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

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.

Financier Bernard Madoff (R) with his sons Mark Madoff (L) and Andrew Madoff (C) during July 2001 in Montauk, NY.
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Financier Bernard Madoff (R) with his sons Mark Madoff (L) and Andrew Madoff (C) during July 2001 in Montauk, NY.

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.” No 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 the last name of her and 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 schemehe 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 litigationhad 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 anonymously published.

“I haven’t gotten anything from them this week,” he said.