Thursday, May 7, 2009

Madoff secretary claims fraudster was over-controlling and sexist

Employee casts new light on the character of the multi-billion fraudster.

Bernard Madoff
Buttoned up: Bernard Madoff's former secretary has gone into print to cast aspersions on his character Photo: EPA

Convicted fraudster Bernard Madoff was a short-tempered, overly controlling boss who frequented massage parlours and had a deeply sexist side to his personality, his secretary of more than 20 years has alleged.

Eleanor Squillari claimed he often made nasty comments about her appearance and had a forthright relationship with his wife Ruth.

The allegations – in the June edition of Vanity Fair magazine – paint a picture of a man who, in spite of his negative traits, was popular with his employees, and appeared to plan his eventual demise with fine aplomb.

Ms Squilllari, who spent two months co-operating with the FBI after Madoff's arrest for a $65bn (£43bn) fraud last December, even recounts a bizarrely prophetic conversation she held with Madoff – who faces up to 150 years in prison at sentencing on June 16 – in which he discussed a fraud carried out by a client's secretary.

"You know, [he] has to take some responsibility for this," Madoff allegedly told Squillari. "He should have been keeping an eye on his personal finances. That's why I've always had Ruth watching the books.

"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand," he said. "You get comfortable, and before you know it, it snowballs into something big."

Although "Bernie was irresistible to women," Ms Squillari once caught him looking through escort adverts in the back of a magazine, and frequently visited massage parlours: "Once, I looked in his address book and found, under M, about a dozen phone numbers for his masseuses."

Leading up to his confession of his crimes to his sons in December, Madoff appeared detached from his empire, checking his blood pressure every 15 minutes and refusing to look at his post.

Meanwhile, court papers claim Madoff used his investment firm as his and his families own “personal piggy bank”, siphoning investor’s money to fund their own lavish lifestyle.

The allegations are contained within papers filed by Irving Picard, the man liquidating Madoff’s securities business, who suggests he used tens of millions of dollars of clients funds to cover day-to-day costs for family and employees.

High on the list of erroneous payments from Bernard L. Madoff Investment Securities (BLMIS) included $11.5m for two yachts, a $9m loan to Madoff’s brother Peter, and a $5.5m loan to Madoff Technologies which family members owned a majority stake in.

But payments were also made, the papers allege, to cover salaries for staff who did not apparently work for BLMIS, such as the captain of a boat owned by Frank DiPascali, Madoff’s chief investment aide. Relatives and servants were also on the payroll, while others, including Peter’s wife, were given company credit cards even though they had no formal connection to the firm.

Mr Picard detailed the lavish spending as part of his attempt to consolidate the bankruptcy proceedings of Madoff’s business with his personal estate.

“BLMIS was Bernie Madoff and Bernie Madoff was BLMIS, each the alter ego of the other,” said Mr Picard in the court filing.

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