Bernie Madoff Says Investors' Losses "Nothing" Compared to Pain He Feels From Death of Two Sons
"The fact that I was trying to protect our family by sheltering them from any knowledge or involvement in my wrongdoing still fails to allow me to forgive myself," the man behind what's believed to be the largest financial fraud in history told NBC News.
Bernie Madoff says the damage he caused investors, including several Hollywood figures, over the course of his 20-year, $50 billion Ponzi scheme is "nothing" compared to the pain he feels from the loss of his two sons, both of whom have died.
"As difficult as it is for me to live with the pain I have inflicted on so many, there is nothing to compare with the degree of pain I endure with the loss of my son's Mark and Andy," Madoff said in an email sent to NBC News. "I live with the knowledge that they never forgave me for betraying their love and trust. As much as I tried to reach out to them in an attempt to explain the circumstances that caused my betrayal they could not find it possible to forgive me. I do understand their unwillingness. The fact that I was trying to protect our family by sheltering them from any knowledge or involvement in my wrongdoing still fails to allow me to forgive myself."
Madoff, who's currently serving a 150-year sentence for bilking thousands of people out of roughly $20 billion, lost his son Mark in 2010, when he committed suicide on the second anniversary of his father's arrest. And the elder Madoff lost his other son Andrew in September, when he died after a battle with cancer.
In his email, Madoff said he's still working to protect his sons' legacies, saying he'll continue to work to discredit "the baseless and vindictive comments" from the media and Irving Picard, the trustee representing victims of Madoff's fraud.
Madoff goes on to refute several of Picard's claims about whether his sons knew about his Ponzi scheme.
Madoff's victims included several members of the entertainment industry, including Kyra Sedgwick and Kevin Bacon, Steven Spielberg, Jeffrey Katzenberg and screenwriter Eric Roth.
Read Madoff's full email below:
As difficult as it is for me to live with the pain I have inflicted on so many, there is nothing to compare with the degree of pain I endure with the loss of my son's Mark and Andy. I live with the knowledge that they never forgave me for betraying their love and trust. As much as I tried to reach out to them in an attempt to explain the circumstances that caused my betrayal they could not find it possible to forgive me. I do understand their unwillingness. The fact that I was trying to protect our family by sheltering them from any knowledge or involvement in my wrong doing still fails to allow me to forgive myself.
What is still my most important goal is to do everything in my power to protect their legacy, Although neither of my son's were ever charged with anything. They were subjected to the completely false and slanderous claims and remarks of the Trustee and the media . It is because of this that I ask you to understand why I will never cease working to correct this situation by discrediting the baseless and vindictive comments of the above parties.
The Trustee claimed that my sons should have known that I was not executing any trades for my advisory clients. I have gone to great lengths to counter this claim by explaining that like all brokerage firms, we were required to have "Chinese Walls "in place to avoid any conflict of interest between our different departments like the market making that Mark managed and the proprietary trading department that Andy managed from the investment advisory department managed by me. These department were separated by two floors and staffed with entirely different personnel. These "Chinese Walls' procedures were subject to bi-annual surprise inspections by the regulators.
The Trustee claimed that my sons should have known that their compensation was unrealistic. The fact that both were compensated at the same rate as the one hundred traders that they managed, a rate of 25% of their trading profits, which is industry standard for market making and proprietary trading firms similar to Madoff, seemed to escape the Trustee's consideration.
The Trustee also claimed that my sons compensation in their "Deferred Compensation" account was excessive. This even though their compensation was based at the same rate as all my other employee's "Deferred Compensation" accounts, 25% or at the rate of the firm's annual return on capital. Deferred Compensation type accounts are common on Wall street and subject to specific IRS rulings.
The Trustee made the absurd claim that our market making and Proprietary trading departments were never profitable. This in spite of the fact that the Trustee hired Lazard & company to evaluate the profitability of these departments ,and found both to be profitable. Not surprisingly the Trustee failed to disclose Lazard's findings, which would have completely contradicted his owns senseless claims. I should add that the industry regularily publishes the average annual returns on capital of Specialist and Market Making firms at 35%.
The Trustee claimed that Andy had sent an incriminating e-mail to Mark during the SEC examination that said "Spoke to dad and he checked with Bonventre and everything is in balance". The fact that my son's responsibilities as managers of their trading departments is to reconcile their traders daily inventory positions with our operations department director Dan Bonventre.Somehow seemed strange to the Trustee. Can you imagine this conclusion?
I won't even comment on the Trustee's claim that my son had reviewed our e-mails for possible incriminating evidence about my advisory business, other than to state that neither I nor anyone in the Advisory side ever was issued an e-mail address.
Finally as to my son's loans. All these loans were drawn up by an outside tax attorney and filed with the IRS as required. These loans were interest baring loans with maturity dates not yet due at the time of my arrest. Any loans that had been due in the past had in fact been paid off.
In conclusion I would remind everyone that the Trustee's civil litigation against my son's as directors of Madoff Securities International in London was not only DISMISSED, the judge lambasted the trustee for his baseless claims and unnecessary harassment of my son's.
I do realize that much of this has been told to you in the past. Certainly all of the facts I have presented can be easily verified by examining the same documents that were available to the Trustee. I appreciate your understanding of it's importance to me and my family.