Madoff’s Country Clubbers Smiled $50 Billion Ago

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Madoff’s Country Clubbers Smiled $50 Billion Ago: Susan Antilla
Commentary by Susan Antilla


Dec. 15 (Bloomberg) -- On June 18, 1991, a balmy late spring day on the North Shore of New York’s Long Island, stockbroker Pamela Martens sat on the patio of an exclusive local country club, meeting with a client for the first time.

Martens would be taking over management of the customer’s municipal-bond portfolio, but was alarmed when she heard how the man had invested the rest of his nest egg.

“He told me that the bulk of his money was with Bernie Madoff, and that Madoff guarantees a 13 percent a year return,” Martens recalls. “I said, ‘First of all, that’s impossible, and second of all, that’s illegal.’”

Not to worry, the investor assured her. He and many other members of the country club had happily stashed money away with Madoff for years, pocketing regular monthly checks.

Martens, a whistleblower who five years later launched the unrelated “Boom Boom Room” sex-discrimination lawsuit against Smith Barney, got copies of the man’s brokerage statements and phoned Madoff.

“I said, ‘I’m looking at Mr. X’s statements, and it’s clear you’re not doing anything here that generated 13 percent a year,’” she recalls. “He said, ‘No one has ever dared question what I’m doing.’”

And, happily for Madoff, any time someone did question him, the probes were all but ignored. It took a first-person confession by Madoff to his employees before law enforcement officials swept in with an arrest and charges of a scam.

Madoff’s arrest last week for an alleged $50 billion Ponzi scheme is but the latest example of how financial players in high places can go for years fudging the rules and getting by without paying the price. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601039&sid=ajTlcTh7XnYA&refer=home