Betrayal: The Life and Lies of Bernie Madoff

Betrayal: The Life and Lies of Bernie Madoff

by Andrew Kirtzman

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It was an inconceivable deception: over $65 billion stolen in the world's largest Ponzi scheme.

Including new and revealing interviews with those who worked closest to himand his family, Betrayal is an in-depth, penetrating look at the man who perpetrated history's most notorious financial crime.

To the people who knew

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It was an inconceivable deception: over $65 billion stolen in the world's largest Ponzi scheme.

Including new and revealing interviews with those who worked closest to himand his family, Betrayal is an in-depth, penetrating look at the man who perpetrated history's most notorious financial crime.

To the people who knew him, Bernie Madoff was a kind and honorable person; a loving father and husband; generous to his employees and charitable even to strangers. On Wall Street, he was known as a wise elder statesman, wildly successful in his investments but never too risky with people's money. He was so revered and trusted that thousands placed their life savings with him, and he in turn provided them with early retirements and affluent lifestyles.

But on December 11, 2008, Madoff confessed that he'd lied to them all. The monthly financial statements he'd sent customers for decades were all works of fiction. Their money was gone.

Despite the crush of media attention on Madoff's scam, little is known about Madoff himself. What could lead a seemingly good man to ruin the lives of everyone who ever cared about him? What caused Bernie Madoff to commit an unspeakable act of betrayal, bankrupting his family, his friends, his mentors, and thousands of investors who depended upon him for their livelihoods?

Betrayal: The Life and Lies of Bernie Madoff is about the man who realized that he could have everything he wanted if he simply lied to the people who trusted him the most. Author Andrew Kirtzman tracked down more than a hundred people from Madoff's past, from the first girl he ever kissed to family members who played in his house as children; from his secretaries to his drivers; from traders at his company to his inner circle of friends. He pored through thousands of pages of court records; private e-mails; phone-conversation transcripts; and census, military, and immigration records. The result is a fascinating story about the rise of a deeply immoral man.

Kirtzman describes Madoff's feelings of inferiority and humiliation as a child, and his obsession with making money to prove himself worthy as he grew older. He reveals Madoff's construction of a criminal enterprise at a young age, long before he's ever claimed it began. He paints a picture of a loving yet strange family that ran a multibillion-dollar corporation like a small family restaurant. He offers an inside look at life within the company and the characters who worked on the infamous seventeenth floor. He reveals the details of an underground flow of cash that no one has known about until now. And he chronicles the desperate moments leading up to Madoff's fall, from the perspective of the people who spent the last hours with him before his house of cards collapsed.

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Editorial Reviews

“Kirtzman’s book is the more engaging read, focusing much more on Madoff himself and on the anger and shame his crimes provoked, whether in the Fifth Avenue Synagogue in New York or the confines of the Palm Beach Country Club in Florida.”
Time magazine
“Andrew Kirtzman’s Betrayal offers the biggest payoff of the three [Madoff] books. It’s a perfect meld of business details and personalities. . . . He has perfect pitch when it comes to the agony and shame of the Jewish community.”
Wall Street Journal
“Accurate and highly readable.”
Time Magazine
"Andrew Kirtzman’s Betrayal offers the biggest payoff of the three [Madoff] books. It’s a perfect meld of business details and personalities. . . . He has perfect pitch when it comes to the agony and shame of the Jewish community."

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The Life and Lies of Bernie Madoff

Chapter One

The Struggler

In the early 1950s, the housewives of Laurelton, Queens would pause their phone conversations every time an airplane roared overhead, so close was their neighborhood to Idlewild International Airport. People would swear that the planes flew so close to their windows they could see the passengers in their seats.

Laurelton wasn't the wealthiest community in New York, but it was idyllic in many ways. The Jews who filled the modest one-family homes had made it out of the tenements of the Lower East Side, Brooklyn, and the Bronx and were luxuriating in the first real houses they had ever known.

It was the smallest of worlds. The boys at P.S. 156 played stickball on its asphalt playground as girls jumped rope. Down the street, the Laurelton Jewish Center hosted Ping-Pong and basketball tournaments for kids after school. Lil Ed's luncheonette played Rosemary Clooney and Bill Haley and the Comets on its jukebox, and teenagers drank shakes at the counter. After catching a movie at the Itch, as the movie theater was known, the teens would dance in their parents' basements, and steal a kiss or two if they felt brave enough. It was a Happy Days existence, the New York Jewish version.

It would prove to be a fleeting moment in time, as Laurelton was just an economic pit stop on the way to the suburban prosperity of Long Island. In the early 1960s, the residents would flee en masse as black families began moving into this homogenous community and the illusion of an all-white Jewish world was fatally punctured.

But for a short period, Laurelton was a treasured home for acommunity experiencing its first taste of the American dream. People kept their doors unlocked all day, and everything most kids knew of the world could be found on Merrick Road, where you could pick up some egg foo yong at the House of Chang or a charlotte russe at the Four Star Bakery. Times Square was about fifteen miles to the west but a universe away. If the older kids got ambitious, they'd get on the Q5 bus and take it to the neighborhood of Jamaica, twenty minutes away, where they would expand their horizons at Macy's and Gertz.

In the summer of 1953, as lines of moviegoers snaked down Merrick Road to see From Here to Eternity at the Itch, an 18-year-old freshman at Ohio State University named Stephen Richards prepared for his summer break back in Queens.He was a rare breed, an affluent kid from Queens. The borough was a workingman's haven, separated from Manhattan by two bridges, one tunnel, and an entire way of life. Forest Hills, Stephen's neighborhood, was perhaps the toniest of a pretty unglamorous bunch.

Stephen was a slim young man with the swagger of someone who'd been born to comfort. His father headed up the legal department of the Maryland Casualty Company, one of America's largest insurance firms in the 1950s. At times in his life, Stephen's family had a car and a driver, an almost inconceivable amenity in middle-class Queens. The money allowed him to go to an out-of-state university instead of a local public college, a rare privilege.

He was a frat boy at Ohio State and prided himself on being a sharp New Yorker in a world of midwestern hicks. His roommate, Bob Roman, was an Ohio native and a little sheltered from the rest of the country. So Stephen decided to take him home for vacation and show him the big city. Along the way, a frat brother back in Columbus decided to fix Bob up on a blind date. The frat brother was from Laurelton and knew a pretty 16-year-old blonde girl back home named Joan Alpern.

The adventure led Stephen and Bob to a modest two-story house on a pretty tree-lined street. Sitting on the back porch of the Alpern home was Joan, her younger sister, Ruth, and Ruth's boyfriend, Bernie Ma-doff. The five hit it off immediately; Joan and Bob were instantly smitten with one another, and the group spent much of the languid summer day together.

Bernie was a thin, lanky boy, 15 years old, with a thick mop of brown hair, small, almond-shaped eyes, and a large, rounded nose. There was little that was remarkable about his looks aside from his long eyelashes, which were so striking that the girls who knew him could describe them a half—century later. Ruthie was blonde, pretty, and spunky, far more animated than her boyfriend. Bernie seemed happy to play the introvert to her extrovert. They seemed unusually bonded for such a young couple; they had an ease in their relationship more typical of an old married couple. Stephen had never met Ma-doff, but he liked him immediately. He had a relaxed, nonthreatening demeanor; friends would sometimes have a hard time getting him to take things seriously. He seemed to be a good listener, not some show-boat.

The two chatted for a while. Stephen asked Bernie if he knew what he planned to do over the summer. "I'm pretty set," Ma-doff said. "I've already got a job. I'm helping a guy install sprinkler systems." It sounded like a dull way to spend a vacation.

In the week that followed, Stephen and his roommate hit the big city, walking the streets of Manhattan, visiting tourist sites, and soaking up the energy of its postwar boom. Yet their week on the town ended back on that same porch in Laurelton, for Bob was drawn to Joan, who would one day become his wife.

With a light summer breeze pushing through this little porch in Queens, Joan and Bob pursued their burgeoning courtship and Stephen and Bernie got to know one another. The two were developing an easy rapport.

"How'd you make out on that sprinkler job?" Stephen asked.

Ma-doff smiled. "I installed one sprinkler with the guy and realized I could do this thing myself," he said. "I went into business the next day." He was boasting, a wise-ass showing the college kid how well he was doing. But there was a good deal of substance behind Ma-doff's cockiness. While his friends were playing basketball or goofing off at the Laurelton Jewish Center, Bernie was on his hands and knees on his neighbors' lawns every day installing sprinkler pipes. It was unglamorous work, digging holes into hardened soil and sinking pipes into the ground. Each long pipe had to snake along a ditch to a central water supply, where a clock and a meter would need to be installed to get the water spraying automatically. It was blue-collar stuff.

Ma-doff's friends took notice. Donny Rosenzweig would stare out the window of his house, watching Bernie on his knees in the dirt, digging into the Rosenzweigs' grass with a hand spade. Donny was surprised that a friend of his was doing the work of a laborer.

Bernie was the image of a driven young man. Later that summer, he boasted to Stephen that he'd made several thousand dollars from his fledgling sprinkler business, a head-turning sum of money for a kid to earn. Stephen was dazzled. Fifteen-year-old Bernie Ma-doff had made more money in one summer than Stephen would make in his first year out of college. His destiny as a businessman was obvious; he radiated an entrepreneur's spirit. "This kid is something else," Stephen told people. "He's going to go places."

The forces driving Bernie Ma-doff's insatiable quest for success were not all good, but that was impossible for Stephen to know at the time. The positive impression Bernie made on him was so deep that it stayed with Stephen for almost a lifetime, coloring decisions he would make for years to come, and ultimately ruining his life.

The Life and Lies of Bernie Madoff
. Copyright © by Andrew Kirtzman. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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Meet the Author

Andrew Kirtzman has written a biography of Rudy Giuliani, covered more than a dozen national political campaigns for print and television, and hosted two of New York's most widely watched public affairs shows. In September 1999, Brill's Content magazine named Kirtzman one of New York's 10 Most Influential Journalists. In 2003, his week-in-review feature "Kirtzman's Column" won an Emmy Award for outstanding political programming.

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