Friday, December 17, 2010

Madoff Son

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December 16, 2010, 9:56 pm Legal/Regulatory
The Madoff Scandal

Mark Madoff’s Name Became Too Big a Burden to Bear


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Mark Madoff in 2005, at his father’s firm in New York.

Jin Lee/Bloomberg News

Bernard L. Madoff.Last Friday, the publisher of a promising real estate newsletter called Sonar Report rose before dawn, scoured the news to gather items for that day’s edition and, at 9:04 a.m., sent it out to his e-mail subscribers.

Unknown to almost all of his subscribers, that publisher was Mark David Madoff, the older son of the convicted swindler Bernard L. Madoff.

Less than 24 hours after sending his e-mail, he hanged himself in his downtown Manhattan apartment, leaving behind a life of burdens and blessings.

The blessings appeared to be sustaining him, even on that final day, according to those closest to him. They recall a man who was patiently building a new business, talking regularly with close friends, spending time with his wife and four children and, even in the last hours of his life, walking his dog, an affectionate Labradoodle.

But behind that screen, the burdens of life as Bernie Madoff’s son — the continuing suspicion from the public, the harsh accusations in numerous lawsuits, and his exile from the world of Wall Street — were steadily becoming unsustainable.

“The pressure of the last two years weighed on him enormously,” said a person who had remained close to him since childhood. “He was deeply, deeply angry at what his father had done to him — to everybody. That anger just seemed to feed on itself.”

The burden had eased as the public’s fierce interest in the case seemed to fade, this person said. But the spate of lawsuits filed last week by the Madoff trustee included a troubling one against his children and “cases against a lot of smaller people, many of whom he knew, some of whom were relatives,” the person continued. “It reopened the wounds. It must have just been more than he could bear.”

Mark Madoff, 46, had also been named in at least nine lawsuits that sought to recover millions of dollars in damages and muddied his professional reputation, friends said. And he was troubled by news articles that repeatedly — and, according to his lawyers, falsely — portrayed him as being under criminal investigation for some role in his father’s epic crime.

Most frustrating of all, this person said, was the fact that neither he nor anyone who knew him could publicly defend him. “There were all these comments from the trustee about how he was an incompetent boob, and to have all the people who knew otherwise muzzled by their lawyers — it was very, very hard.”

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258 CommentsNo one in the financial world, the only world where he had ever worked, would publicly risk giving a job to a Madoff.

He understood how tainted his identity had become. His wife, Stephanie, had applied to the court this year to have her last name and that of her two children changed to “Morgan.”

The Madoff name appears nowhere on the corporate records for Sonar Report. Its address is a U.P.S. store near his home, where he stopped in regularly to collect the mail. He concealed his role as founder and editor of the newsletter from everyone except family and a few close friends.

At least eight of his faithful friends were willing to talk about his failed struggle to stay on course, but none wanted to be identified for this article out of respect for the family’s privacy or concern that they would become the next target of what one called “the crazies” who circle around everyone in the Madoff saga.

Shame at being a Madoff shook the foundation of Mark Madoff’s lifelong identity, a close friend said.

“He had always been so proud of his name and being the guy who was Bernie Madoff’s son,” the friend said. “And then afterwards all anyone ever saw in him was that he was Bernie Madoff’s son.”

The media attention, which only intensified after Mr. Madoff’s suicide, prompted his family to decide to cremate his body and not hold a funeral. A private memorial service was held at an undisclosed location on Thursday.

An Unwelcome Spotlight

Mark Madoff and his younger brother, Andrew, had become accidental celebrities the day their father was arrested. The day before, the two brothers had reported to law enforcement that their father had confessed that his investment business was “one big lie,” a multibillion-dollar Ponzi scheme he had been running for years.

Bernard Madoff pleaded guilty and is serving a 150-year sentence in a North Carolina federal prison. His investors have cash losses estimated at $20 billion, but the wealth supposedly held in their accounts when the fraud collapsed totaled $64.8 billion. Mr. Madoff had not been in touch with his father or his mother, Ruth, since the fraud was exposed two years ago.

Mark Madoff had struggled visibly in the year that followed his father’s arrest. In October 2009, his wife reported him missing when he went out for a walk after a marital spat and did not return for many hours, according to a person familiar with the incident. Police ultimately traced him to the Soho Grand Hotel. According to the person who has been close to him since childhood, he sought counseling after that episode and seemed to have steadied himself.

The unwelcome spotlight returned to the Madoff family as the second anniversary of his father’s arrest approached. According to several friends, Mr. Madoff had expressed anger and frustration with the media coverage, especially articles he saw on the eve of his death that suggested federal prosecutors were continuing to scrutinize him and his brother. Their lawyers have said that neither Mark nor Andrew has been notified by prosecutors that he is the target or subject of a criminal investigation.

The renewed media attention and incessant litigation had weighed on Mr. Madoff, say his friends. But a close friend who spoke with him on Friday said his concern over the anniversary coverage didn’t seem out of the ordinary.

“There was nothing from the discussion that suggested he thought this was some big event,” the friend said. “It seemed like this was the same old news coming up again.”

Mr. Madoff and his brother were raised in Roslyn, N.Y., on Long Island. “He was the gorgeous blond boy that most guys envied for his good looks and most girls wanted to go out with, or at least flirt with,” wrote Brett Cantor Harris, a schoolmate, on her blog the day of his death.

After graduating from the University of Michigan with a degree in economics, Mr. Madoff moved to New York and joined his father’s company, Bernard L. Madoff Investment Securities. He worked in the firm’s legitimate market-making and proprietary trading arm. The unit, which was run by the younger Mr. Madoff and his brother, was distinct from his father’s sham money-management business and was a formidable success on Wall Street for decades.

Mr. Madoff married his college sweetheart, moved to the wealthy suburb of Greenwich, Conn., and had two children. He got divorced and married his second wife, the fashion executive Stephanie Mikesell. They had two children and settled in Manhattan’s SoHo neighborhood. He kept a residence in Greenwich and also owned a waterfront home on Nantucket.

After his father’s fraud was exposed, Mr. Madoff’s spending was constrained and subject to supervision by the bankruptcy trustee. But before then, his senior position at a stock-trading powerhouse had afforded him a luxe lifestyle.

Mr. Madoff earned $29.3 million over his last eight years at the firm, according to a lawsuit filed against him by Irving L. Picard, the bankruptcy trustee seeking to recover money for the fraud’s victims. He also benefited from his father’s bogus investment advisory business, taking at least $17 million more from his family’s accounts than he deposited, the lawsuit asserted. It sought to recover at least $67 million from Mr. Madoff individually, and more than $130 million from the other Madoff family executives at the firm.

In the complaint, filed in October 2009, Mr. Picard described Mr. Madoff’s compensation as “astronomical,” and accused him and his brother of being “completely derelict” in their duties and responsibilities at the firm.

Mr. Madoff took great pride in his career and was deeply hurt by Mr. Picard’s accusations, friends say. The firm’s market-making business employed about 120 people and traded tens of millions of shares a day, according to a presentation by Lazard, which helped the Madoff trustee sell the business last year.

Mark and Andrew Madoff also ran the firm’s proprietary trading business, which they started in 1997 and which was liquidated last year. That business earned approximately $270 million over 11 years and substantially outperformed the overall market, according to the Lazard profile.

Mr. Madoff had always seemed sensitive to criticism and tended to take his grievances too much to heart, said one family friend and business associate. “That’s why I never believed he knew about the fraud,” this person said. “He was always a nervous wreck. He could never have stood it — keeping a secret like that would have torn him apart.”

Against that history, his behavior the last week of his life did not ring any alarms with those in regular contact with him.

They never expected how the week would end.

Final Messages

Police pieced together his final messages after seizing his computer and mobile phone, though his lawyers promptly protested and those devices were returned to his family this week.

According to the police reports, at about 4 a.m. on Saturday, Mr. Madoff sent two e-mails to his wife, Stephanie, who had taken their 4-year-old daughter to visit Disney World in Florida on Wednesday, Dec. 8, leaving their 2-year-old, Nicholas, in her husband’s care.

One of his e-mails said, “Please send someone to take care of Nick.”

Another said: “I love you.”

He also wrote his lawyer, Martin Flumenbaum. That message said: “Nobody wants to believe the truth. Please take care of my family.”

When Stephanie Madoff saw her husband’s messages, she called her stepfather in New York and asked him to go immediately to the family loft on Mercer Street in Lower Manhattan.

Her stepfather, Martin London, arrived just before 7:30 a.m. and found Mr. Madoff’s body hanging from a black dog leash attached to a metal beam in the living room ceiling.

There was no evidence of a struggle in the tidy, well-kept apartment, police said. But there was wrenching evidence of Mr. Madoff’s suicidal determination.

A snapped vacuum cleaner cord was suspended from the same metal beam, and a noose fashioned from that cord was on a table nearby. A second leash was attached to the beam, but there was no sign that it had been used in a suicide attempt, according to a person familiar with the investigation.

The victim’s son was found unharmed in the apartment, as was the family’s dog, Grouper.

The discovery horrified Mr. Madoff’s friends, who felt he had been weathering the storm of the last two years and was slowly rebuilding his life.

An avid athlete, he had made plans in recent weeks for future ski trips with friends. He had visited his older son at a Western college. He had kept routine appointments — including one the Friday afternoon before his death.

Mr. Madoff had no illusions that he could get work in the securities industry again, according to the person close to him since childhood, but he did work hard in the last two years “to maintain the network of relationships he had in the industry.”

A close friend, a financial services executive, offered Mr. Madoff a desk at his downtown offices where he could make calls and set up meetings to get back on his feet professionally.

Mr. Madoff did some quiet consulting work and about a year ago began sending out the Sonar Report. It was a one-man operation. He would wake at 4 a.m., search the Internet for real-estate related news and compile the newsletter himself, according to a close friend.

At first, he sent the newsletter free to attract a following. After about six months, he began asking $20 a month.

An introductory note to new subscribers said the Sonar Report was produced by “a new firm” and was “looking to expand our subscriber base.”

It is unclear how many people were paying for the Sonar Report. In May, Mr. Madoff told a friend that he had 1,000 people on his mailing list.

A lawyer who advised Mr. Madoff on copyright issues related to the newsletter said that the focus of their conversations was always on the long-term viability of the venture. Mr. Madoff was hopeful that the business model was “scalable” and newsletters could be developed for other industries that weren’t widely covered, the lawyer said.

Sonar Report has not appeared since Friday.

“Is it not in business anymore?” asked an executive at a large real estate brokerage firm on Tuesday, after a reporter inquired about the newsletter Mr. Madoff had published anonymously. “I haven’t gotten anything from them this week.”

Al Baker, Susanne Craig, Elissa Gootman and Nelson D. Schwartz contributed reporting.

Mark Madoff’s Sonar Report

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258 Readers' CommentsPost a Comment »All CommentsHighlightsReaders' RecommendationsRepliesOldestNewest of 11Next 1.

Cris Ranston

Elmhurst, NY

December 17th, 2010

7:16 amI just read that Mark Madoff, the eldest son of Bernard Madoff, was found dead in his apartment in New York. It looks like a suicide, but who can tell?

His father was given a 150 year sentence to serve in a Federal Penitentiary after Mark turned him along with evidence that his father apparently supplied.

Within minutes of the announcement I read horrible responses to the tragedy.

Whatever Bernard Madoff did was no call for a death sentence for his son.

Time and the actions of the Federal Government have shown that his behavior was no different than that of the major banks and stockbrokers of New York.

The one difference between them and Bernard Madoff was that he called it off.

Timothy Geithner was rewarded for his role and he is now the Secretary of the Treasury.

The CEO of Bloomberg Financial Services is now Mayor of New York.

Bernard Madoff is in Butner Federal Correctional Complex in North Carolina.

The Federal government is helping the people he stole from get it back so they can lose it again.

We pay for all these losers to win.

This nation is failing every test put to it.

We await in this season the birth of Jesus and a renewal of promise and good will, peace on earth.

At the time of his death as Jesus hung on the cross He said to the thief beside him, “ “Truly I tell you, today you will be with me in paradise.”

Recommend Recommended by 36 Readers 2.



December 17th, 2010

7:16 amHow incredibly regrettable.

I wish he had ignored the public (us) and lived to be an old man.

Enough with the Madoff saga. The guy's in jail. Will the "victims" stop punishing this family? I've had enough. Now it's taken a life.

He was a father. Husband. Self-sufficient. Friend.Recommend Recommended by 92 Readers 3.



December 17th, 2010

7:16 amBefore the scandal broke, he seemed very much like a guy in denial.Recommend Recommended by 15 Readers 4.



December 17th, 2010

7:17 amSorry he had to end his life this way. I would think he would spend the time to clear his good name, if he had one.Recommend Recommended by 16 Readers 5.


New York, NY

December 17th, 2010

7:17 amYes, yes ... blessings, struggle, friends, anger, frustration, etc.

What he didn't do was GIVE THE MONEY BACK.

He had $67 million of other people's money. He didn't give a cent of it back.

Zero sympathy.

Stephanie Mikesell/Madoff/Morgan -- give other people their money back.Recommend Recommended by 163 Readers 6.



December 17th, 2010

7:17 amThis is rather unfortunate. What exactly is sonar report?Recommend Recommended by 2 Readers 7.



December 17th, 2010

7:17 amIt's worse than a tragedy, but I guess at the end of the day, the sins of the father shall be visited on the son...Recommend Recommended by 15 Readers 8.


richmond, CA

December 17th, 2010

7:17 am

There needs to be a serious investigation into this. Not a ho-hum, the stress got to him. It's very likely he was killed to keep him quiet. As the son of the master, we have to assume that he probably knew where the billions were stashed and the bodies were buried.

Notice that the suicide notes were all electronic -- no handwriting that could confirm the messages came from Mark. A two year old son and he kills himself. Yeah, right.Recommend Recommended by 60 Readers 9.


Sausalito, Calif

December 17th, 2010

7:17 amHow terribly sad.Recommend Recommended by 23 Readers 10.


Chicago, IL

December 17th, 2010

7:18 amI must say, this is an incredibly well-done story. I really had not heard much about Mark Madoff until his death, but reading this story you can really understand and feel his frustration and despair. It's very, very sad.

What's eerie is that I just read a book by Al Capone's niece, "Uncle Al Capone," and what she describes in that book is very similar to what Mark faced: the younger relatives of a notorious criminal faced with the impossible task of escaping his toxic shadow. In fact, the author's father also killed himself when she was a child. The parallels are fascinating.Recommend Recommended by 52 Readers 11.

mary stuart

new york, ny

December 17th, 2010

7:18 amOnce Marc Madoff found out that all the money his Daddy gave him was

made through fraudulent activity, he should have returned it. But he didn't and the law suits were pending for him to give up his assets which were given to him but acquired illegally by his father and he didn't want to give them up or his life style. Did anyone ever think

that Mark Madoff could not live with himself because he could not come to terms with his own "greed" for holding on to his possessions which should be given back to all the folks who lost their money. Even if he did not commit the crime of fraud, he was partially guilty for holding on to the possessions illegally obtained by his father.

His deed was a very selfish act.Recommend Recommended by 130 Readers 12.


New York, NY

December 17th, 2010

7:18 amI've seen so many horrible comments made about this man, I just wanted to be the first here to chime in with how sad of a story it really is...the man died for his father's sinsRecommend Recommended by 73 Readers 13.



December 17th, 2010

7:18 amAs someone who has been touched by suicide (my mother died that way), this story is devestating. If his wife, children and friends read this, my thoughts are with you. I am so very sorry for this terrible loss. Recommend Recommended by 98 Readers 14.

Katherine in PA

Philadelphia, PA

December 17th, 2010

7:18 amWhat Bernie Madoff did for so many years was absolutely abhorrent, but this is just the saddest story. While everyone can be furious with the father, why did so much rage have to be leveled at the sons? There's something very tawdry about Picard's behavior and I wish he had kept this entire affair on a less personal level - assail the crimes, assail Bernie Madoff, but reserve judgement on other family members until there is proof of their complicity. This is also a reminder to all of us that words can cut to the bone and we should mind our tongues. Cruel words are never forgotten - they are etched on our souls.Recommend Recommended by 80 Readers 15.

samuel d kouame

New York and Accra, Ghana

December 17th, 2010

7:18 amSad to hear this. He seemed to be a great guy who worked hard to establish his reputation to see it crumble with the misdeed of his father. As a society we need to stop indexing people for the mistake of others. May he find eternal peace. I hope the best for his kids and his wife.Recommend Recommended by 34 Readers 16.



December 17th, 2010

7:19 amAn unbelievably sad story. No parent should be forced to preside over the death of their child. To cause it .... unimagineable.Recommend Recommended by 39 Readers 17.



December 17th, 2010

7:19 amMaybe the media will take this as a lesson to wait until someone is convicted or, at a minimum, charged before relentlessy printing allegation and defamatory articles? We, and the media, have long forgotten innocent until proven guilty....Recommend Recommended by 41 Readers 18.


Long Beach,ca

December 17th, 2010

7:19 am"Less than 24 hours after sending his e-mail, he hanged himself in his downtown Manhattan apartment, leaving behind a life of burdens and blessings."

He hanged himself? Does this publication even utilize the style guide? Smh. It is a shame though this young man felt the need to take his own life, that is never the answer. Even though is favor is a very corrupt man who stole billions destroying the futures of millions, i wouldnt wish the lose of a son on anyway. Recommend Recommended by 5 Readers 19.

Marcel Duchamp


December 17th, 2010

7:20 amHe could have given up The Money and started all over - but The Money hung him.Recommend Recommended by 84 Readers 20.


New York

December 17th, 2010

7:20 amA very sympathetic article about a middle-aged man who should have known better -- and who should have/may have known what his father was doing. And if he did not know, then it must have been a blind decision -- more comfortable than discovering the truth. Mark Madoff's pain and his painful death is very very sad. Being raised in a dysfunctional, amoral, over-the-top self-indulgent family didn't help him learn how to be a man with conscience and responsibilities owed by the haves to the 'have nots'. (Like, how many yachts, how many houses, does one family need?) And why does the media still treat him as a boy who got lost rather than a man who joined the team? I'm guessing he thought death now was better than a possible life in jail. Frankly, I'd make the choice he did.Recommend Recommended by 61 Readers 21.



December 17th, 2010

7:20 amThis article contains information that might help a reader understand "why?", but it doesn't give any information about "why then?" and "why in that place?" AS usual, suicide leaves the rest of us feeling helpless, confused, and really sad. An adult friend of mine recently committee suicide inexplicably after what seemed to be a normal day. However, my friend had been taking Lexapro AND Ambien. There is some evidence that in very rare cases these drugs, alone or in combination, can trigger suicidal thoughts in depressed individuals. It would be useful to know what drugs Mr. Madoff was taking that night. It might explain why that sudden and determined late night/early morning plunge while a helpless child slept in the next room. One father betrays his son, and that son turns around and betrays his own little son. The message a child takes from a parent's suicide is that the parent didn't think the child was worth living for. This is all a terrible story. I would like the cold comfort of thinking that a pill turned an innocent victim and good father into a dead man in this own home.Recommend Recommended by 39 Readers 22.



December 17th, 2010

7:20 amNot buying it

He lived in a 6 million dollar loft

Bought with money gained illegally

it strains credulity to believe he did not know or

Did not suspect

I think he, the bother and ruth knew

It boggles my mind that he still lived in luxury

While others were wiped out by his father

I have zero sympathy for him

They file criminal charges against bernies secretary

But not the children or wife

If he had one ounce of shame he would have given his ill gotten gains up to the victims

Recommend Recommended by 119 Readers 23.


New York, NY

December 17th, 2010

7:20 amWe are asked to believe he knew nothing was amiss, but he withdrew $17m more than he deposited.Recommend Recommended by 89 Readers 24.

no sympathy


December 17th, 2010

7:21 amWould a Madoff with a clear conscience kill himself? I think not.Recommend Recommended by 47 Readers 25.



December 17th, 2010

7:21 amWHAT IS THE NY TIMES THINKING? this is such a lightweight, fawning article that i am amazed it was published. words like "faithful friends", " legitimate market-making" business," college sweetheart" , "even in the last hours of his life, walking his labradoodle", are so bogus and sympathetic. this guy was a crook and a son of a crook, and a brother of a crook. he hung himself like a coward before he dealt with his crimes while his two year old slept n the next room. why was his wife at disneyworld if he was so despondent about his father's two year anniversary of public reproach.? the guy was a coward and a crook, who came from a family of crooks. i wouldn't be surprised if his mommy told him to kill himself to get sympathetic media attention. Recommend Recommended by 141 Readers of 11 Next