gone on, by Campbell’s reckoning, for as many as 40 years.

"It was carnage up on the 19th floor, where sobbing investors bombarded the phones, begging for help..."

The raid on Madoff’s offices back in 2008 may have put an end to the fraud but the misery of his clients had barely begun, as it must have dawned on Squillari when the phones kept ringing. René-Thierry Magon de la Villehuchet, a French investor who put more than a billion dollars into Madoff’s scheme, died by suicide, as did William Foxton, a British soldier who lost his family’s savings. It was a Wall Street fraud but also an affinity crime, as Madoff targeted families and charities from the Jewish community to which he belonged. Elie Wiesel, the Holocaust survivor and author, lost $15m of his foundation’s money, as well as his own life savings, thanks to Madoff.

Andrew Madoff, before his death from cancer, said: &#8220;He killed my brother, Mark, quickly; and he’s killing me slowly.”


The scandal also hit closer to home. Two years to the day after they turned their father into the authorities, Mark Madoff, Bernie’s oldest son, died by suicide. Six years later, Andrew, his younger brother, died of lymphoma. Andrew, before his death, tells Campbell: “He killed my brother, Mark, quickly; and he’s killing me slowly.”

Campbell’s account of the Madoff saga lays bare the failings of Wall Street in stopping this fraud so big it should have been visible from space. Whistleblowers, tipsters, and journalists who sounded the alarm about Madoff were ignored for years — despite it being painfully obvious that something was amiss. One investor who met Madoff back in 1999 wondered how he was able to promise such unrivalled returns while refusing to charge the typical hedge fund fees of “two and twenty”, referring to two percent of assets under management and 20 percent of the gains. This would form part of one of the 

 complaints filed to the Securities and Exchanges Commission (SEC) about Madoff over a 14-year period that amounted to nothing. Six!

Madoff&#8217;s former beach house in Montauk — just one of the many baubles in his fallen empire


How did he get away with it for so long? Ponzi schemes are doomed to fail — to quote Thatcher: at some point you’re going to run out of other people’s money. Campbell presents some convincing reasons. Greed makes for an excellent blindfold — for investors, the returns were just too good, plus dealing with Madoff came without the “two and twenty” that his competitors demanded. The fecklessness of the SEC certainly helped. But something that makes for fascinating reading in

 is how ruthlessly the Ponzi scheme was managed.

"The thing about Ponzi schemes is that, at some point, you run out of other people's money..."

Madoff kept the wealth management team in their own office on the 17th floor of his building, separate to the much cleaner market-making operation on the 19th floor. The 17th floor was so private that even his sons, who worked at the firm, didn’t have keycard access. On the 19th floor, Ivy Leaguers and business school graduates strolled the corridors. Two floors below, Madoff employed what Campbell tactfully calls “lower-calibre systems talent”. Here’s an example of what he means. One of Madoff’s 17th floor employees who had a 40-year career on Wall Street, later testified that she did not know what the Dow Jones Industrial Average was. (Whether I know what the Dow Jones Industrial Average is is another matter, but then again, I’m not handling billions of dollars of other people’s money).

Bizarrely, and cruelly, Madoff also favoured staff who had come from abusive families and marriages, which he hoped would make them easier to manipulate. What he wanted, Campbell tells us, was a workforce who would not ask questions when ordered to backdate trading documents or forge clients’ financial statements. Nobody except Madoff knew the full picture, and those who smelled a rat were rewarded with enormous salaries to keep them sweet. But you get what you pay for. Computer staff tasked with designing software to fool investors and regulators had goonishly labelled one of programmes “use for SEC audits”.

What a crash back down to earth it was for Madoff when this was all revealed. He once oversaw a pile of money equivalent to the GDP of the 55th largest country in the world. He had a penthouse on the Upper East Side, a weekend home in Montauk, a winter getaway in Palm Beach, a summer house in Cap D’Antibes, a yacht, an art collection, and the admiration of the financial world. The details of his re-entry into Earth’s atmosphere from the lofty heights of billionairedom are reminiscent of 

, Tom Wolfe’s epic tale of Wall Street undoing. On the day of his arrest, Madoff was worried about having to be perp-walked out of his office in front of his sons and staff – much like Sherman McCoy, the fictional master of the universe, stumbling through his arrest, worried that his tweed suit trousers don’t fit him well enough.

"Madoff favoured staff who had come from abusive families, which would make them easier to manipulate..."

Was Madoff sorry? Regretful, perhaps, but eager to place blame on the other funds that fed his Ponzi scheme, and the zombie army of greedy investors groaning for returns. It is a terrible irony of his career — and a bitter twist to all those lives wrecked by Madoff’s scheme — that he had built a successful market-making enterprise before he turned to crime. He would have been worth billions without the Ponzi scheme. Wouldn’t that have been enough?

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