Radiolab Presents: Ponzi Supernova

Summary

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Radiolab: "Ponzi Supernova"

Release Date: February 10, 2017
Host: Jad Abumrad & Robert Krulwich
Guests: Steve Fishman (reporter/producer of "Ponzi Supernova"), Ellen Horn (producer/executive producer)

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Overview:

This episode of Radiolab introduces excerpts from the Audible series "Ponzi Supernova," which dives deep into the infamous story of Bernard Madoff and the largest financial fraud in history. Through investigative interviews and rare recordings of Bernie Madoff himself, reporter Steve Fishman reconstructs how Madoff pulled off his $65 billion Ponzi scheme, the psychology behind it, and the devastating personal and societal fallout.

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Key Discussion Points & Insights

1. Chasing Madoff: Pursuing the Interview

• Steve Fishman describes his lengthy, creative attempts to reach Madoff in prison, highlighting the persistence needed to get exclusive audio (03:18–04:44).
• Fishman sent books, copied philosophical plays like Sartre's No Exit, even deposited money into Madoff’s commissary, all to provoke a response.
• Persistence pays off: Madoff finally calls Fishman from prison, leading to a series of tense, time-limited conversations (04:44–05:57).

Quote:
"My first reaction to Bernie on the phone is 'Hey kids, shut up, it's Bernie Madoff!'"
– Steve Fishman (04:51)

2. Madoff’s Family Fallout and Emotional Cost

• Madoff asserts in personal exchanges that his family were completely unaware of his crimes, insisting he shielded them until the very end (07:51–09:28).
• The emotional confession to his wife and sons is described in harrowing detail—the night his world collapsed (09:28–10:44).
• Madoff’s oldest son, Mark, died by suicide exactly two years after Madoff’s arrest; his other son, Andrew, succumbed to cancer, blaming the relapse on his father's disgrace (11:47–13:14).
• Madoff reveals ongoing psychological torment in prison, frequently seeing a psychologist and expressing remorse (13:14–14:36).

Quote:
"The last time I cried like that was in the St. Moritz mall when I found out my son had cancer."
– Bernard Madoff (10:41)

Quote:
"Trust me, I’m not okay. It never will be."
– Bernard Madoff (13:24)

3. Roots: Madoff’s Early Ambitions and Sense of Exclusion

• Madoff’s drive stemmed from watching his father lose everything during the post-Korean war steel shortage and wanting to secure his own legacy (15:24–16:01).
• Feeling like a working-class outsider desperate to break into Wall Street’s inner circle, Madoff leveraged small advantages and initially found some success.
• As his operation grew, he sought validation from prestigious clients and banks that previously excluded him, which fed his ego and led to reckless decisions (17:34–18:42).

Quote:
"We were a small firm, not a member of the New York Stock Exchange...very obvious to everybody."
– Bernard Madoff (17:23)

4. Mechanics and Collapse of the Ponzi Scheme

• Radiolab succinctly explains the structure of a Ponzi scheme for the audience (19:59–20:40).
• The scheme unraveled after the 2008 market crash, when massive withdrawal requests exposed the house of cards (20:40–21:02).
• Fishman observes that Madoff presents himself both as a criminal mastermind and as a pawn overwhelmed by demands from powerful, greedy clients—a complicated, sympathetic self-narrative (22:53–23:12).

Quote:
"He’s telling me two stories — on one hand, this wizard...on the other, a pawn. A word you don’t normally associate with Bernie Madoff."
– Steve Fishman (22:27)

5. Inside the Fraud: The Big Four and Complicity

• The "Big Four" investors (Jeffrey Picower, Norman Levy, Carl Shapiro, Stanley Chase) are revealed as key players whose immense demands and withdrawals arguably pressured Madoff to perpetuate the fraud (30:36–31:02).
• Employees openly manufactured returns—sometimes reissuing statements to match clients’ desired profits.
• Prosecutor Matt Schwartz and FBI agent Steve Garfinkel suggest the "Big Four" almost certainly knew (or should have known) something was amiss, given their impossible returns and demands (31:11–32:44).

Quote:
"There were some instances...customers got their account statements...complained, and then they sent the statement back...she would do a new statement, and miraculously you got your new statement with a new, higher return."
– Steve Garfinkel (31:47)

6. Madoff’s Rationalization and Victim-Blaming

• Madoff repeatedly downplays harm to his victims, implying only the wealthy were affected and they were "warned" (37:23–38:35).
• He frames himself as a victim of client greed and societal expectations, mixing apologies with self-justification.

Quote:
"On all their confirmation, on all their statements...they knew this kind of trading is speculative. And believe me, if you don’t think they had doubts, they had doubts."
– Bernard Madoff (37:37)

7. The Real Victims: Broader Impact and Ongoing Fallout

• The episode closes by stressing that the destruction was very real for ordinary investors. Some victims lost everything, their stories captured in audio montage (38:35–39:30).
• The legal aftermath is ongoing: thousands of lawyers are still working to recover lost funds; some money is clawed back from "net winners," creating moral and legal dilemmas.
• The broader system—including banks and hedge funds that "weaponized" Madoff by presenting him as a safe investment—escaped significant repercussions, raising unresolved questions about systemic accountability (39:30–41:59).

Quote:
"He was weaponized by the financial system. And so we wondered, why weren’t those hedge funds accountable for not doing their job?"
– Steve Fishman (41:37)

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Notable Quotes and Moments with Timestamps

• On the Chase of Madoff:
  "I copied out Sartre’s play No Exit and I sent that to him, just to try and get a rise."
  – Steve Fishman (03:29)

• Family Confession:
  "I told them all, they immediately left. They went to a lawyer. The lawyer said, you gotta turn your father in."
  – Bernard Madoff (11:39)

• Bernie’s Emotional Toll:
  "I have tearful sessions [with a psychologist] every week."
  – Bernard Madoff (14:36)

• On Social Status:
  "It feeds your ego. All of a sudden, these banks, which wouldn’t give you the time of day...willing to give you a billion dollars."
  – Bernard Madoff (18:23)

• On Systemic Complicity:
  "Who has the power in that relationship? Is it Bernie...or is it the party who’s now making Bernie do illegal things?"
  – Steve Fishman (34:39)

• Victim Testimonies:
  "Sometimes at the end of the month, I scavenge in dumpsters."
  – Anonymous victim montage (39:08)

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Timestamps for Important Segments

• Chasing Bernie/First Contact: 03:14–05:57
• Madoff’s Family and Collapse: 07:51–13:26
• Madoff’s Early Motivations: 15:24–18:42
• Ponzi Mechanics/Fallout: 19:59–21:02
• The Big Four’s Role: 30:36–34:39
• Systemic Impact/Victim Fallout: 38:35–41:59

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Tone and Style

The episode seamlessly blends empathetic, psychological inquiry with forensic journalism and storytelling. There’s a mix of disbelief, empathy, and incredulity—Radiolab’s trademark tone—allowing listeners to understand both the human and systemic dimensions of Madoff’s Ponzi scheme.

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Final Thoughts

The episode lays bare not only the notorious fraud and its personal consequences but the societal forces and social structures that allowed it to flourish. It illuminates the complicated motives, rationalizations, and self-delusions of Bernie Madoff, his clients, and the wider financial ecosystem, asking: Who really shoulders the blame in crimes of this magnitude? And—perhaps even more worryingly—what systems remain in place?

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Recommended Action: For a deeper dive, listen to the full "Ponzi Supernova" series, especially for further reporting on the moral and legal reckonings in the aftermath of Madoff’s collapse.

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Transcript

[Jad Abumrad]

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[Robert Krulwich]

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[Jad Abumrad]

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[Robert Krulwich]

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[Jad Abumrad]

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[Robert Krulwich]

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[Jad Abumrad]

Wait, you're listening. Okay.

[Steve Fishman]

All right.

[Jad Abumrad]

Okay.

[Steve Fishman]

All right.

[Jad Abumrad]

You're listening to Rad Lab lab Radio Lab from wnyc. So maybe you just want to start at the beginning. So how did you bump into this? Had you been following financial stories?

[Robert Krulwich]

I did some financial stories, but I think my beat was more people in the headlines at the worst moments of their lives. And then I would go in and become their friends and we would talk intimately about what downfall means when you've been at the mountain top.

[Jad Abumrad]

Hey, I'm Jad Abumrad.

[Robert Krulwich]

I'm Robert Kolwich.

[Jad Abumrad]

This is Radiolab. And today, the arrest of Wall street legend Bernard Madoff. A behind the scenes look at the greatest financial fraud in history.

[Steve Fishman]

What the hell is going on here?

[Robert Krulwich]

Who's blackmailing who?

[Steve Fishman]

I'm after.

[Jad Abumrad]

Wait.

[Robert Krulwich]

Come on, buddy.

[Steve Fishman]

I know you got that money, man.

[Robert Krulwich]

Where that money?

[Jad Abumrad]

It's a series called Ponzi Supernova from audible.com and just to set up how we got to it, Ellen Horn, the great Ellen Horne who was one of the founding members of Radiolab. A couple years ago she left us. It was very sad for us, but she Went off to audible, teamed up with a guy named Steve Fishman who you just heard, and together they produced this series which has tape in it that has never before been heard. And it's pretty extraordinary and kind of.

[Robert Krulwich]

You know, given what's happened recently with financial reforms up for reconsideration. What you're about to hear, you will find a little bit troubling and extremely timely.

[Jad Abumrad]

Yeah. And so what we did a couple days ago, we got Steve and Ellen into the studio.

[Steve Fishman]

Oh, dear.

[Jad Abumrad]

To play us some stuff and to talk about it.

[Robert Krulwich]

Yeah, sure.

[Jad Abumrad]

You spend the first episode really. Sorry. You spend the first episode really chasing the guy.

[Robert Krulwich]

Yeah.

[Jad Abumrad]

Trying to get access to Bernie Madoff in prison.

[Robert Krulwich]

Yeah. You know, I did all kinds of things. I mean, this was like years long pursuit. I would send Bernie novels, the mail. I would try and insult him. I copied out Sartre's play no Exit, and I sent that to him just to try and get a rise. I put money in his commissary account and then sent him a you're welcome note, never receiving a response.

[Jad Abumrad]

Do you know why at this point? What was driving this?

[Robert Krulwich]

I mean, listen, Bernie has done this. I mean, everybody knows. And we keep reading about the details and we keep triangulating Bernie from friends who very obviously didn't know him, investors who obviously didn't know him. I want to hear this guy tell me. I want to say, bernie, why did you do this? You were already rich. Come on, what's going on here? I mean, Bernie had the greatest seat in the house to what was going on behind the scenes.

[Jad Abumrad]

So Steve has explained to us, for years, he just kept pestering the guy in prison.

[Steve Fishman]

Very stubborn man.

[Jad Abumrad]

He ended up talking to like a whole series of other prisoners, asking them to get the word to Bernie. And eventually, just to cut to the.

[Robert Krulwich]

Chase, one day my home phone rings. So I pick it up. It's a Sunday evening, the jets game is on. And I got my two young kids running around, and it's. You have a collect call from an inmate at a federal prison. And then. And then you hear Bernie's voice saying Bernard Madoff in this kind of slightly kind of disgusted tone of voice. And I. This is like Captain Ahab, but now you have kids running around the room. A Jets game on. Here's the phone call. Oh, my God. Are you ready? And I'm not ready. I don't have a pen and paper, I don't have a tape recorder, and my kids are in the background. So my first reaction to Bernie on the phone is hey, kids, shut up. It's Bernie Madoff. So then calls come only in 15 minute bursts. And then for whatever reason, meaning at exactly 15 minutes. Exactly 15 minutes, it just ends. And then the inmate has to wait 15 minutes to call you back. Wow. So he hangs up. I know I have 15 minutes. I'm running around. I must have a tape recorder somewhere. Find one in the closet. I, you know, tested an inmate at a federal prison.

[Jad Abumrad]

At this point, we're just gonna drop into the series.

[Steve Fishman]

Bernie. Yeah. Hi, Steve. Hi. You got cut off. The middle of saying something. You said you were just. You were. I was so. And then you got cut off.

[Robert Krulwich]

Well, I. Yeah, I was just saying it was great to talk to you because, you know, talking to you in person is so different than reading about you. All the kind of caricature out there and the whole sense of you as being, you know, just this one dimensional person.

[Steve Fishman]

It was nice talking to you too, Steve, through all these years. So. Yeah, that's right.

[Robert Krulwich]

So Bernie Madoff is the greatest financial crook in history. But his voice is familiar to me. Madoff could be the uncle I run into at bar mitzvah's. We have common roots. Middle class New York Jews and also an interest in the jets screwing up.

[Steve Fishman]

The game for you.

[Robert Krulwich]

I got it recorded.

[Steve Fishman]

Okay.

[Robert Krulwich]

Yeah, I like that. I can breeze through commercials if I want to.

[Steve Fishman]

What do you do? Are you near the TV room now? Yeah, yeah, the phones are right near the TV room.

[Robert Krulwich]

I try to imagine the former chairman of the NASDAQ at a payphone in a cell block. Inmates lined up behind him with prison made tattoos, prison honed muscles. Oh, and you can call at night, too.

[Steve Fishman]

Yeah, I can call up till 10:30 at night.

[Robert Krulwich]

Prison is not what Bernie expected.

[Steve Fishman]

It's not the way it's been depicted. Your rooms, there's no bars on the windows. Wooden doors, they're not locked at night. I have a nice, pretty big picture window. You can't open it.

[Robert Krulwich]

Yeah, I mean, I guess aside from being, you know, separated from everybody and, well, the.

[Steve Fishman]

Oh, you know, my family.

[Robert Krulwich]

You're probably not talking to Ruth right now.

[Steve Fishman]

No, it's just the whole thing is, you know, it's just. Look, I know you'll never go.

[Robert Krulwich]

Oh.

[Steve Fishman]

My God.

[Robert Krulwich]

Time'S up. It's frustrating. A call starts. We build momentum. Bernie begins to open up. And then the guillotine falls. Trust is tough to build on the timer. And I need to be the person he will trust with the whole story. At least as he sees it. Bernie lets me know he has a story to tell. He's been misunderstood. I'm a good person, he tells me. He starts with this. His family didn't have a clue. Bernie insists he shielded his family, nobly kept them in the dark until the unseasonably warm afternoon of December 10, 2008.

[Steve Fishman]

At that stage, I was sort of in a panic about the whole thing.

[Robert Krulwich]

He was at his office. Bernard L. Made off securities, a family business.

[Steve Fishman]

What happened was Andy and Mark came into my brother during the afternoon and said, what's wrong with that? He looks exhausted, he looks terrible. He just looks like he's falling apart. And then my brother came in dirty, said, well, you know, you have to tell the boys. They know something's wrong, they don't know what it is. And I said I will. I said I can't tell them in the office because I'm just going to fall apart. So. And I have to tell Ruth. She has no idea. So we got into my car and we drove a few blocks. The only driver drove into a few blocks to the apartment. Fortunately, Ruth was home. We had my Christmas party that night.

[Robert Krulwich]

They went into Bernie's study.

[Steve Fishman]

That's when I broke down and I told him, started crying and I explained to him what the deal was. I owe all this money out and I'm not gonna be able to recover it. And I was crying and Andy, I remember, took me in his arms. You know, he felt sorry for me at that stage. I don't think he didn't totally sunk into everybody. Mark was standing there in shock and I said, look, I don't know what else to tell you. I said, but I don't know what you're supposed to do now that I've told you this and nobody gets angry. At that point everybody was stunned. They were shocked. I mean, they were scared and they were shocked. I mean, look, one day you think your father's running this multi billion dollar business and everything is fine and he's happy and they're happy and then all of a sudden the world comes crashing down. They saw me in years. The last time I cried like that was in the San Malls and I found out my son had cancer.

[Robert Krulwich]

Andrew, Bernie's youngest son, had been diagnosed with late five years earlier. He fought it and recovered fully. He considered changing jobs, but Bernie talked him into returning to work beside his dad, his brother, his uncle, his first cousin.

[Steve Fishman]

The family all got along well together and it was wonderful having them there. I mean, we were very close family. I was very proud of my sons. They were proud of me, you know, what I accomplished. They liked being a maid. Off they had. There was a lot of recognition in that, or he's respected in the industry before this happened. And they, they loved that. And I love having them in the business because they were successful at it. I kept them totally out of the loop. I mean, I didn't want them to be. I couldn't let them be part of the loop. And now all of a sudden, they realized that there was this other side that they didn't really know.

[Robert Krulwich]

As for what happened next, the afternoon.

[Steve Fishman]

I told them all, they immediately left. They went to a lawyer. The lawyer said, you gotta turn your father in. They went, did that, and then I.

[Robert Krulwich]

Never saw them again and didn't hear from them again until two years into Bernie's 150 year sentence. His oldest son, Mark, sent a message in the most horrible way. The chaplain came to get you and what does he bring you to the chapel.

[Steve Fishman]

Right.

[Robert Krulwich]

And Ruth's on the phone and she tells you.

[Steve Fishman]

Yeah, I cried for well over two weeks after he died.

[Robert Krulwich]

Mark Madoff killed himself at age 46. Hung himself with a dog leash in his Soho loft while his toddler slept in the room next door. The date, December 11, 2010, two years to the day after his father's arrest. To Bernie, Mark's message to him was clear. You ruined my life.

[Steve Fishman]

I tried. I tried in private because I did want to do it here. And if they saw me, if they saw me, they probably would have put me in a suicide watch, which is what they do. They were worried about me. They woke me up every hour on the hour to make sure that I was okay. The guards here, I was a bastard case.

[Robert Krulwich]

For weeks, Vernie told me he still hoped he could reach Andrew and explain. But Andrew's cancer returned. He blamed the relapse on his father's crimes. The stress and shame of it all. Andrew Madoff died in 2014.

[Steve Fishman]

I have tears in my eyes, and I'm totally used about certain things. And on a day goes by that I don't suffer, I may sound okay on the phone. Trust me, I'm not okay. It never will be.

[Robert Krulwich]

Bernie, though, is a survivor. Once he confessed to the largest Ponzi scheme in history. For him, the worst was over. It must have been something of a relief to finally be able to get this off your shoulder.

[Steve Fishman]

Oh, it was. I mean, I wish that I was caught earlier. I was under tremendous pressure. It was an absolute. It was a nightmare. Only for me. It was only a nightmare for me. Yeah, I Mean, you were looking down.

[Robert Krulwich]

The barrel of this for years. I guess you kind of knew it.

[Steve Fishman]

Would end up here.

[Robert Krulwich]

You know, where you are now, sooner or later.

[Steve Fishman]

When I say nightmare, that's a nightmare. Imagine not being able to tell anybody I destroyed the family. They said, why did you need to do this? And I said, I don't know. That's what I try and figure out here once a week. The psychologist. And fortunately, they have wonderful psychologists here and they're very helpful to me. Wow, that's great. That's great. Believe me, that's great. I have tearful sessions with her every week.

[Robert Krulwich]

A New Yorker and his shrink, seeking reassurance, searching for answers. Where does a monster come from?

[Steve Fishman]

I asked him, I mentioned, am I a sociopath? After I was seeing this, they said, you're absolutely not a sociopath. They said, you have morals, you have remorse.

[Robert Krulwich]

I came to think of my conversations with Bernie as a kind of session too. So I, I, Steve, just, I mean.

[Jad Abumrad]

I'm just curious, what are you thinking at this point as you're talking to him?

[Robert Krulwich]

I mean, we're running through his story and we've developed a kind of rapport. I mean, you know, there's a, a different generation, but Jewish roots, New York area. This is a guy who's familiar to me and I, and we develop a report and Bernie kind of tells me the story of his father and of how he got into this.

[Steve Fishman]

My father built a sporting goods business. He owned a company called Dodger Sporting Goods. He invented the Joe Palooka punching bags stand with a, on a metal rod. And he had a big successful business. And then during the Korean War, there was a steel shortage. He couldn't get steel and his business failed. So I lived through that. You watch that happen and you see your father, who you idolize, you build a big business and then lose everything. You're frightened about something like that happening.

[Robert Krulwich]

Bernie was determined to attain success, lasting success, the kind that had eluded his father. Whatever it took.

[Steve Fishman]

I started the company in 1960.

[Robert Krulwich]

22 years old, he convinces a handful of investors to trust him. Friend's parents, former customers of his high school lawn sprinkler business, clients of his father in law's accounting firm.

[Steve Fishman]

The first thing I did was I participated in a couple of new issues.

[Robert Krulwich]

New issues were hot in the 1960s, though, without the mad scramble and hype of today's IPOs. Back then there was no such thing. CNBC, no computers. With new issues, he thought he'd hit on a money making strategy.

[Steve Fishman]

And then the market cracked in 62. With the Cuban missile crisis, the whole new issue market went into the tank.

[Robert Krulwich]

Bernie lost almost all of his clients money. As he tells it, he was embarrassed, he was in tears. Ruth took him to her father. Bernie begged for a bailout. His father in law saved him. Bernie needed a better strategy.

[Steve Fishman]

We looked for some places where he could have an edge.

[Robert Krulwich]

The odds were against him. As he saw it, Bernie wasn't one of the Wall street elite. Did they make that clear that you know, you're not in the club and.

[Steve Fishman]

Oh yeah, I mean, it was obvious to everybody. I mean, everybody knew it. You know, we were a small firm, we weren't a member of the New York Stock Exchange. You know, it was very obvious.

[Jad Abumrad]

Steve says, that idea like of Bernie as that as a lower class kid from Queens who wanted to prove himself to the big boys and be accepted. Steve says that's one of the keys to really understanding how a guy like Bernie Madoff could have gotten into this gigantic fraud. Because when Bernie's business started to really take off, possibly increasingly through fraud, all of a sudden he had all of these guys from the big banks calling him up and wanting to take him out to lunch.

[Robert Krulwich]

By the mid-90s, word had spread. People clamored to put their money in Madoff's IA business.

[Steve Fishman]

So I opened up the individual accounts and people and I started taking in.

[Robert Krulwich]

These funds, hedge funds, bank funds and feeder funds created to funnel money to Madoff, who pumped out those incredibly consistent returns.

[Steve Fishman]

So all of a sudden, if you have all these major banks, it's flattering.

[Robert Krulwich]

It's flattering too.

[Steve Fishman]

All right, yeah, of course it is. It feeds your ego. I mean, you know, you say to yourself, all right, all of a sudden these banks, which wouldn't give you the time of day, some of them all of a sudden are willing to give you a billion dollars. I had all of these major banks coming down and entertaining me. Piss. It is a head trip.

[Robert Krulwich]

Everyone wanted to be with Bernie. Country club golfers, hedge funds, prestigious banks.

[Steve Fishman]

They said, we're going to start a fund, but we need you to commit to the money. I said, okay, I think I can do it. Because I thought that even if I started to short some of this stock to them, it would just be a matter of weeks or months and I'd be able to recover from it.

[Robert Krulwich]

According to Bernie, this was the turning point. The market went against him. The boy genius failed. And the deluge of money, that was his undoing. He couldn't move billions of dollars in and out of the market.

[Steve Fishman]

My mistake was I just should have left it at that. Instead, these funds just, you know, just kept on pouring money into me. And it was very hard to turn down.

[Robert Krulwich]

Irresistible for the young man once shut out of the club. I mean, I guess the other thing.

[Steve Fishman]

There is, you know, you had a.

[Robert Krulwich]

History of, you know, breaking up the. The country club at the New York Stock Exchange. Right. The market makers. And, you know, now in some sense, I guess you're. You're finally getting the recognition from those kind of same people that they need you.

[Steve Fishman]

Yeah, that's right. And then it just. It just. The whole thing sort of spun out of control.

[Jad Abumrad]

But let me just kind of get something out of the way. So a Ponzi scheme, which we sort of need to know. Ponzi scheme is I give you money to invest.

[Robert Krulwich]

Yeah.

[Jad Abumrad]

You pretend you invest that money, but you don't.

[Robert Krulwich]

Right.

[Jad Abumrad]

Instead what you do is you go out and you get new investors, take their money, give it to me, and then you go out and get even newer investors, take their money, give it to the ones before them, and on and on and on. So, like, all you're doing is just repositioning money, like taking it from the new guys, giving it to the slightly less new guys, making it look like you're trading when you're not. And it only works as long as you have new people coming in. You need a constant stream of new people coming in with new money. But that all sort of fell apart in 2008.

[Robert Krulwich]

2008, when we had a huge stock market crash. Bernie woke up after decades of getting a lot of money in. All of a sudden, one day, people said, I want my money back. Achoo, me too. Me too. And he had not done anything except expect more money to come through the front door. On that day, there was no money coming in the front door.

[Steve Fishman]

It just. The whole thing sort of spun out of control.

[Robert Krulwich]

And so Bernie's version, the fraud started because impressive people threw money at him. A good person who made a mistake. And we spent hours talking about this. And it seems to me at some point that there's always going to be that next phone call. But there's that gap. You know, 15 minutes I have to wait until the phone rings. And one time the phone doesn't ring, Bernie doesn't call back. And I get from the prison a letter basically explaining that I have been declared a security risk. What does a security risk mean? I have no idea. And, you know, it's some kind of catch all. I mean, I try to appeal that to the Bureau of Prisons. It's unappealable. So basically, the warden says, you know, we don't want this. There's a hassle. You know, he's a security risk. He can't talk to him. And just to synopsize, just. So at this point, having spent a hunk of time, you went into this thinking, okay, I'm gonna sit in his shoes and I'm gonna feel him, and where are you right now at this point? So now I've spoken to him for three or more hours, and, you know, I've taken this journey with him. I've heard his story, and, you know, I have felt some empathy for Bernie from his point of view. And so now I start to listen to the tapes, and I start to really kind of dig in. And it occurs to me that Bernie's telling me two stories. Bernie Madoff, on one hand, is this wizard conducting this incredible financial criminal wizardry, a mastermind. And on the other hand, he's this kind of pawn. Pawn, in other words, you normally associate with Bernie Madoff.

[Jad Abumrad]

No, and actually, that's more on that after the break, because what ends up happening. One of the cool revelations of this series is the way in which Bernie actually sees himself as a victim. And it's here where the story sort of starts to expand beyond him and you start to sort of see a.

[Steve Fishman]

Much bigger field of play.

[Jad Abumrad]

Yeah, that's coming up after the break.

[Robert Krulwich]

This is Alicia Burn Bridges calling from Saskatoon in Saskatchewan. Radiolab is supported in part by the Alfred P. Sloan foundation, enhancing public understanding of science and technology in the modern world. More information about [e-mail].

[Jad Abumrad]

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[Robert Krulwich]

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[Robert Krulwich]

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By going to joinbuilt.com Radiolab that's J-O-I-N-B-I-L-T.com Radiolab.

[Jad Abumrad]

Hey, I'm Molly Webster, and this is an ad by BetterHelp. So it happens every year. The seasons are changing, the days are getting shorter, and basically, once it becomes dark outside of my window. Feel like the rest of the world disappears and I'm just alone and there's nothing left to do but watch television. This November, Better Help is asking everyone to reach out to our people. That could be your family, your friends, your neighbors, and to resist this call of the cocoon. And yeah, reaching out can take some courage. I've got text messages from January I haven't responded to and you know what? I'm gonna write them back right now. Hi, sorry I've been missing. How are you? Why don't we all do this sooner? Therapy is the same way. BetterHelp makes it easier to take that first step. You just fill out a short questionnaire and they find a licensed therapist who they think you'll like. Our listeners get 10% off their first month at betterhelp.com Radiolab that's better H E L P.com Radiolab Radiolab is supported by Rippling Finance teams often spend weeks chasing receipts, reconciling spreadsheets and fixing errors across disconnected spend tools. This can be frustrating, and that's not software as a service. That's sad software as a disservice. If you've been thinking about replacing stitched together tech stacks with one platform for all departments, Rippling can help. Rippling is a unified platform for global hr, payroll, IT and finance, helping people replace their mess of cobbled together tools with one system designed to help give leaders clarity, speed and control. By uniting employees, teams and departments in one system, Rippling works to remove the bottlenecks, busy work and silos in business software. With Rippling, you can choose to run hr, IT and finance operations as one, or pick and choose the products that best fill the gaps. Right now, you can get 6 months free when you go to rippling.com. learn more at R-I P P L-I-N-G.com Radiolab terms and conditions apply. Radiolab is supported by Planet Visionaries, the podcast created in partnership with the Rolex Perpetual Planet Initiative. The show is hosted by Alex Honnold, who you may recognize from Free Solo, where he climbed El Capitan without ropes, and now he's turning his focus to the biggest challenge of protecting the only planet we've got. Every episode brings you stories that prove climate optimism isn't naive, it's a strategy. The episodes span the globe, from Arctic scientists and Amazon forest guardians to entrepreneurs reimagining fashion and food systems. You'll hear from explorers, scientists, activists and storytellers who are working to reshape the future in practical human ways. In one episode, Alex sits down with wildlife photographer Bertie Gregory to discuss how animals can teach humans resiliency, empathy and hope. In partnership with the Rolex Perpetual Planet initiative. Check out Planet Visionaries Listen or watch on Apple, Spotify, YouTube, or wherever you get your podcasts. Hey, I'm Jad Abumrad.

[Robert Krulwich]

I'm Robert Krylwich.

[Jad Abumrad]

This is Radiolab. Today we're playing a series of excerpts from a brand new series from Audible called Ponzi Supernova comes from reporter Steve Fishman and Ellen Horn, our former executive producer. And it's a series about Bernie Madoff and the largest financial fraud in history. It's sort of a behind the scenes look and in this series there's lots of really kind of crazy, frankly, descriptions of how Bernie Madoff and his team pulled it off and how on many occasions they almost got caught.

[Robert Krulwich]

Former U.S. attorney Matthew Schwartz told me about one of the closest of the close calls, one starring Frank De Pascali. Madoff's top lieutenant, Dee Pascali testifies that he's sitting in a conference room with the auditors. They ask for this report called a siac. SIAC report. So picture it. A conference room full of auditors. One asks for this routine report, something a legitimate trading firm would have on the shelf. Of course, Madoff isn't a legitimate trading firm, so they don't have it. Think quick, Frank, and be cool in front of the auditors. Frank phones the computer programmers and says, hey, can you bring up the SIAC reports? And the guy says, basically the CYC report. You told us we didn't need the CYC report. Where the hell am I going to get a SIAC report? And he says, great, I'll see you in 10 minutes. And then he does, as he described it, a little soft chew to stall for time. Meanwhile, the team has minutes to prepare a false report and then make it appear as if it's been idling on a shelf. They're frantically putting together an printing out this report which is, you know, it's half a foot thick of this big paper, dot matrix paper, and then it's supposed to be a report that's been lying around for a month and instead it's hot off the presses. So first they stick it in a refrigerator that's down in the investment advisory business to cool it off. And then they literally place football with it. They're tossing it around the room to one another to make it look weathered, and then they run it up to Deepascally. Mr. Deepascali, here's the SIAC report, who coolly hands it to the auditors. They're close calls over and over again. It's fabulous theater.

[Jad Abumrad]

Steve actually described Bernie Madoff's operation, you know, that created like this massive $65 billion fraud as like super rickety, basically held together by tape and safety pins and old dot matrix printers. And their series goes into a lot of detail about sort of the mechanics and how it worked. What caught our attention was the thing that we sort of mentioned before the break, this idea that Bernie saw himself not as this, like all powerful criminal mastermind, but as kind of a pawn.

[Robert Krulwich]

Yeah. There was an original group of investors that Bernie Madoff found, and this group is called the Big Four. That's exactly right. The Big Four. They came to be known. Even Madoff calls them the Big Four.

[Steve Fishman]

I had four prime big clients, Jeffrey Picower, Norman Levy, Carl Shapiro, and Stanley Chase, commonly referred to as the Big Four.

[Robert Krulwich]

It was very clear that those accounts, in particular Shapiro, Levy, Pickower, and chase.

[Jad Abumrad]

Former Assistant U.S. attorney Matt Schwartz again.

[Robert Krulwich]

Were handled very differently from other accounts and were handled in a way that, you know, it mattered less if there was a mistake. For these accounts, the workmanship was quite different. More demanding, less exacting. Some employees were more meticulous than others, and some clients you could afford to be less meticulous with. Annette Bonjourno had been there a long time. She was employee number one in the Ponzi business. Garfinkel told me she handled the accounts of the Big Four.

[Jad Abumrad]

Steve Garfinkel was one of the FBI agents who investigated Bernie Madoff's operation.

[Robert Krulwich]

Annette's clients, the way she fagazi their account statements. There were some instances when the customers got their account statements from Annette and complained that, oh, my, you know, you promised me, you know, 18% and I only got 16%. And they sent this, the statement back to Annette. So then she would do a new statement when miraculously you got the. Your new statement with the new higher return. Madoff himself says the accounts of the Big Four were fagazied.

[Steve Fishman]

They were doing all sorts of schmadre, trades, it's a Jewish term that we use, where they were, you know, taking lost trades. And the stuff that they did was unbelievable, and they were doing it through me.

[Robert Krulwich]

They demanded Bernie do kinkier maneuvers. Stanley Chase, for example, there was explicit testimony that he would not tolerate a single losing trade in his accounts. And he had a particular trading strategy where sometimes you could have a losing leg of a trade, but the trade as a whole was a winner. Because it was a three legged trade. He wouldn't even tolerate that for some reason. Every single trade, every single leg of every single trade had to be a winner. That doesn't happen in real life, and no one can demand that of their money manager. Each of the Big Four paid back millions. In Picower's case, billions of dollars. Every one of them claimed Madoff had duped them. They weren't prosecuted and it's impossible for Schwartz to say for certain who knew what. What he can say is there was activity in the accounts of the Big Four that I think would raise questions in the eyes of anyone. Now, you might believe that your genius money manager can get you 700% return in a good year, but no one has the ability to rewrite history and turn stocks into bonds. And so these men, mostly older, powerful mentors to Madoff, opened for me a new door into the Madoff Ponzi operation. They gave Bernie his break and then demanded that he provide them things he couldn't honestly achieve. These people are these people, and by that I mean the Big Four, whether it's them personally or their lieutenants or whoever it is, they are asking for things that are not possible. Bernie is accomplishing those things. So now ask yourself, who has the power in that relationship? Is it Bernie because he knows he's doing illegal things for these parties? Or is it the party who's now making Bernie do illegal things?

[Steve Fishman]

Things?

[Robert Krulwich]

It's both of them. Well, when Bernie said to you, gosh, like, I discovered that people are really greedy, Remember, that was in the beginning. Is this what he means, that these people were using him? This is what Bernie means. And Bernie has actually a particular enmity for those big four. One of them, Jeffrey Pickower, took out $7 billion. $7 billion from this scheme right beyond what he invested.

[Jad Abumrad]

That's Ellen Horn, who produced the series. Now, the story of Jeffrey Pickauer is one of the more dramatic moments in the series.

[Steve Fishman]

What's going on? He must have collapsed. I can't get him out. I can't get him to move and I don't know how long he's been in there.

[Robert Krulwich]

Ten months after Bernie Madoff's arrest. Barbara Pickauer WIFE of Madoff largest investor Jeffrey Pickauer dialed 911 at the bottom of the pool.

[Steve Fishman]

At the bottom of the pool, that movie.

[Robert Krulwich]

This call is hard to listen to. It's upsetting.

[Steve Fishman]

Okay, stay on the line. I'm going to start the medics to you. Don't hang up. Okay, I'm going to put your speaker So I could try to help. Take a mask.

[Jad Abumrad]

Okay?

[Steve Fishman]

The fact that Jeffrey Pickell had a heart attack and drowned in its pool, you can congratulate me on that.

[Robert Krulwich]

According to Madoff, before Pickauer went for his final swim, Bernie phoned him.

[Steve Fishman]

I called up Jeffrey Pickauer and, you know, I said, you got to give the money back. I said, you guys owe me money, and I want the money back. Pick our, you know, said, well, you know, I don't have it all. I said, jeffrey, I know that you have the money there. You're worth $9 billion, and I want 7 billion back.

[Robert Krulwich]

Consider what Madoff's tone regarding the death of someone he knew for decades, what this says about Bernie Madoff, who he is. Whenever someone hears that I interviewed Madoff, they always want to know, does Bernie feel remorse? I've interviewed serial serial killers, child rapists, people considered monsters. I suspended judgment. I wanted to hear their stories, to understand them. This doesn't mean I wasn't horrified by what I heard, but I tried to see the world through their eyes and exercise in empathy. At times, I feel empathy for Bernie. But here's what struck me about Bernie. He didn't feel empathy. He claimed to feel remorse. He mouthed the words but. There was always a but.

[Steve Fishman]

Look, none of my clients could, even if they lost every penny they put in there, could plead poverty. Doesn't mean that I'm excusing what I did. It doesn't mean I don't feel sorry for him. You had to have a certain net worth to be a client. They were told time and time again that, you know, they should not put more than 50% of their marketable investments with me on all of their confirmation, on all their statements. They saw there were. There were things that they signed that basically they knew that this kind of trading is speculative. And believe me, if you don't think they had doubts, they had doubts.

[Robert Krulwich]

On the phone with me. Every single time Bernie mentions victims, he can barely get through the apology before interrupting himself. They were warned. They were greedy, always this strange, sorry, not sorry.

[Steve Fishman]

Yeah. I said, brokerage firms can fail. I could go crazy and do something stupid. I said, it's, you know, if you want a guarantee, you know, put your money in government bonds.

[Robert Krulwich]

It's impossible to tell the story of the fall of the House of Madoff without understanding that there were real victims, real suffering. Back in early 2009, victims were telling stories of their ruined lives on TV, on the radio, on every local talk show. It was the worst thing that ever happened to us.

[Steve Fishman]

This can't be real. We have lost everything. I have lost everything, and you've lost everything.

[Robert Krulwich]

Everything that we work for is down the drain.

[Steve Fishman]

I manage on food stamps. Sometimes at the end of the month, I scavenge in dumpsters. Now, of course, you listen to them. They're all. They're living out of dumpsters and they're. They, you know, they don't have any money and so on and so forth. And I'm sure it's a. It's a traumatic experience to some, but, you know, I made a lot of money for a lot of people.

[Robert Krulwich]

Did you catch the remorse or was it too fleeting to register in your brain? My producers and I were in touch with dozens of victims. To the victims, Bernie's indifference was enraging all over again. But it wasn't the slightest bit surprising. What is surprising is what happened to victims since Madoff dragged their $65 billion down a dark hole. I mean, there is now, this is eight, nine years later. There is an industry that is created around the Madoff collapse. There are hundreds of lawyers working on recovering money. And that's a very complicated story, and one we try and tell, because you know what? A lot of people who lost money didn't have any inclination, couldn't have had any inkling that this was going on. So the Justice Group comes in private lawyers, courts, judges, the Justice Department, and they try to make amends. Have they? Justice is a very complicated issue. In the universe created by Bernie Madoff, you have a trustee appointed to recover funds for victims. Well, some of those funds went to people who took those funds in good faith. They'd given Bernie millions of dollars. They took out a million plus one. And so they thought they were doing the right thing. They thought it was their money. But we've got to give money back to the people who lost more money than they put in. You're going to have to give some of your money to them. So it's a very complicated moral universe. Well, there's the individuals. And then last category, there are the banks and the investment institutions that sold Bernie to ordinary people all over the world. Yeah, there are these financial institutions, hedge funds, raised billions of dollars, took them to Latin America, to Europe, all across the United States, marketing Bernie Madoff as a safe bet. He was weaponized by the financial system. And so we wondered, why weren't they those hedge funds accountable for not doing their job? Yeah. And this is the still, still happening, still unraveling, still needs to be reported part of the story.

[Jad Abumrad]

Absolutely. That question about why the people who, quote, weaponized Bernie Madoff haven't been punished yet, probably will never be punished. That is something that Ellen Horn and Steve Fishman tackle in the final episode in their series. And we definitely recommend you check it [e-mail] ponzisupernova we'll link you there as well from Radiolab.org and thank you to.

[Robert Krulwich]

Steven Fishman and to Ellen Horn for sharing this work of theirs with us.

[Jad Abumrad]

Also, a shout out to producer Kelly prime, who helped Ellen and Steve work on the series.

[Robert Krulwich]

Yeah. So thank you, Audible. Thank you for listening.

[Jad Abumrad]

I'm Jim. Jad Abumrad.

[Robert Krulwich]

I'm Robert Krulwich.

[Jad Abumrad]

We'll see you. We'll see you next time. Yeah. Hi. This is Logan from Hamilton, Montana. Radiolab is produced by Jad Abumrad. Dylan Keefe is our director of sound design. Soren Wheeler is senior editor. Jamie York is our senior producer. Our staff includes Simon Adler, Brenna Farrell, David Gabelle, Matt Kielty, Robert Krulowich, Annie McEwen, Lateef Nasser, Melissa O', Donnell, Arianne Wack and Molly Webster, with help from Tracy Hunt, Valentina Boanini, Nigar Fatali, Phoebe.

[Robert Krulwich]

Wang and Katie Ferguson.

[Jad Abumrad]

Our fact checker is Michelle Harris.