‘A REVERSE ROBIN HOOD’
Greenwich author builds on 400 pages of correspondence with Bernie Madoff for new book
The author
Jim Campbell can be heard on WGCH radio and Business Talk Radio Network, where he is the host of the nationally syndicated radio show “Business Talk with Jim Campbell” and the crime show “Forensic Talk with Jim Campbell.”
GREENWICH — The name Bernie Madoff will forever be linked to the massive financial fraud that robbed investors of billions, left people destitute and rocked an industry to its core.
Now a new book about the shocking Ponzi scheme contains information from unprecedented access to Madoff ’s family, his attorney and, especially, the man himself.
“Madoff Talks” will be released Tuesday. Its author, Old Greenwich resident Jim Campbell, said he wanted to write the definitive book about the scheme and the man responsible for it.
“He was a fascinating, complex character,” Campbell said in an interview from his home last week. “He was building a criminal business and a legitimate business side by side from day one. The same individual did this. He built one of the most ethical businesses and the biggest criminal enterprise.”
Campbell and Madoff corresponded for eight years, exchanging communications that total hundreds of handwritten pages and emails between 2011 to 2019.
Once one of the most respected names on Wall Street, Madoff pulled off one of the biggest financial frauds in history totaling, at its end, nearly $65 billion.
Madoff was sentenced to 150 years in prison in 2009 after pleading guilty to crimes ranging from securities fraud to money laundering to theft from an employee benefit plan. He died in prison on April 14, just days away from his April 29 birthday, when he would have turned 83.
Campbell described Madoff as a man who was a master at compartmentalizing, with a sure hand at knowing who to hire for both his legitimate operations and his criminal ones.
Through their correspondence, Campbell said, he found a man desperate to defend himself.
“The easy answer was he was a complete sociopath, but it was more nuanced than that,” Campbell said. “Obviously, he was a huge narcissist. He could not psychically deal with a loss of any kind, which was
completely crazy on Wall Street.
“He views himself as a complete people-pleaser and rather than say he wiped someone out, what he felt deep inside himself is that his clients were greedy and were pressuring him nonstop. ‘All they wanted was returns, returns, returns. I was under pressure to deliver.’ ”
Campbell never met Madoff face to face, although the two corresponded at length. But his book is packed with firsthand information he received from Madoff and, after the criminal mastermind agreed to waive attorney/client privilege, from Madoff ’s lawyer.
The idea, Campbell said, was to look broadly at what happened and why.
“I wanted to look at the complete systemic failure,” Campbell said. “The SEC missed this scheme on five different investigations. … The feeder funds were completely corrupt. The bank was unwittingly complicit. His staff on the 17th floor did all the dirty work for 40 years without figuring out — ever — that it was a Ponzi scheme. My feeling was that very few people knew the whole story and how it fit together and how the victims were failed at every turn.”
Defying the stock market
At its core, Campbell said, Madoff ’s fraudulent investments were designed to mirror the stock market, yet they defied stock market reality by continually going up. It was Madoff ’s reputation for returns on investments that made people so eager to give them their money, Campbell said.
Madoff ’s reputation — and the exhilaration about supposed endless returns — was so strong that no one listened when financial analyst Harry Markopolos in 1999 said five minutes of calculation have could shown that the level of financial performance by Madoff ’s supposed investments was just not possible, Campbell said.
During the time he was taking money from one fund to pay off another, Madoff was running his legitimate business and acting entirely proper, Campbell said.
“He had tremendous credibility among the regulators because he ran his legitimate business clean,” Campbell said. “He helped build the NASDAQ. He was chairman of it. He had enormous credibility and deservedly so because of his legitimate business. … It was a perfect scheme because he had a good image. He never
showed losses.”
Campbell said Madoff was able to get away with his dual business identity because of what he described as “silos” set up within the Securities and Exchange Commission that kept investigators from sharing information and working together. Campbell also outlines what he considered incompetency within the SEC — especially after no one listened to Markopolos’ warnings.
The fraudulent operations on the 17th floor of Madoff ’s offices were under lock and key. Not even his family knew what went on there, Campbell said.
The heart of Madoff ’s scheme was fluidity — it required money to be constantly in play, not only for Madoff to personally profit but to pay investors back so that more people would keep pumping in money.
“I call it a reverse Robin Hood,” Campbell said. “You put a little money in and you’ve got several hundred thousand dollars and you’re not a high net worth guy. He took their money and gave it to his biggest investors who were really wealthy. He gave them a higher phony rate of return than the phony rate of return to average guys. He had to just keep having more money coming in on
both sides.”
Campbell said the belief was that the scheme was far too complex to crack. But he said, “It could be solved in under five minutes in several different ways and yet it went on for 40 years.”
Access to Madoff
For the book, Campbell also talked to victims of the schemes and to traders who worked for Madoff ’s legitimate business. But it was his access to Madoff, his attorney and his family that makes the book so complete, he said.
His connection with the Madoff family came about, Campbell said, through “a matter of fortuitous luck.”
He had been doing an interview for his radio show with Laurie Sandell, author of the 2011 book “Truth and Consequences: Life Inside the Madoff Family,” which at the time had been the only book that the family had authorized.
While preparing for the interview, Campbell said Sandell offered him the chance to speak off the record to Madoff ’s son Andrew, a former Greenwich resident. It was a chance that Campbell jumped at.
Campbell said he was “blown away by how straight-forward he was and how he was willing to take any question I asked.”
At that time, Madoff ’s wife, Ruth, was moving to Old Greenwich and Campbell offered to take her to lunch, which Andrew arranged.
“We had instant chemistry at that lunch,” he said. “Bernie then sent me a letter saying that he wanted me to help him dispel all the myths and straighten this out.”
That introduction led to 400 pages of communication with the disgraced investor from prison, and Campbell said he knew he had a book to write.
One of the challenges, Campbell said, was tracking down what was fact and what was fantasy.
“I had to go vet every word Bernie said,” Campbell said. “I had to seek out the truth.”
For Campbell, it boiled down to an “exhaustive search” — speaking with people with knowledge of the case and who worked inside Madoff ’s company. He looked through 15,000 pages of testimony and evidence from others charged in the scheme and read the SEC inspector general report released in the aftermath of the fraud’s collapse.
He also relied on information he had gotten earlier from Ruth Madoff — who did not cooperate with the book once he started writing it — and Andrew Madoff.
That research, Campbell said, led him to believe that Ruth Madoff and her sons, Andrew, who died in 2014 of lymphoma, and Mark Madoff, who died by suicide in 2010 on the two-year-anniversary of his father’s arrest, were not personally involved in the frauds.
Much of what Madoff told him was not true, Campbell said. In all of their discussions, Madoff remained in denial about the damage he had done and insisted on justifying his actions.
The two sons reportedly never spoke a single word to their father after he confessed to them about the Ponzi scheme, Campbell said.
“To be blunt, he killed both sons and Andy viewed it that way,” Campbell said. “He said, ‘He killed Mark fast and he’s killing me slowly.’”