Since the Bernie Madoff saga broke, most people have agreed on two things: It is impossible that he could have continued a scam of this complexity without those closest to him being aware of it, and it was going to become a movie.
It’s looking as if this film of financial destruction will have long silent scenes — Wall-E on Wall Street.
As it is, the plot requires us to believe Madoff’s family enjoyed the benefits of his apparent success without ever being remotely curious about his investment strategy. Did no one at a family or social gathering discreetly pick his brain for his favoured stocks? No one asked if a particular fund was receiving a Madoff investment? Never wonder why there were no meetings or calls from industry individuals about funding?
Where there never any financiers seeking a large investment? Did they never see paperwork? Never hear phone calls from intermediaries? Apart from the receipts did the lack of accompanying activities not strike anyone as odd?
In a strata of society suspected of being rampant with unprosecuted insider trading, this crowd were quieter than the grave.
The circumstances and the timing that provoked Madoff to “confess to his sons” reeks of the pre-meditated. We should recall those famous words attributed to John Kenneth Galbraith: Recessions expose what the auditors missed.
Possibly a gaggle of panicked and panicking investors seeking redemptions was the signal that the plot was about to unravel. No matter how imaginary the returns, a lot of actual money found its way into Madoff’s custody and it must be somewhere waiting for person or persons unknown to attempt to grab the swag.
Even in the most secretive tax havens there must be someone who knows they’re holding the lolly.
Madoff’s confession and guilty plea is first and foremost a ploy not to implicate his family, everybody agrees on that too. Although Madoff’s sons turned daddy in, they haven’t tormented him with anguished pleas to hand over the remaining cash to reduce the stigma on the Madoff family and save innumerable people from ruin.
No, the Madoff boys have not induced an epidemic of earache. The shame on the family and the suspicion hanging over them and their mother is something they can tolerate. There is obviously a reason for this.
Maybe one the least glamorous parts of provincial England has the answer. When I thought about this, I checked on the net to see if anyone else had made this connection … they hadn’t, so this could be off the wall, but I feel, feel, feel, sure the Madoff boys know this story well.
On the Dec. 1, 2007, John Darwin, the principal perpetrator of a minor financial fraud, walked into a London police station five years after he had drowned in the North Sea. Despite their relative rarity, resurrections tend to be divisive. The British tabloids were in heaven, pun intended, and the story of Canoe Man was born.
Mrs. Canoe Man insisted she was shocked and baffled until a picture of her and the deceased, taken a few months earlier, smiling happily together with their Panama City realtor was discovered.
Like the Madoffs, the Darwins have two sons. Now, these lads didn’t take too kindly to discovering that as they grieved for their father, Mum was hiding him in the attic. And immediately the British public wanted to know if the sons were implicated in this cock-eyed insurance job.
The Darwin brothers were soon absolved of any involvement in their parents’ scheme, and then I’m sure the Madoffs saw a solution.
The timeline is very relevant. In December 2007 the effects of the current crisis were already being felt — the previous August was when interbank lending halted so Team Madoff had known for a few months that a dénouement was inevitable.
And here, unexpectedly, was a dress rehearsal, a template and an inspiration on how to unravel the fraud within minimum impact on the family. The innocence of the Darwin sons was immaterial; it was the circumstances, the inspiration to pull off something so audacious.
Before this, the sons denying responsibility would have seemed too brazen even to the Madoffs. If 70-year-old Daddy Madoff carried the can there was a good chance the sons could ride out the storm. All the doubts and uncertainty about how to handle the publicity, the questions, the reactions of the press — as though fortune was still shinning on them, they saw how their own recklessness could be ignored.
Obviously the gravity of the fraud was beyond anything dreamt up by John Darwin, but since the Madoff sons were playing innocent, that was immaterial, as their behaviour since has demonstrated.
No matter how differently the police in New York acted, this laughable episode in England gave them the confidence to don and maintain the mask.
And it’s the Madoffs to a tee — they even steal the finale!