Bernie Madoff’s Empire of Deception with Brent Pella and Joey Dardano | 91

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Besties, you know that song, I'm Looking for a Man in Finance, 6'5, Blue Eyes?

Well, what if I told you I found him?

Yeah, he's in finance.

He's got blue eyes, but he's not 6'5.

Is that a deal breaker?

No?

Great.

What if I also told you he was the mastermind behind a multi-billion dollar

Ponzi scheme.

Still not a deal breaker?

Besties, we may have to re-examine your standards, but I think you may know him.

The name Bernie Madoff rang a bell?

Uh-huh.

Let's get into it, Besties.

He amassed the trappings of wealth, a penthouse apartment, summer homes, boats, and designer clothing.

Madoff conducted a $65 billion fraud that left thousands of victims financially shattered.

The FBI arrested him this morning after he told senior employees yesterday that his business was a giant Ponzi scheme.

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what if i told you that the crime of the century is happening right now from coast to coast people are fleeing flames wind and water nature is telling us i can't take this anymore these are the stories we need to be telling about our changing planet.

Stories of scams, murders, and cover-ups, and the things we're doing to either protect the Earth or destroy it.

This is Lawless Planet.

Follow Lawless Planet on the Wondery app or wherever you get your podcasts.

From Wonderry and at Will Media, this is the Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

I'm your host, Misha Brown, social media superstar and the sassiest short seller of flops at your bestie, Misha.

And on our show today, I'm very, very excited because we have some comedians.

They are digital creators and you can catch them on Wild Not.

It's Brent Pella and Joey Dardano.

So, okay, not to get too personal real early on, but what's the most money you've ever lost and how did you lose it?

Ooh, Ooh, the most money.

I think I lost a solid couple grand during the NFT era a couple years ago.

Oh, man.

Cause I just, I love me some pixelated pictures of monkeys.

We just learned a lot about you, dude.

Just in one sentence.

I'm a team player and I play on the losing team as often as possible.

I'm going to back you up here.

I, I, mine's crypto related too.

I bought a bunch of this one coin, Cardano, because my name's Dardano, and my, and my brothers and I were like, yeah, yeah.

And, uh, and my brother made me put it in some wallet.

My brother's a tech guy, made me put it in a wallet, lost the password, $1,500, gone.

Oh,

buddy.

Yeah.

Can't find it anywhere.

That's rough.

Well, today we're talking about Bernie Madoff.

He's the man who made Ponzi schemes mainstream, really.

For a long time, Bernie, he was on top of the world, but his success was built upon the ultimate house of cards.

So let's go back to the beginning.

Bernard L.

Madoff was born in the city.

Thank you.

Put some respect on that name.

No, don't show him respect.

You ruin lives.

Hey,

he was ahead of his time.

Yeah, actually, you're right.

If he did this now, he would just get pardoned.

Keep going.

Yeah.

Well, he was born in 1938 in Brooklyn.

His parents, Ralph and Sylvia, are the children of immigrants.

And Ralph and Sylvia, they get married right in the middle of the Great Depression.

His dad gets work as a plumber, but the family often struggles to make ends meet.

You know, times are tough.

It's called the Great Depression for a reason.

Growing up, Bernie loves swimming.

He's actually on the swim team at school, and eventually he uses his aquatic skills to get a job as a lifeguard at a club out on Long Island.

In 1959, Bernie marries his high school sweetheart, Ruth, and in 1960, at the age of 22, he starts his own company, Bernard L.

Madoff Investment Securities.

But that took him a long time to come up with that one.

He founds the company using $5,000 he saved up from Lifeguard Gig and also from installing lawn sprinklers.

So okay.

So

he did some hard work.

Yeah.

I mean, I think those oranges are about as humble as they get.

Yeah.

Okay.

So, okay.

Now I'm rooting for him.

I wonder if he does anything bad later.

I don't know.

Well, let's take a look at a young Bernie.

Oh, shit, it's hot.

Holy shit.

That's Joey without a mustache.

That's crazy.

Oh, actually, I feel, hold on.

Yo.

Oh, he's kind of giving like a bit of a smirk with his left eye.

Like he's like, yeah, he's looking like, eh, I'm going to get your money.

Yeah, you already know it's Big Bernie.

I'm going to get in your pockets.

They call me Buddy Bernard.

Yeah, there's a twinkle behind the eyes, a little secret he's holding.

Does it seem like he's the future mastermind of a massive Bonzi scheme?

Yeah.

Look at that smirk.

What are you talking about?

Can't be trusted.

So Bernie, he starts off selling penny stocks, helping people buy low-value bargain basement shares.

But Bernie doesn't want to be dealing in pennies his whole life, right?

He wants to get out of that bargain basement and be a fancy investor.

And so in 1962, he starts a new side of his business working as a money manager.

Right.

So clients trust him with their money and he invests it for them.

There you go.

So one way that he gets a lot of his early clients is through his father-in-law, his wife, Ruth's dad, is an accountant, and he sends his pals over to invest their money with Bernie.

So he's like a little bit of a Nepo baby-in-law.

I was going to say, does that count as Nepo?

Because that's like he married into nepotism.

Still counts.

I think it still counts.

Yeah, actually, because they met when they were young.

So he knew what he was doing.

He knew.

Yeah.

He knew.

So, but things, they go south kind of quickly.

When Bernie makes his first bad trade, he loses about $3,000 of his father-in-law's friends' money.

So that's,

it was about, that's like $30,000 in today money.

Nah, but family dinner that week sucked.

So awkward, right?

Yeah.

I bet you his father-in-law was like, can you pass the potatoes?

And I don't know, like three grand.

Should never have bought that photograph of a monkey.

You know,

$30,000 in today money doesn't sound like a lot, but he's a super young investor and just starting off.

So I think this was probably a pretty big blow for him.

No,

that's bad.

Well, what does he do?

He makes up a fake trade to cover up his mistake and save himself from being embarrassed.

Hell yeah.

Yeah.

Basically, he's telling his clients, hey, you didn't lose any money when they actually did and crossing his fingers that he'll somehow be able to make up the missing cash at some point later on before anybody notices.

What's the most elaborate way you've ever prevented yourself from being embarrassed?

Ooh, maybe, maybe just completely moving away from home and not talking to anybody that I knew from a certain period of time.

What do you think about that?

Reinventing myself to do comedy so that people would laugh at me purposefully instead of making me feel like I'm the butt of a joke.

What's the most elaborate thing I did to cover embarrassment?

I don't know.

Change my whole personality, go on stage, and act confident.

Yeah, yeah.

I know, right?

My theater career wasn't working out.

And instead of getting a real job, I got TikTok famous.

So I'm thinking about that.

There you go.

Well, I feel like we all bonded right there.

I know.

No, it's nice.

But with Bernie's little lie, he's planted seeds of the charade that will one day grow into the biggest Ponzi scheme of all time.

So let's pause for a second and talk about Ponzi schemes.

Yeah.

What do you know about them?

Pretty cool.

Pretty fun.

If you do it right and you don't get caught, it could be a real good time for you.

You keep bringing money in and then you use that money and then you bring more money.

You keep a little for yourself because you're doing all the work of bringing the money in.

You might as well have a little bit for yourself.

Absolutely.

For someone not in business, that sounds like a business.

Yeah.

Yeah, to be fair.

That just sounds like how a business is.

Oh, we need more money to pay back people who we owe.

I'm going to bring in more money.

Yeah.

Truthfully, where's the miscommunication there?

Right.

Basically, a Ponzi scheme is a scam where you claim you're investing money for your clients, but what you're really doing is taking new clients' money and using it to pay back those earlier investments.

Okay, so it's the lack of investments that's the issue.

Yes, yes.

All right.

You give me $2 and I say, I'll be able to give you back $4.

So now I need to find two more people who will be able to give me $2 so I have enough to pay you back.

So in order to keep a Ponzi scheme going, like you said, you need to keep bringing in money.

You need to keep bringing in new clients to give you their money.

It's like running on a treadmill, but the only way to keep the treadmill going is to set the speed higher and higher.

And also, if you stop and fall off, you go to prison.

How does Bernie keep building this Ponzi scheme?

Well, it turns out it was pretty easy to convince his father-in-law's friends that he was doing a great job managing their cash.

So he figures, why not just kick the bluffing into overdrive?

So Bernie slowly brings more and more investors into his money managing business.

And he starts by roping in people in his social circles, first as family members, friends, then acquaintances, colleagues.

So everybody's fair game to good old Burns.

Yeah.

And to start, people, they weren't giving him huge amounts of money.

We're talking a few thousand dollars per investor.

Though, of course, as it grows, so does the amount of money that Bernie's able to bring in.

Now, if he were actually investing and managing this money correctly, there'd be no problem here.

But because he's already gotten into the habit of lying, it quickly becomes a fraud snowball that gets bigger and bigger as it rolls down a hill of scams.

So, what do you think it is about Bernie that makes people trust him?

That little smirk.

He's got a vibe, dude.

He's got

a certain type of vibe.

He's got a good look about him, man.

He's got a good vibe.

Yeah.

You can just, there's something about the eyes.

Yeah.

Just seems like

cozy.

I feel like Brent and I really caught on to Bernie's vibe kind of immediately.

Yeah, I think that one photo.

Yeah.

Well, actually, one of the largest keys to Bernie's success is the exclusivity of it all.

So Bernie wants to attract a specific type of person to invest with him.

He's going after the kinds of people he meets at country clubs and other elite settings.

And he's not just targeting those folks because they're the ones that have, you know, all of the money, but it's also because those people will make him seem more legit.

So one of the main ways Bernie brings in these elite investors is by playing hard to get.

Yeah, when people come to him asking to invest money, he'll often turn them down at first.

Oh, you want to give me hundreds of thousands of dollars to invest?

So so kind of you to offer but i couldn't possibly he's like a streetwear brand but for

investing money does that does that does that scale does that make sense sure yeah uh you want it but you can't you can't buy it oh no not because you can't afford it we don't have enough yeah we don't have enough

oh i also gave away half of it to famous people yeah

yeah it's it's kind of a brilliant marketing strategy if bernie's out begging people to trust him with their money that looks desperate suspicious but if he doesn't want to take your money, he must have more money than he knows what to do with, right?

Yep.

Yep.

And the strategy works.

Eventually, celebs like Larry King, Steven Spielberg, even Kevin Bacon signs up to invest with Bernie.

That's right.

Kevin Bacon trusted him with that foot loose money.

Damn, Kevin.

But then Bernie's too foot loose with the money.

Ah, and Kevin is only one degree of separation away from parting parting with his cat.

Think about it.

Steven Spielberg had a close encounter with the turd kind

because he was

shitty with his money.

Okay.

Yeah, there you go.

That works.

That's good.

That's good.

Yeah, it gets to a point when Bernie takes you on as a client.

It's seen as a mark of prestige.

So people spread the word about investing with Bernie and it's word of mouth.

Everybody wants to make a connection and get in with him.

So now it's important to note that Bernie's not just running the scammy money management side of his business.

Some parts of his operation were actually legit.

It's like the mullet of scams, like legit business in the front, Ponzi scheme in the back.

But there is something pretty interesting about the legit part, and that's that his brother Peter starts working at the firm as the compliance officer.

No, he got his brother involved.

Yes, he gets the whole family involved.

And if I was doing anything illegal, I would keep all loved ones and family away.

Away from it.

Yeah.

So his brother was actually the compliance officer, aka the person who's supposed to make sure that nothing shady is going on.

Right.

Bernie also brings in his two sons, Mark and Andrew, to work on the lawful side of

man.

He's bringing everyone down.

Yeah.

It's the Titanic of

investment firms.

But like I said, this legit business, it was pretty successful.

He started using computer technology for stock trading in the 1970s, sometime before other businesses even knew how to do that.

So the use of computers lets Bernie's firm make stock trades faster and for way less money.

And it pays off big for him.

In just about two decades, almost 10%

of all trades of stocks on the New York Stock Exchange go through Madoff's company.

That's a massive amount of the market.

So big, big money.

But even though his legitimate trades are going pretty well, he's already in deep with his under the radar fraud scheme and there's no going back.

Or who knows?

Maybe he likes the thrill of keeping this absolutely insane secret.

I don't know.

But while we're here, let's take a look at a photo of Bernie from around this time.

Ah, that's the same thing.

Same smirk.

Same smirk.

Same smirk, same twinkle.

Dude, what if it was just like his fetish?

Like, that's his fetish was just like lying to people.

It just turned him on.

Yeah, that might have been his thing.

It might not have even have been about the money.

He might just like go home every night and get so turned on like lying to people.

Yeah, but actually also, here's the thing.

Look at that face.

I wouldn't think he's messing with.

I wouldn't think he's lying.

Right.

We're joking about his little smirk and twinkle knowing what we know now, but that is a charismatic guy.

Totally.

He looks like the worst he would do is talk to you about baseball for an hour.

Yeah.

Like this guy looks like the worst thing he ever does is just want one more beer.

Like, oh, well, you want to have one?

You have like, want to have a little bit more fun?

All right, man.

Yeah.

I'm going to miss my train, but he looks like he'll give you great advice after you mess something up.

You know, oh, yeah.

Like, he's going to make it all okay.

He looks like the dude you called.

Dude, he looks like one of the Sandlot kids all grown up.

That's great.

Besties.

Bernie may be legendary for his Ponzi scheme, but did you you know there was once an actual person named Charles Ponzi whose scam was so big he got the whole thing named after him?

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Well, even though he's got a trusting face, Bernie's Ponzi scheme is about to suddenly get a whole lot bigger when he gets access to a major new source of cash.

Do you have any guesses what Bernard's brand new piggy bank is?

George Soros, the government.

The government?

That's a good guess.

Well, in 1989, Bernie's scheme levels up when he gets connected to a major investment firm in Connecticut.

I know.

No, nothing more thrilling than the words investment firm in Connecticut.

Yeah.

But But stick with me for a minute.

The firm starts by giving Bernie $4 million to invest for them, but eventually they wind up sending over $7 billion

his way.

Wait, what?

Wow.

We've been talking about millions up until this point.

But this connection also opens up the door to other investment firms and hedge funds sending money Bernie's way.

That is a lot of digital monkeys.

Lots of NFTs.

And that makes Bernie's life a lot easier because these firms are basically doing the work of finding new people to rope into the Ponzi scheme for him.

By the way, this Connecticut firm we're talking about, it's never convicted of any crimes and still exists today.

And Bernie, he's living large off of his ill-gotten gains.

He's got three yachts.

His wife Ruth has a jewelry collection that's worth almost $3 million.

And they own four homes, including a pad on the French Riviera and a penthouse in New York.

Wow.

Well, now we might be asking ourselves, hello, why doesn't anybody notice that Bernie's running a Bonzi scheme?

And one reason is that Bernie doesn't get too crazy with the amount of money he claims he's making for his clients, right?

They're getting returns of like 10 to 20% per year, which is good, but not so outrageous that it's raising eyebrows.

He also makes sure that if anyone ever asks to cash out their investment, he always has the money to give them.

Well, you know, their money.

It's actually, of course, new investors' cash.

Good business plan.

Yeah.

Yeah.

What's your stance on trusting other people with your money?

I don't know.

Zero.

Hard zero.

I don't do that.

Hard zero.

I don't even trust myself with my money.

I have a business manager.

Her name is Deborah.

And her job,

she doesn't touch my money.

She just yells at me about how I spend it.

And that's all I want.

Yeah.

So yeah, Bernie is also very careful about making sure that all the phony statements he's sending out to his clients look totally legit.

Like he wants to make sure that if investors start comparing notes with each other, all the numbers they add up.

And one way that Bernie does this is actually so simple, it's actually kind of genius.

Each month, he just looks at the stocks that did the best over the previous month, and then he creates fake statements that say he invested his clients' money into those companies.

So, it's like telling people

awards perfectly when really I just filled out my ballot after that.

He knew that no one would check on it because he was like, the IRS wouldn't pay to call internationally and like check on these trades that he's doing.

Oh, I don't know, but that's interesting.

I read the file on the FBI's website.

Nice.

I actually can't believe the FBI just had a

separate page for just this.

They're like, so you're here for Bernie Madoff.

Let me do it with another.

So besides Bernie just doctoring pretty simple documents, his personality is also what's keeping people from getting suspicious.

He seems like a pretty low-key guy.

He doesn't do drugs.

He barely drinks.

He's got the temperament of a guy you'd want managing your money.

He sounds less cool now, but I get it.

For sure, less cool.

One employee says Bernie, quote, appeared to believe in family, loyalty, and honesty.

Never in your wildest imagination would you think he was a fraudster.

But that's like the guy who presents himself as so good, where you're like, what are you hiding?

Yeah.

Like, like when a guy is like a wife guy and everything he says, he's like, my wife, gotta check in with the ball and chain, gotta check in with the queen of the house.

It's like, you cheat on her every day, don't you?

Yeah.

You're lying to her.

Every single day.

It still seems crazy to me, though.

Like, how reasonable is it that absolutely nobody has seen any red flags in Bernie Madoff, the almost billionaire at this point?

Have you ever been out to a really nice dinner that someone else has paid for?

Yeah.

That made me shut up.

I wouldn't ask questions over a 32-ounce ribeye.

Think about that.

Buy me one 32-ounce ribeye, make me giggle a little bit, and I'll die for you.

Think about that.

You know, Bernie's also obsessed with keeping up appearances in other ways.

He wants everything squeaky, clean, and presentable, especially in the offices.

There are presumably janitors in the building, but sometimes he goes in first thing in the morning to vacuum the floors himself before anyone arrives.

So

this would actually be my red flag.

He's a blue-collar guy.

No, but this is the part I like his background.

I like the way he came up, but this is the thing that would make me be like,

what are you hiding, man?

Because if I ever had a thing that I didn't want people to see, I'd be like, no, no, I'm just helping to clean up.

I run the place.

I have things I got to do.

I'm not windexing.

I'm indexing.

Think about it.

Come on.

Bernie is also still keeping up an entire separate wing of his business that is totally legit and not connected to the Ponzi scheme.

And remember, this is now a family business.

Bernie's two sons work there and are expected to take over the firm one day.

And his wife is a regular presence at the office, and she is very popular with the employees.

So, by the way, I should also mention the legit side of the company is legit a billion-dollar business in its own right.

Wow.

So if that's doing so well, why not just stop?

Yeah.

But here's the thing.

You ever have a really nice dinner?

Don't you want that again?

32 ounce ribeye.

You have just one of those.

Just one nice 32 ounce dinner.

Change your whole perspective toward wealth.

Well, Bernie also burnishes his reputation by donating to charities as well, including eight-figure donations for cancer research.

He's doing everything right, man.

He's a really good guy.

He vacuums his own floors.

He's curing cancer.

You know, he's just, he's a misunderstood guy.

Yeah, we love

research donations,

although his philanthropy does get him access to the people who run those charities and attend charitable functions.

Okay, so he's fake.

So, yeah, I mean, but once he gets those people in the room, he gets those people to invest with him.

But not only that, he also gets the charities themselves to invest with him.

Ooh.

Take back what I said.

Yeah.

Some of the charities include the Jewish Community Foundation of Los Angeles, which gives him $18 million to manage, and the Carl and Ruth Shapiro Family Foundation, which trusts him with a whopping $100 million.

Yeah.

Come on, man.

Don't be doing that.

That's...

Yeah, it's pretty despicable to rope a charity into a Ponzi scheme.

Brent, I don't know about you, but I've kind of been on Bernie's side this whole time up until now.

Up until now, I was split.

I was looking for things to be like, oh, like, what's the, you should have seen it coming.

This is, this part's messed up.

Yeah.

Yeah.

Not a fun.

Yeah.

So, yeah, from top to bottom, everyone seems to trust this guy for whatever reason.

He serves on the boards of major finance institutions.

And for three years in the 90s, he's even made chairman of the NASDAQ.

So So all positions of power that signal how much Wall Street respects him.

And to illustrate how secure Bernie is feeling about his position, let's take a look at a clip from an interview with him.

In today's regulatory environment, it's virtually impossible to violate rules.

And this is something that the public really doesn't understand.

And if you read things in the newspaper and you see somebody you know, violate a rule, you say, well, you know, they're always doing this.

But

it's impossible for you to go under for a violation to go undetected.

Certainly not for a considerable period of time.

Wow.

It was a bit of a dog whistle.

Was that during the height of his scheme?

Oh, yeah.

That was in the midst.

Wow.

Oh, yeah.

He was giggling in the back of his head.

Oh, yeah.

Yeah.

Yeah.

You know, you're going to get caught if you do something bad.

Yeah, they don't really like it when you mess with people's money.

Hiding his laugh.

Yeah.

That would have been awesome if he laughed so hard he choked and died in front of everybody.

And

then we find out about what he did.

Yeah.

I mean, this proves, though, that Bernie seems bulletproof at this point.

People think it's totally legit.

I mean, he's respected and he is loaded.

By 2008, his net worth is over $800 million.

Come on, man.

Solid.

However, there is one thing that could get him down, right?

Don't forget a Ponzi scheme depends on continually bringing in more and more money.

So, if something were to happen that made a bunch of investors all panic at the same time and not only stop giving Bernie their money, but also try to cash out all of their investments at once, Bernie would be in big trouble.

Is there anything in the history of the world you can think that happened?

Internet, internet, internet, digital photos of monkeys.

It was NFTs.

No, obviously it is big flop alum.

The financial crisis hits.

Yeah.

Good old 2008.

And Bernie is teetering on trouble.

So when Lehman Brothers collapses in September, investors are on, they're full-on panicking, trying to save as much of their money as they can.

So Bernie's investors want their money out of the stock market and they want their cash right now.

And not just the original amounts they put in, but the gains they believed they've made over the years.

So, clients start pulling more and more money out of Bernie's funds.

We're talking like $12 billion by December.

And with all of the money going out and almost nothing coming in, Bernie's entire scheme is now in peril.

So, December 10th, 2008, at an office Christmas party, Bernie seems uncharacteristically quiet, a little distracted.

And no, he's not bummed out for the usual office holiday party reasons like getting an ugly sweater in a gift exchange.

Bernie has finally realized that he can't keep his scam going and it's basically all over.

So he tells his sons, Mark and Andrew, that they need to have a talk after the party, but he's still going to hand out the holiday bonuses to everybody first while there's still money left in the company.

Now, usually when your dad says we need to have a talk, it's about, I don't know, the birds and the bees or, you know, you got in trouble for something.

But in this case, dad's the one who's in trouble.

And after the party, Bernie admits to Mark and Andrew that it's all been one big lie.

If your dad came to you and said that, what would you do?

I'd be like,

dad?

Is that you?

You just start going blind.

I would straight up,

I would tell my other brother to just straight up pretend like he had never heard that.

Yeah.

You also didn't hear that, right?

Mark and Andrew, they learn this and immediately report their dad to the authorities.

All right.

The immediately part, I'm like, you guys didn't think about it for that's your dad.

You got to think about it for a second.

Yeah.

So it certainly seems like at this point, Bernie knows that he's going to get caught one way or the other, whether or not his kids are involved.

And the very next day, December 11th, Bernie gets a knock on the door of his apartment.

It's the FBI.

Hey, Queens.

Bernie doesn't even try to pretend anymore.

He immediately confesses to the agents.

He just flat out says to them, quote, I've been running a massive Ponzi scheme.

That dude, I have to tell you, while doing research, when I read that, he literally, Brett, they ask him, and he's like, no, yeah, I've like, I've literally been running a Ponzi scheme the entire time.

He's quoted as being like, no, yeah,

I've been doing a Ponzi.

I've been doing a crime.

Oh, my God.

He doesn't even fight it.

He's just, ah, yeah, you're going to look at a bunch of stuff.

You're not going to like any of it.

I did a big Ponzi scheme.

I'm a bad guy.

That's the easiest day in the office ever.

Yeah.

for those agents i'm still also caught up on getting a knock in the door and it's the fbi and you go hey queens i have something hey queens i have something to tell you i've been doing a pretty bad thing thank you step off the elevator come this way

uh let's just say financially i've not been uh slaying the house down boots i have been

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On Boxing Day 2018, 20-year-old Joy Morgan was last seen at her church, Israel United in Christ, or IUIC.

I just went on my Snapchat and I just see her face plastered everywhere.

This is the missing sister, the true story of a woman betrayed by those she trusted most.

IUIC is my family and like the best family that I've ever had.

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This is a devilish cult.

You know when you get that feeling where you're just, I don't want to be here.

I want to get out.

It's like that feeling of, like, I want to go hang out.

I'm Charlie Coast Cuff, and after years of investigating Joy's case, I need to know what really happened to Joy.

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Well, upon Bernie's arrest, the fallout is massive.

$64.8 billion have disappeared overnight.

The folks who've lost their fortune include celebrities, universities, big financial firms.

But it's not just big institutions and millionaires who've lost money.

There are a number of small investors who've trusted Bernie with their savings, as did those many charity organizations.

Now, despite his fame in Wall Street circles, Bernie was never a household name.

And suddenly overnight, he's public enemy number one.

So obviously SNL had to take a a swipe.

Let's take a look.

If you can, take care.

Bye-bye.

He also makes the cover of the New York Post around this time, so let's take a look at that.

Alice, Smack, smack, smack, smack, smack, smack, smack, smack.

Ah,

he's still got it.

He's still got it.

He's a little apologetic, but the energy is still there.

His face is kind of screaming, what are you going to do?

What are you going to do?

Things happen.

I've been running a massive Bonzi scheme.

For the listeners only, the headline is the most hated man in New York.

Can I just say, even if I committed crimes, that is a devastating line to have.

I'd be like,

the most most hated man all right you guys were all my friend like last week

yeah i mean no matter how you calculate it there are a lot of people who are just plain furious with bernie and not just folks who lost money with him but also members of the general public now because remember this is december of 2008 the recession is in full swing so in some ways bernie becomes the living personification of wall street greed Now, during his trial, mobs of people wait outside his apartment to shout at him.

There was a trial?

He straight up said, I've been running a massive Ponzi scheme.

I feel like that just gets settled right then and there.

You still got to check into the court and say, What's up to the judge?

Yeah, I guess.

Yeah.

Hey, sorry.

Haven't done a crime.

I don't know any of that.

He actually had to wear a bulletproof vest to and from because it was so tense.

That's so cool.

But at this point, do you have any simps for Bernie?

No.

Well, I'm going to say this.

I'm going to say this.

If you find something that's working,

it's hard to stop.

I can lie and make hundreds of millions of dollars.

Why would I stop that?

Because I feel bad?

Think about it.

It probably became an addiction.

Or his kink, like you said.

Who knows?

I think it's his kink still.

Yeah.

Yeah.

For sure, still his kink.

It's also me playing devil's advocate.

This guy's a piece of shit.

Oh, absolutely.

Yeah.

No, don't feel bad for Bernie, but I mean, he's not the only one impacted by the revelation of his crimes.

The situation does take a toll on the entire family as well.

Bernie's wife, who claims she had no idea about the scam and is not charged with any crimes, is allowed to keep just $2.5 million of the family money, which is a lot of money, but just a fraction of the $825 million she and Bernie have.

So here's another thing.

When you have $800 million.

$2.5 million.

Yeah, she's spending that a year.

Yeah.

That's

nothing.

She's buying Aesop soap.

She's adding avocado.

She's not looking at the receipt.

She's not making coffee at home.

She's working ballet with no questions.

She's not even bothering to cancel her subscriptions.

No, she's buying MP.

Bernie's assets are also auctioned off to try to raise money to pay back his victims.

Let's take a look at a report on one of those auctions.

It's kind of like a reverse cribs, you know, a showcase of all the stuff that Bernie is about to no longer own.

That'd actually be such a good show.

This 10 and a half carat diamond ring was the top seller by far five hundred fifty thousand dollars this leather bull footstool sold for three thousand dollars cigar aficionados bid competitively for made off

these leather cigar holders sold for thirteen hundred dollars i didn't know that leather cigar holders exist and now i know what the hell i'm buying next

that kind of sucks for me that leather bull footrest for three grand sounds like a steal just to say i have bernie madoff's Madoff's footstool.

Yeah.

You know?

Yeah.

I wouldn't buy it myself.

There's some fun stuff there.

I like how there was a Bernie Madoff-branded umbrella.

Yeah.

But also, who the hell would buy his friggin' slippers that he had with his initials on it?

Probably the people that he stole from, just so that they could have some type of ownership.

Dude, imagine leaving the courthouse and getting stomped out by someone wearing your slippers.

That would be

cigar burns into your neck with your own cigars.

Yeah.

Yeah.

And then they yell out, I took this out of one of your leather holders, by the way.

So it looks like not the entire family was innocent.

In the aftermath, Bernie's brother Peter,

compliance officer, also gets sent to prison for 10 years for making over $15 million as part of the scheme.

But this is one of those callbacks.

This is one of those seeds that we just smelled from the moment you introduced him.

He worked in compliance.

Yeah, hello.

Strangely, Peter's forced to give up all of his family savings as part of the sentence.

Man, I'd be pissed.

One of the most tragic outcomes of the crime, and this does get dark, is that on the second anniversary of his father's arrest, Bernie's son Mark dies by suicide at the age of 46.

And then Bernie's other son, Andrew, dies of cancer two years later at the age of 48.

Bummer.

Bummer.

That's a big bummer.

That's a big bummer.

So Bernie pleads guilty, and in June of 2009, he is sentenced to 150 years in prison.

Oh, that's easy.

You can get off in 130 with good behavior.

Yeah, all in all, Bernie took between $17 and $20 billion from investors, making this one of the biggest frauds in history.

And during his sentencing, Bernie apologizes and admits that he knew he couldn't keep his scheme up forever.

He says, quote, I realized that my arrest would inevitably come so

okay

i knew that the arrest would come do you guys want to know why i was running a massive bonzi scheme

i i truly don't know how you could deal with the stress of that though like just waiting to be arrested for all of those years you know yeah So when he's in prison, a journalist asks Bernie how he was able to keep going, knowing that some point he would have to get caught.

Bernie replies, quote, I always, you know, figured, well, maybe some miracle will happen.

You delude yourself into thinking that, you know, some miracle is going to happen.

This dude's awesome.

What's crazy is I wonder if he had actually invested money during all those years, if he would have actually like made people money and made himself money.

It seems like the legit side was doing really well.

The legit side was doing well.

If he had just like taken people's money and actually smartly invested it, it probably would have made him solid money.

There was one line in the recent White Lotus where that, have you guys seen it the last season?

That where the dad is like, when he finds out he's going to get caught for doing whatever he did, I forget what the crime was, he talks to the guy on the phone, he goes, and I only made $15 million off of this.

That's nothing.

Yeah.

Yeah.

Watching the whole thing, you're like, oh, so you're like rich.

I don't feel bad for you.

What you did was stupid.

Right.

Because you are doing the good part of your job is fine.

You're making so much that you thinking 15 million is nothing?

Crazy.

Could have just kept doing the good part.

I don't know.

I've never run a huge Ponzi scheme, but you know, if you don't have a lot of people who have someone who's running a huge Ponzi scheme,

but if you have a business that's, you know, a billion-dollar business, couldn't you just like, I don't know, take some of that and just slowly start

paying back or put actually investing, you know, like take some of your legit stuff, stuff that's yours or your own $800 million.

Also, why wouldn't you just like

with your with your like highfalutin uh

uh social credit, why don't you just like charge more in your rates?

Be like, oh, by the way, when you invest with us, it's we take 20%, but you make a lot of money.

Like you could just raise your rates.

You could just charge in this an obscene amount.

Why not just do that?

Who knows?

Let's ask him, Bernie.

Speaking of, let's do a little, where are they now?

Bernie dies in prison in 2021 at the age of 82.

There is no redemption redemption story here.

He dies completely disgraced and his name is forever synonymous with fraud.

Like seriously, if you look up fraud in the dictionary, there is a picture of Bernie Madoff right next to it.

But that being said, here on the big flop, we do try to be positive people and end on somewhat of a high.

So are there any silver linings that you can think of that came about from Bernie Madoff and his schemes?

Somebody is the current owner of some very nice leather cigar cases.

Very, very nice.

Very busted.

Well, we do have a little update that is a true silver lining, and that is, as of 2024, the victims of Bernie's scheme have gotten back 94% of their money thanks to the funds started by the government.

So, wow.

Well, now that you both know about Bernie Madoff, the man behind one of the biggest Ponzi schemes in history, would you consider this a baby flop, a big flop, or a mega flop?

It's a mega.

Mega flop.

That is a mega flop on par with the flop of the 32-ounce ribeye steak that Bernie would buy people as he seduced them in.

I think the only way that this would have been like a little flop would be, and this is gonna,

is if he got away with it his whole life and then right after he died, they found out about it and his family dealt with it.

Yeah.

Like, like if he basically got to live this awesome life,

then he gets away with it and his family has to deal with the flop, then it's, you know, then it's not as bad in his perspective yeah it's it's worse i think actually in the great scheme of things that'd be worse

but i don't know

kind of mega flop dude mega flop

well thank you so much to our hilarious guests that i am absolutely invested in come on now brett bella and joey dardano for joining us here on the big flop

of course thanks to all of you for listening and watching if you're enjoying the show please leave a rating and review or subscribe.

And we'll be back next week with another flop.

Jen Shaw, former Salt Lake City housewife, once said, The only thing I'm guilty of is being Shaamazing.

If that's another way of saying guilty of conspiracy to commit wire fraud in connection with telemarketing, then yeah, she's Sha amazing.

Bye.

Bye.

Bye.

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The Big Flop is a production of Wondery and At-Will Media, hosted by Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner.

Written by Anna Rubinova and Luke Burns.

Engineered by Zach Rapone, with support from Andrew Holtzberger.

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How hard is it to kill a planet?

Maybe all it takes is a little drilling, some mining, and a whole lot of carbon pumped into the atmosphere.

When you see what's left, it starts to look like a crime scene.

Are we really safe?

Is our water safe?

You destroyed our top.

And crimes like that, they don't just happen.

We call things accidents.

There is no accident.

This was 100%

preventable.

They're the result of choices by people.

Ruthless oil tycoons, corrupt politicians, even organized crime.

These are the stories we need to be telling about our changing planet.

Stories of scams, murders, and cover-ups that are about us and the things we're doing to either protect the Earth or destroy it.

Follow Lawless Planet on the Wondry app or wherever you get your podcasts.

You can listen to new episodes of Lawless Planet early and ad-free right now by joining Wondry Plus in the Wondry app, Apple Podcasts, or Spotify.