Did Madoff Act Alone? Prosecutors Say No

CBS Evening News: The Government Is Investigating Bernard Madoff's Sons, Brother, And Wife, Among Others

(CBS)  Bernard Madoff is expected to plead guilty tomorrow to orchestrating one of the biggest frauds in U.S. history - cheating investors out of billions of dollars over three decades.

Madoff insists he did it all by himself. But based on the sheer scope of the crime, prosecutors believe he must have had help, reports CBS News chief investigative correspondent Armen Keteyian.

People familiar with the case tell CBS News that federal investigators are "ripping apart" 20 years of fraud inside Madoff's firm. They're moving beyond Madoff himself and looking at sons Andrew and Mark, who directed trading activities, and brother Peter, the company's chief compliance officer. None of them have been charged with any wrongdoing.

"This is a case where they're going to leave no stone unturned," said Sean O'Shea, a former federal prosecutor. "They're going to get to the bottom of it. And everyone who has criminal culpability will be charged."

Also under the microscope: Madoff's wife of 49 years, Ruth, who has not been charged in the case. In court papers, she claims nearly $70 million in assets separate from her husband's fortune, including a $7 million New York apartment, $45 million in bonds, and $17 million in cash. She's also listed as the owner of a $9 million Palm Beach mansion.

Investigators are said to be interested in the $10 million she withdrew from a brokerage account just one day before her husband was arrested last December. She took out another $5.5 million two weeks earlier.

Asked if he believes the federal government is looking into Ruth Madoff's actions, O'Shea replied, "It would be hard to believe that they're not."

A source with knowledge of the investigation told CBS News that another subject of the probe is Madoff's chief financial officer, Frank DiPascali, the day-to-day contact for many investors.

Investor Dr. Murray Morrison says his last conversation with DiPascali, just weeks before Madoff's arrest, caught him by surprise.

"He told us that Bernie Madoff had said they probably shouldn't put anything in e-mails," Morrison said.

So now as Madoff prepares for what may be his last night of comfort in his posh penthouse apartment, the government is digging around to determine just how many could follow his path to prison.

[davide1982]

I'm sure he was not alone. But nevertheless I'm convinced his tricks and the way he did it have been mastered by him only. Below is a summary of points that allowed Madoff to fool so many people, investors, auditors and regulators:

http://www.myhowtoos.com/en/red-hot/61-understanding-the-madoffs-fraud

[gallopinggranny]

The person who commented that they didnt feel sorry for the people who lost their money with Madoff because they are rich should really get a grip . That is a totally ridiculous statement..... These people worked hard to earn that money, they didnt sit on their duffs and collect welfare. Also there were a lot of older people who gave him their money to invest for their retirement, now they have nothing.... Madoff and his whole family should be prosecuted, and the government should step in and take everything they have away from them and return as much as possible to these people who lost out.

[scoobydob]

Posted by rnbwprsm03 at 10:23 AM : Mar 12, 2009

My bad it's simply insanity!

[scoobydob]

Posted by rnbwprsm04 at 7:07 AM : Mar 12, 2009

Is this called "splog" or "blam" when you combine spaming with blogging?

[scoobydob]

Posted by rnbwprsm04 at 7:07 AM : Mar 12, 2009

Is this called "splog" or "blam" when you combing spaming with blogging?

[bobnjersey]

[And no I'm not going to argue with you about 9/11. Do your own research. I'm just telling you for a fact that it happened. And you'll call me a liar, like liberals always do when they don't like the facts they're hearing. I know it first hand, and you can't convince me that I'm lying to myself.\
[Posted by sndkzyaa at 8:10 PM : Mar 11, 2009 ]

of course you're not going to argue ... because you have no basis for your claim ... and no ability to show that's it's true.

and of course you're a liar ... you have a clinton complex, your a modern day republican, and clearly blinded by your ideology. i'm guessing you also suffer from authoritarianism ... with you as the follower ... and regularly bowing to your auth leaders.

this is what the clinton haters do all the time ... everything is clintons fault ... and all the republicans ... who controlled congress for years ... are invisible.

did you see the part about phil gramm, his wife, and the energy traders ... highly connected to enron pushing the legalization of fraud into law? did clinton make them do that too? is all of this invisible to you because your really big clinton monster is standing in the way?

I know it first hand, and you can't convince me that I'm lying to myself. for a full description of this symptom ... see here:

http://home.cc.umanitoba.ca/~altemey/

[fzy1hc]

It was brought up to the government and they did nothing.

Due to the Clinton, Bush and all the senators making money!!

This comment I like:
It was SLAMMED down on their desk all at once in 2000 by a guy who proved mathematically that Madoff was committing fraud.

So Mr. Obama your government needs more training checking out fraud even when the facts are there!!! Get RIGHT ON IT!

[ramos1129]

There were others involved other than Madoff. From what I have read he had help from his family, from persons unknown at the SEC and other unknowns. This is just too massive and went on for far too long for only one man to have been involved.

[gce651]

Did he act alone? Probably not.
Let's string him up by the nuts in public and let the first 100 passers-by ask him. Then we can take the average and see what we come up with.

[sndkzyaa]

They would all serve prison terms along with the higher ups at the SEC who failed to act on evidence which grew over the years.
Posted by mark_bednar at 7:54 PM : Mar 11, 2009

The evidence did not grow over the years.

It was SLAMMED down on their desk all at once in 2000 by a guy who proved mathematically that Madoff was committing fraud.

And the SEC decided to just let Madoff get away with it. On Clinton's watch.

Which precluded any further investigation, because Madoff could plead double jeopardy.

That's why Bush couldn't have done anything about Madoff. Clinton blew the double jeopardy until Madoff could be brough up on some totally different charge.

Thanks to Clinton for giving Madoff an 8 year free pass.

[sndkzyaa]

you do know that ken lay was good buddies w/ gwb, right?
Posted by bobnjersey at 7:51 PM : Mar 11, 2009

You do know that gwb wasn't the president during the Clinton presidency, right?

Just checking. You might need to adjust those meds...

You also failed to address Madoff and Andersen Accounting and all the other rampant accounting fraud that was occurring across the country in the Clinton years.

Now that we know about Madoff, it forms such a consistent pattern that no objective person would ignore it.

And no I'm not going to argue with you about 9/11. Do your own research. I'm just telling you for a fact that it happened. And you'll call me a liar, like liberals always do when they don't like the facts they're hearing. I know it first hand, and you can't convince me that I'm lying to myself.

[bobnjersey]

[The reason they gave him all of that money, took his word, gave him (millions and millions) and never questioned him,,,,is because he's white and appeared to be rich. ]
[Posted by wheear at 5:56 PM : Mar 11, 2009 ]

you've left our the fact that he has been a career investment professional ... and served as the chairman of the nasdaq stock exchange for quite a few years.

[mark_bednar]

A detailed investigation will uncover accomplices. They would all serve prison terms along with the higher ups at the SEC who failed to act on evidence which grew over the years.

[bobnjersey]

[And the same for Enron, Andersen Accounting, and all the other crooks who played right under Clinton's nose, and Clinton pretended not to see it.]
[Posted by sndkzyaa at 7:24 PM : Mar 11, 2009 ]

you do know that ken lay was good buddies w/ gwb, right?

and of course i'm sure you're aware that phil gramm's wife served on the board of enron ... from a mere five weeks after serving as the head of the commodities futures trading commission for bush sr. (she left in '92 as clinton was coming in). she had a long run on enron's board ... during the time you claimed that clinton did nothing. then in 2000 ... she, her husband phil, and a bevy of energy futures lobbyists worked to bring us the commodities futures moderniztion act.

the fundamentals of which have created tremendous damage to our financial system ... cdos, cds's, oil speculation ... and from some of the very same traders involved with enron

[And the 9/11 pilot who got turned in five times to the FAA but the Clinton admin did nothing, that was probably the same thing.]

i'm guessing this is as accurate as your first statement. please provide a reference for your claims.

[sndkzyaa]

the most logical reason that the SEC failed to aggressively investigate Madoff is because the board and chairman were most likely told to back off by one or more of Madoff's favorite Congressmen and Senators who were willing recipients of his donations (aka bribes).
Posted by cbsblogger at 7:09 PM : Mar 11, 2009

And the same for Enron, Andersen Accounting, and all the other crooks who played right under Clinton's nose, and Clinton pretended not to see it.

And the 9/11 pilot who got turned in five times to the FAA but the Clinton admin did nothing, that was probably the same thing.

Clinton must have got a sore neck from looking the other way so often.

[tincup356]

Legalize Weed.... Criminalize more of the business crap that goes on at Wall Street.... If you steal 1 billion dollars you should have to work it off. How much time is this guy going to get? When he gets out of jail I'm sure he has a ton of cash stashed away... What a messed up system.... Put real criminals in jail....
Posted by JoeChemicalEngineer at 6:18 PM : Mar 11, 2009 .............legalization would create millions of jobs and billions in revenues,,,not to mention easing prison overcrowding and court dockets...leaving manpower and justice system space to go after criminals with REAL victims...like corporate and investment fraud...it seems to me that they are the ones who have brought this country to its knees...NOT pot......BUT Pot could help us create new industries that could even use the oil to produce diesel fuel......We have a natural resource that could be grown in any and ALL states.....the possibilities of new industry are many and with each one ...NEW JOBS.......The bone heads in Washington need to out grow the J Edgar Hoover mentality...it is archaic and is holding our country back from industry that could save us economically.

[cbsblogger]

Of course I don't know if this happened......but the most logical reason that the SEC failed to aggressively investigate Madoff is because the board and chairman were most likely told to back off by one or more of Madoff's favorite Congressmen and Senators who were willing recipients of his donations (aka bribes).

[Chris_Butler]

Did Madoff Act Alone?

You should already know the answer to this question. No. Too much paperwork.

[JoeChemicalEngineer]

Legalize Weed.... Criminalize more of the business crap that goes on at Wall Street.... If you steal 1 billion dollars you should have to work it off. How much time is this guy going to get? When he gets out of jail I'm sure he has a ton of cash stashed away... What a messed up system.... Put real criminals in jail....

[sndkzyaa]

Double Jeopardy only applies to actual convictions, not investigations. He could have been investigated a thousand times, but can only be convicted once.
Posted by debinok1 at 5:05 PM : Mar 11, 2009

Incorrect. Double jeopardy applies if the person was acquitted on the charge once. Then even if new evidence emerges, that person can not be tried again on the same charge.

That's exactly what happened to Madoff. He could have confessed to the whole thing in 2001, and the government couldn't have touched him because of double jeopardy.