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Every scandal begins with a lie. But the truth will come out. And then comes the fallout and the outrage.
Scandals have shaped America since its founding. From business and politics to sports and society, we look on aghast as corruption, deceit and ambition bring down heroes and celebrities, politicians and moguls. And when the dust finally settles, we’re left to wonder: how did this happen? Where did they trip up, and who is to blame? From the creators of American History Tellers, Business Wars and Tides of History comes American Scandal, where we take you deep into the heart of America’s dark side to look at what drives someone to break the rules and what happens when they’re caught. Hosted by Lindsay Graham.
Tue, 02 Mar 2021 10:00
The U.S. economy begins to fall apart. So Bernie Madoff takes a risk, and makes a fateful decision about his Ponzi scheme.
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It's September 15th, 2008, on a small peninsula in the south of France. Today, the Mediterranean Sea is a bright, bright blue, often the distance waves crash against the rocky shore. It's a picturesque setting, and one of Bernie Madoff's favorite places in the world. That's why he's here now, lying in the sun. Madoff sinks lower into his wicker chair and smiles as he traces the curves of a cloud. For Madoff, this trip couldn't have come soon enough. He desperately needed to get away from New York, and the nightmare he's been living through. All across the country, homeowners are defaulting on their mortgages, and that's causing stocks to tumble. The global economy has entered something like a death spiral with people calling it the great recession. The collapse has been especially disastrous for Bernie Madoff because his clients keep demanding to pull their money out of the stock market. But there's a problem. That money isn't actually invested in stocks. Instead, Madoff has been using his clients money to pay his other clients. He's merely shifting money around from one account to the other to make it look like his clients are profiting from actual stock. That's the heart of his Ponzi scheme. But with the economic collapse, it's getting harder and harder to keep the scheme going. He's running out of money. Which is why Madoff is here today in his home on the French Riviera. He's with his wife and friends, and he's hoping to clear his head and to figure out how to get himself out of this mess. Out on the porch, Madoff leans forward and grabs a bottle of champagne from a bucket of ice. He then corks a bottle and fills three glasses. Let's drink up and enjoy ourselves. Madoff hands out the glasses, and his friend raises his in a toast. Well, cheers everyone to a year that can't get any worse. Amen to that, but you know, we're here in the most beautiful place in the world, so how about this? Today, let's talk about something else. Anything else other than stocks and money. Something else? What else is there besides stocks and money? I don't know, maybe books, movies, or any. The rest of us, we go to the movies because we're not living the dream like you are. That's where we get our fantasies. Well, I promise, my life isn't the fantasy you think it is. Oh, you have too much money, huh? Look, if you have to give away, I don't know, ten, maybe twenty million dollars, you know where to find me. The group laughs and Madoff forces himself to smile. He knows he has to keep up appearances, even though he's feeling a terrible language. Madoff is about to change the topic when there's a chime on his friend's phone. When the man looks at the screen, all of a sudden his face goes pale. Madoff sits down his champagne. What is it? It's nothing. Oh, he hits not nothing. You look like it's our ghost. What is it? You said you didn't want to talk about business. Well, I didn't then, but I do now. What is going on? Bernie, you got a TV? It sounds like it's all over the news. Madoff's heart begins to race. He can't take any more bad news. He needed a break from the constant threat that his business would collapse, but he'd be exposed as a fraud. What he knows, he can't hide from the truth forever. And so Madoff, his wife and their friends, set down their glasses and head inside. Madoff grabs remote and turns on the TV to the American channels. And right away, he sees the headlines. You know what, right now, breaking news here, stocks all around the world are tanking because of the crisis on Wall Street. This is absolutely stunning. Wall Street has seen very, very few days like this. The mortgage crisis has now taken down two of the biggest names, the most storied names on Wall Street. One of them, Lehman Brothers, right behind me. Madoff stands frozen in place. Lehman Brothers is one of the largest investment banks in the world. And now it's filing for bankruptcy? It's unimaginable and terrifying because if Lehman is going down, people are going to panic even worse than they already are. And that means they're going to start selling. And if they start selling, Madoff's clients are going to demand even more of their money back. Money he doesn't have. Madoff shuts off the TV and pauses for a moment thinking. Money makes up his mind. He strides to the bedroom and begins packing his clothes. The vacation is over. It's time to get back to New York because if he doesn't stop the bleeding now, his business and his life will be ruined. If you're into true crime, the Generation Y podcast is essential listening. We started this podcast over 10 years ago to dissect some of the craziest and most notable murders, crimes and conspiracy theories together and we'd love for you to join us. Follow the Generation Y podcast on Amazon Music or wherever you listen to podcasts. From Wondery, I'm Lindsey Graham and this is American Scandal. Beginning in the late 1990s, Bernie Madoff's investment business came under close scrutiny. The federal government received reports that Madoff could be the mastermind of an enormous fraud. Soon, officials began to investigate those allegations. But when the investigation was over, the Securities and Exchange Commission cleared Madoff of any wrongdoing. It was a huge relief for the legendary financier. But Madoff's troubles wouldn't be over. He continued to dig himself into a deeper hole as his Ponzi scheme grew larger and in 2008, as the stock market crashed, Madoff faced his biggest test. This is Episode 3. Collapse. It's September 23rd, 2008 and just over a week since Lehman Brothers filed for bankruptcy. Today, Frank Deepas Galley is standing outside Bernie Madoff's office in Manhattan and bracing for what sure could be a painful meeting. Deepas Galley has more bad news for Madoff in a year when bad news seems to be the only news around. A few days ago, Wall Street was shocked yet again when words spread that the insurance giant AIG was on the verge of collapse. The federal government rushed to bail out the company in an effort to save the economy, but that didn't stop investors from panicking. Since then, Frank Deepas Galley has gotten a flood of phone calls from clients who are scared. They want to cash out, get back their money. But Deepas Galley knows there's a big problem. For years, he and Madoff have been running a Ponzi scheme and they are almost out of cash. As Deepas Galley waits to meet with Madoff, he knows there's no way to sugarcoat it. He has to be honest with his boss. Their firm is about to fall apart. It might be time to finally come clean to save themselves before it's too late. The office door opens and Madoff greets Deepas Galley. Deepas Galley enters and for a minute, the two chat about the latest dire headlines coming out of Wall Street. When Deepas Galley shares an update with Madoff, he's been hustling like a madman, bringing in lots of clients and he's impressing them with fake financial reports. He's gotten their money, but it's not enough. Madoff raises his eyebrows and asks Deepas Galley to explain himself. And so he does. Deepas Galley says that their investors are demanding several hundred million dollars. And if one more investor wants to cash out, they'll be ruined. Madoff nods, then approaches Deepas Galley. He reaches out and tightens Deepas Galley's time. That's better, he says, and steps back. Then Madoff explains that they have another meeting with a client coming up. They'll get the money, they'll be fine, but Deepas Galley needs to sharpen up. Deepas Galley begins to stammer. For decades, he's dedicated his life to Bernie Madoff. Growing up, he was a poor boy from Queens, but now he's risen to become Madoff's right hand man. Deepas Galley has done well for himself, and the two are as close as it gets. But Deepas Galley doesn't know what to make of this. How is it possible that Madoff is so unwilling to confront the truth? Deepas Galley knows it's time to push back. So he tells Madoff that this is insane. It's time to throw in the towel. But Madoff gives Deepas Galley an icy look. And in a brusque tone, he says it's very far from that time. Their work must continue. Deepas Galley hoped it wouldn't come to this, but it has. And so he tells Madoff that he's considering taking steps to protect himself. He's unwilling to go down with the rest of the ship. Madoff casts another icy stare, and quietly he reminds Deepas Galley what the two of them have known for a long time. It's too late now. Either they stay afloat, or they sink, together. Madoff checks his watch. And then all at once, Deepas Galley notices something bizarre. Madoff's face begins to shift. Gone is the menacing stare. Madoff now looks warm, compassionate. He's smiling and seems easy and approachable. He then claps Deepas Galley on the shoulder, and he says it's time for their next meeting. He can find some new money. A month later, Bernie Madoff hangs up the phone and closes his eyes. He lets himself sink into his office chair as a throbbing pain begins to pierce his forehead. For the last month, Madoff hasn't stopped working one moment. He's barely slept, but all the meetings, all the long nights, they looked like they were going to pay off. He managed to claw together $200 million. He was going to use that money to cover his clients with draws to save the firm. And for a moment, it looked like he could survive the disaster of 2008. But then came the call this morning. One of his biggest clients said he needed to make a withdrawal. Madoff asked how much, and the client said it plainly, $1 billion. Madoff went slack. It was an impossible request. He couldn't come up with that kind of money. He was about to be ruined, and he had no idea how to save himself this time. Now with his head still throbbing, Madoff rises and walks around his office. He looks at the walls where he's hung up framed magazine covers, profiles of the great Bernie Madoff. He gazes at the photos of himself with powerful people, and then his eyes catch a photo of him and his family, his wife, his children. Everyone looks happy. Suddenly Madoff feels his throat closing up. Before he can stop himself, he begins to cry, hot tears streaming down his face. Madoff can't believe he's failed in such a spectacular fashion. When he was a boy, he promised himself he'd make the right choices, unlike his father, and made nothing but excuses for himself. He'd off wipes away a salty tear, and in a flash of nostalgia he remembers the colors of his old bedroom. Suddenly, he can smell his mother's cooking, and his father's musty clothes. He thought he was better than them. He thought he wouldn't make the same mistakes, but he was wrong. Madoff collapses back into his chair, and then he remembers something else, something Frank D. Pascalie said. Maybe it's not too late. Maybe he can protect himself. It'll take some careful planning and some clever strategizing, but Madoff knows that even now, nothing's impossible if he places cards right. It's December 10th, 2008, and about two months later. In an office lobby in Midtown, Manhattan, Andy made off unbuttoned his coat and begins pacing. This is the building where his father works, where Bernie Madoff has made millions of dollars and established himself as a titan of Wall Street. Normally, Andy made off, feels sturdy, and proud when he steps in the building, but today seems different. Right now, as he waits for his father to come downstairs, he's filled with a vague sense of dread. His father has been acting strangely, like something's wrong, but he wouldn't admit anything. So today, Andy is determined to get to the bottom of it. Andy takes a seat in a leather chair, and as he waits for his father, he begins adding up all the unusual things he's noticed these last few weeks. It began when Andy asked his father for a multi million dollar loan, so he could buy himself an apartment. At first his father chewed him out. Then not long after, Andy got a call from his father's secretary. She said that Bernie would be happy to loan Andy the money. Andy should have been thrilled, but there was something disorienting about it, the way his dad suddenly flipped. Then, earlier today, Andy got a call from his brother Mark. Mark said that their father was sending out large bonus checks to employees and friends. At first, it sounded like another act of generosity, and normally Andy wouldn't be surprised. His father gives out bonuses every year, but not now, it's December, and that bonuses usually go out in mid February. And there's something even more unusual about the whole thing. Even though he's the head of the company, Bernie himself is riding the checks. He's never done that before, and it strikes Andy as sentimental, like a final act of generosity before something bad happens. And then his father made this request. Bernie said he wanted to have lunch together, along with Andy's brother and their mother, the whole family. He said there was something he wanted to tell all of them, but he wouldn't say what it was. Andy paces in the lobby when he hears a ding. The elevator door opens and out steps Bernie made off, looking steely and determined. Beside Bernie is Andy's brother, Mark. The two approach Andy, and all at once he has an incredible urge to blur it out. His dad dying, does Bernie have cancer? But before Andy can get a word out, Bernie lays a hand on his shoulder, then steps past him and walks out of the office building. For a moment, Andy remains standing still, then he follows his father outside and into the rain. About a half hour later, Andy made off steps into the family's penthouse in Manhattan. He gazes across the marble floors in the elliptical staircase. Their family is wealthy, wealthier than almost anyone in the world. They can buy anything they want, jewelry, cars, yachts, homes. They should be happy. But as Andy locks eyes with his father, he knows that something is deeply wrong. A minute later, Andy, his brother, and his father enter the study. Andy's mother Ruth has already seated. He has a glass he looks in her eyes and is staring off into the distance. Andy begins to sweat. He's about to learn something painful, he can smell it. It's killing him, and he won't wait a second longer. So he turns to his father. Enough's enough. Dad, mom, what's going on? Bernie looks to Andy's mother. Ruth, would you please turn off the music? She grabs a remote, presses a button and the music stops. Then Bernie turns back to Andy and Mark. When boys take a seat, dad just get it out. What the hell's happening? Why are you acting like this? Or one of you dying? Andy, please. Just sit down. Andy scales. Reluctantly, he pulls out a chair, takes a seat, and waits for his father to speak. So boys, it's time to tell you some things. Look, everything is about to get very difficult for each of us. But I want to confess to you what you need to know is it's all just one big lie. Dad, what are you talking about? What's a lie? My investment advisory business. All of it. The money's gone. Gone. Gone. Dad, you've got billions of dollars moving through your company. What is this? Is this supposed to be funny? Is this a prank? Andy looks around the room, but no one's smiling. Andrew, you have to listen to me. I listen closely to what I'm telling you. It's all fake. My business is running a big Ponzi scheme and there's nothing left. Dad, what are you talking about? Ponzi scheme. There are statements working out. We've seen the trades ourselves. The money is there. Oh, yeah. Billions of dollars. Billions of dollars should be there. But those statements are a fiction. Andy feels a rage building inside him. What he's hearing can't be true. Dad, I know our firm. That's not how things work. You can't just invent numbers. You're not some kind of magician. We have real investments with real money. Andrew, you're not listening. The statements aren't real. And for a very long time, I've been lying. I've been lying to you. I've been lying to my clients. I thought what I was doing was right. But now I'm at the end. I can't fix it. So I confess to my brother, Peter. I told him I turned myself in. I'm going to do that sometime next week. But right now, my main concern is making sure that you, your brother and your mother are OK. You want to make sure that we're OK. You're going to be kidding. You've got one last chance to tell me that this is some sort of very bad joke. It's not a joke. I think your boy should talk to a lawyer. Suddenly, Andy's brother, Mark, leaps up from his chair and races out of the study. Andy doesn't think he bounds down the staircase calling after his brother. But Mark keeps running forward. Then he throws open the front door and steps into the hallway. As fast as he can, Andy sprints up to Mark and grabs him by the shoulders. He spins him around in the two stare at each other, breathing hard. Andy wants to calm him down to say everything is going to be OK. But he can't. He's not a liar. Not like his father is. He can't turn this into some kind of happy story, because the truth is nothing is going to be OK. Very likely, the police are going to get involved, the government, too, and not to mention the media. All of their lives are about to be turned upside down. And Andy knows that they can't run from their problems. Instead, they have to take the size of action. There's no saving their father. But maybe they can still save themselves. If you're into true crime, the Generation Y podcast is essential listening. We started this podcast over 10 years ago to dissect some of the craziest and most notable murders, crimes, and conspiracy theories together. And we'd love for you to join us. Generation Y is one of the longest running true crime podcasts out there. And we are still at it, unraveling a new case every week. We break down infamous cases like the Evil Genius Bank robbery and lesser known cases like the case of Kimberly Rico. Did she actually kill her husband after they took part in a murder mystery game? We cover every angle, breaking down theories, diving deep into forensic evidence, and interviewing those close to the case. And with over 450 episodes, there's a little something for every true crime listener. Follow the Generation Y podcast on Amazon Music or every listen to podcasts, or you can listen and add free by joining Wondery Plus in the Wondery app. ["Wondery App"] It's December 11, 2008, and a warm winter day in Palm Beach, Florida. A door opens in the Palm Beach Country Club, and Robert Jaffee enters with a smile. He looks around the dining room, ready to find a space that's bustling with the lunch crowd. But as Jaffee steps into the room, he can tell right away that something is off. No one's at the buffet. Games of bridge have been abandoned. The dining room is quiet. Then a piercing sound breaks the silence. A woman screaming out in agony. Jaffee's eyes dart across the dining room. And then he notices a man sobbing. Another person stumbles into the room, looking shell shocked. Jaffee hurries over to the sobbing man and asks, what's happened? The man chokes on his own words and wipes his nose on his forearm. He groans and then manages to get it out. Bernie Madoff has been arrested. They're saying he was a fraud and that the money is gone. All of it. Jaffee is stunned. This can't be true. Bernie Madoff in jail? This must be some hoax. But then someone calls out repeating the news. Madoff is locked up. He's done and the money is gone. Suddenly another man yells out. So does another. As a cacophony of voices begins to rise. Robert Jaffee's eyes dart across the room. He notices that people's faces are red with fury. Water glasses are knocked over. Men and women clutch their heads in agony. Jaffee feels like the room is spinning. Because if what they're saying is true, this club has just been hit with a devastating blow. Jaffee himself recruited a third of this club's members to be clients with Madoff and he made a fortune doing it. But if the money is gone, these people are about to lose everything. Jaffee feels dizzy as he stumbles through the room. But then he gets a sudden burst of clarity as people begin to look right at him. They point their fingers and they begin muttering. And he knows why. They're going to hold him responsible for their losses. Jaffee knows he has to act fast and get out of here. So he turns on his heels and hurries out of the dining hall. He needs to think. He needs some kind of a plan. Because if this is all true, if Madoff is locked up and facing charges and the money is gone, then Jaffee could be in deep trouble too. Several hours later, Bernie Madoff is being led down a very long corridor with a crowd of people watching him. This may be the man hat in office of the FBI. And these may be the FBI agents who've seen their share of criminals. But he also knows that today, these agents have landed a big fish and they want to stare at their catch. It all began hours ago when two agents appeared at Madoff's front door. They said they wanted to talk. It didn't take long to figure out what had happened. Madoff's sons went to the FBI just a day after he came clean about his business. Madoff had planned to turn himself in. He wanted to control the situation. And he was devastated that it was his sons that beat him to it. But Madoff made a quick decision. It was now best to tell the truth. He was bound to be caught anyway. And he knew that from this point forward, he had to appear honest. That's the only way he would ever beat the charges. So now as Madoff has led to a small room without windows, he knows he has to stick by that strategy. It's how he's going to win. Madoff enters the room and takes a seat. An FBI agent walks in beside him and handcuffs his left arm to a chair. The agent then pulls up another chair and the conversation begins. The agent asks who was involved in Madoff's scheme. Madoff allows himself to look pain for a moment. And then he says that he acted alone. He made some bad investments, it's true. And that's why he ran a Ponzi scheme. He didn't want his clients to lose any money. And he believed he could dig his way back out. The agent raises a eyebrow and asks the question again, did Madoff really run this whole billion dollar illegal operation by himself? Madoff nods. And then he says emphatically that this was his doing. He bears the responsibility. None of his family members knew about this until yesterday. The agent turns and looks at another agent standing nearby. Madoff knows that they don't believe him, not yet at least. But he knows that with time, he can convince the government that he's a decent man. That he's someone who made a mistake, but that his heart was in the right place. And that's the key. Because if Madoff can convince the FBI and even a jury that this is true, then Madoff may get a light sentence. Or like other white collar criminals, he may never have to go to prison at all. It's nearly two weeks later in Bernie Madoff's penthouse in Manhattan. Ruth Madoff, Bernie's wife, opens the fridge and grabs a carton of eggs. She then takes out a bowl and begins cracking the eggs into it. As she beats them, she looks across the kitchen and glances at the gruff middle aged man who's sitting near the doorway. He's reading a magazine and looks up to catch a gaze, but she quickly looks away and begins pouring the eggs into a pan. This man is her new security guard. She doesn't like having him here. It's uncomfortable to have a stranger in the house, but it's even worse to feel scared all the time. And that's how Ruth has felt ever since Bernie was arrested. That's when the death threats started to arrive and they haven't stopped. And even though Bernie's returned home after posting bail, everything is far from normal. And Ruth doesn't know if she'll ever get her old life back. As Ruth scrambles the eggs, her mind continues to race. She's not sure she even wants her old life back. These days, Bernie is no better than this security guard. He seems like a stranger too. More than anything, just like everyone, Ruth wants answers. She wants to know who this man, her husband, really is. Ruth enters the dining room with a plate of breakfast for Bernie. He's on the phone, talking, and signals that he'll be off in a minute. Yes, I understand. Yes, yes, okay. All right, thank you. Ruth sets down the food for Bernie and steps back. Who's that? It was business. What kind of business? It was information regarding a former client. The information regarding Bernie. Talking to me as if I'm someone from the government. What's going on? Talk to me like a person. Bernie sighs and looks away. Well, one of my investors killed himself last night. Oh my God, he felt guilty. He lost a lot of money for most of his friends. Because of me, I see. So now you know what the call was about. How does that make you feel? How do I feel? I'm fine. He's the fool. He's the one who took everything I'm blind faith. All these people, oh please, Mr. Madeoff, take my money, make me rich. No, Bernie, you lied to him. This poor man, he's the victim. Oh, come on, Ruth, everyone in this world is now a victim. You know, all these people made their choices. They have responsibility, too. It's called due diligence. And now they have to live with the consequences of their decisions. Ruth squints her eyes as she looks down at her husband. Then she pulls out a chair and sits down. And she prepares to ask a question she's been wondering for days. Bernie? Yes? Why'd you do it? Do what? The whole thing, the scam, the stealing. Why'd you do it? What were you thinking? You even care that you hurt so many people? Bernie takes a bite of his eggs and then sits his coffee. Grapes a napkin that looks down as he wipes his mouth. And he pushes out his chair and rises and without saying a word, he walks away. Ruth sits at the table resting her face against her palm. She doesn't know if she'll ever get a satisfying answer to that question. She doesn't know if anyone will figure it out. Why Bernie lied and why Bernie stole? Why he kept his secrets for so many years. But as Ruth rises, carries away Bernie's half eaten breakfast. She realizes that right now the question is moot. All that matters is what will happen in the courts. How she and her family will ever recover from Bernie's crimes. It's March 12, 2009 in a federal courthouse in downtown Manhattan. Bernie made off looks around a courtroom which is packed with people. All throughout the court, there are lawyers, journalists, and people who lost money in his Ponzi scheme. And all of them had the same look in their eyes, a look that says they're hungry to see him face justice. Made off can also feel the anticipation in the courtroom. Everyone seems eager for the big announcement which made off it's about to make. In just a few minutes, made off is going to give his plea. He faces multiple federal charges, including securities fraud, wire fraud, and money laundering. Made off knows that the penalties for these crimes are severe, he could spend the rest of his life behind bars. And he also knows that he stands no chance in a trial by jury. He already admitted his guilt to federal agents. And after his victim spoke before the court, he realized just how grim his situation was. So there's only one path to possibly save himself. So when the judge turns to made off and asks how he pleads, made off utter's one word, guilty. Made off glances around the courtroom and looks at the faces of everyone he hurt. They still appear to be angry and thirsty for blood. But made off knows that this is his last chance to save himself. If he can convince this room that he's sorry, that he knows he was misguided, then maybe he has a shot at redemption and leniency. The judge and lawyers take their turn speaking. Finally made off is allowed to read a statement. He takes a small sip of water, clears his throat and begins. Made off admits that he operated upon the scheme. He says he knew it was an act of fraud and that it was criminal. But when he began the scheme, he thought it would simply be a short term solution to his problems. He believed he could quickly dig himself out of the hole. But made off also admits that this proved to be impossible. And so he ran the scheme for well over a decade. Made off tells the court that he knows he deeply hurt many people, including friends, family members, and thousands of clients. And made off says he's deeply sorry, ashamed of himself. He tells the court that he's here today to accept responsibility for his crimes. Made off finishes speaking and takes another look across the courtroom. Maybe he's imagining it, but it seems like some people were swayed. Maybe his plan worked. Maybe by admitting his guilt, he'll avoid a large prison sentence. Maybe the judge will show some mercy. But he won't know the answer until he receives a sentence. And that's a few months from now. Until then, all made off can do his hope and pray. Two weeks later, it's a cool spring morning in Manhattan. Andy made off walks outside his apartment, carrying a couple of Louis Vuitton suitcases. He brings the suitcases to an idling town car and loads one into the trunk. Andy looks up toward the apartment where his fiance and brother are finishing grabbing their things. The three of them are about to get out of town for a short vacation, a much needed trip, and Andy only hopes they'll hurry up so they can leave Manhattan as soon as possible. Andy looks out over his neighborhood and takes a deep breath. It feels like months since he last got a good night's sleep. Everyone he knows has turned against him. He's been expelled from his social clubs all because of his father, his father, Bernie, who admitted his guilt in court. And Andy's been found guilty too by association. So the sooner Andy made off can get out of Manhattan, the sooner he can try to forget the whole ordeal. Andy's about to head back upstairs. When he runs into a man wearing an old sweatshirt and sweatpants, his name is Reed Obbent, and he used to work at the firm as a trader. He was one of Andy's last hires. The two shake hands and Obbent gives a friendly smile. Well, notorious Andy made off, running away somewhere? Yes, very much so. Very much so. That has been tough. How you hold them out, as well as can be expected, I guess. I can imagine here, let me help you with your back. Obbent grabs one side of the suitcase, and together he and Andy load it into the trunk. Oh, wow. Well, thanks for your help, but how have you been Reed? Me? You know. No, I don't know. Trying to find a job, make a little money. I lost all with your dad. You invested with my dad? Yeah, I invested with your dad. I trusted him with everything. At that moment, Andy realizes that Obbent has gotten closer. He's hovering right over Andy. His breath's steaming in Andy's face. I didn't know. Well, I thought I was in good hands, right? Since he was a made off and a friend, right? Now I'm broke. God, I'm so sorry. I bet you are. Must feel terrible. These kind of stories must be keeping you up all night, hearing your Upper East Side apartment with your Louis Vuitton bags. Andy looks down and sees that Obbent's fists are now clenched. Andy takes a step back and closes the car's trunk. Reed, look, I didn't know he was doing it. I swear to God, oh, that right, huh? You were there 20 years. Your name was on the door right next to his. But you didn't know. He kept us all in the door. You think he didn't hurt us, too? Not as much as I want to hurt you. Obbent steps closer, his mouth, the threatening snow. And all at once, the adrenaline coursing through Andy's arms and legs locks him in place. Where's the money, Andy? Off shore somewhere, the Caribbean? When do I get my money back? There's no money. There's no money. It's gone. And there's no reason for this to get physical. Physical? I'm not going to hit you. I just want you to know that we all hate you. Whole world does. They hate you, shame on you, shame on you. Obbent then spits at Andy's feet and walks off. Andy stands frozen, watching Obbent disappear around a corner. When he's finally out of sight, Andy's body goes slack. He rests his forehead against a window of the town cart. He takes another deep breath and shouts a curse. It didn't get physical, at least this time. But Andy doubts that that's the last of these kinds of confrontations. Because he knows that wherever he goes, for as long as he's alive, he'll always be Bernie made off son. He'll never be free again. On June 29, 2009, Bernie made off arrived at court to receive his sentencing. He acknowledged again that his crimes caused suffering and pain. And he said that he now lived in a tormented emotional state. He made off then stood before the courtroom and apologized again as some of his victims watched sobbing. After Maidoff finished speaking, the federal judge handed down his sentence. He called Maidoff's crimes extraordinarily evil and sentenced him to 150 years in prison. For Maidoff, a 71 year old at the time, the punishment all but guaranteed that he would die in prison. As of early 2021, Maidoff is still alive and incarcerated in a prison in North Carolina. Bernie Maidoff's scam has been described as the largest ever Ponzi scheme. He's estimated to have caused about $20 billion of losses for his investors. It was a scheme that caused untold suffering across the world. Tens of thousands of people lost money and some were financially devastated. Maidoff's scheme had a large human cost too. Maidoff's son Mark committed suicide in 2010 on the second anniversary of his father's arrest. Maidoff's other son, Andy, died four years later from a recurrence of cancer. The disease came back he said because of stress and he blamed the cancer on his father. In 2009, Frank D. Pasgali, Maidoff's right hand man, admitted to his role in Maidoff's Ponzi scheme, completed guilty to 10 felony counts. He went on to cooperate with officials, helping to convict five other Maidoff employees for their role in the fraud. In the years since his arrest, Bernie Maidoff's victims have been able to recover about 70% of their losses. And the Federal Securities and Exchange Commission instituted numerous reforms in order to protect against other large Ponzi schemes like Maidoffs. Some argue that the finance industry is still regulated too loosely and that despite changes in federal law, investors could still be swindled by the next Bernie Maidoff. From wondering, this is episode three or four of Bernie Maidoff for American scandal. On the next episode, we speak with Diana and Rekes, an author who's written extensively about Bernie Maidoff. We'll discuss how Maidoff was able to gain so many people's trust and how he relied on that trust to get away with his scheme. If you'd like to learn more about Bernie Maidoff, we recommend the books Too Good to Be True by Aaron Arvidland and The Wizard of Lies by Diana and Rekes. This episode contains reenactments and dramatized details and while in most cases we can't know exactly what was said, all our dramatizations are based on historical research. American scandal has hosted, edited and executed produced by me Lindsey Graham for airship, audio editing by Molly Bach, sound design by Derek Barons. This episode is written by Charles Olivier, edited by Dave Cane, our senior producers Gabe Riven. edited producers are Stephanie Jens, Jenny Lauer Beckman and Arnon Lopez for Wondering.