Madoff Seeks to Spread Blame for Fraud

Bernard Madoff has sought to spread blame for his $65 billion Ponzi scheme to banks, regulators and some of his oldest business associates in a rambling jailhouse interview.

Bernie Madoff
Bernie Madoff

The disgraced US financier offered little evidence for his claims and admitted he had lied to investors and relatives for at least 16 years before he confessed to federal authorities in 2008 and was sentenced to serve 150 years.

However, Madoff, 72, maintained that banks including JPMorgan Chase, primary banker for his firm, Bernard L Madoff Investment Securities, possessed sufficient account information to detect suspicious activity. He levelled similar accusations against regulators.

"I am not a banker but I know that $100 billion going in and out of a bank account is something that should alert you to something," he said at the federal prison in Butner, North Carolina. "JPMorgan got all the financial statements."

Madoff alleged: "There were senior people at the bank who knew what was going on." However, he did not name the people or provide any further details.

Irving Picard, the trustee liquidating Madoff's firm, filed a lawsuit in December 2010 against JPMorgan, seeking $6.4 billion on the grounds that the bank was "wilfully blind to the fraud" and "complicit in it".

Madoff said: "JPMorgan doesn't have a chance in hell of not coming up with a big settlement."

JPMorgan denied any wrongdoing. "JPMorgan complied fully with all applicable laws and regulations governing customer accounts," it said. "Madoff's assertion that JPMorgan employees 'knew what was going on' is patently false."

Madoff also predicted that two other banks being sued by Mr Picard, HSBC and UBS, "are going to have big problems". Mr Picard is seeking $9 billion from HSBC and $2 billion from UBS. Both banks denied any wrongdoing or knowledge of Madoff's fraud.

Madoff claimed that four of his earliest investors - Jeffry Picower, Stanley Chais, Norman Levy and Carl Shapiro - helped recruit customers for his firm in the late 1980s when Madoff claims he was having difficulty unwinding positions in the markets. "They were complicit, all of them," Madoff said. "Which is why they are all settling."

Mr Picard has sued all four men or their estates. Mr Picower is dead and his estate settled with Mr Picard for $7.2 billion. Mr Shapiro, who is still alive, settled for $625 million. Mr Levy's estate settled for $220 million; he died in 2005. Mr Chais is dead and his family has not settled. Lawyers for all four men have said their clients were unaware of Madoff's fraud.

Madoff cried at mention of his wife Ruth, and his son, Mark, who committed suicide last year. "Nothing that I say should be taken as an excuse for my behaviour," he said. "I take full responsibility for what I did."