Madoff had a very
expensive looking office
in midtown Manhattan in a building called the lipstick building
on fifty third and third Avenue
he had two floors
for the brokerage firm eighteenth and nineteenth floors they were %uh considered space age
everything was computerized
there was no paper allowed
people wore suits and ties and this is really where
Madoff brought
potential investors to kind of show off his operation
now once you or I gave him a check however
it didn't go to the eighteenth and nineteenth floors
the phony hedge fund actually was on the seventeenth floor of this building where
very few people had access
the seventieth floor was populated
by
chiefly Frank DiPascali who was
bernie madoff's henchmen
essentially
DiPascali had worked
with Madoff since the nineteen seventies has had a high school education he had no finance background
%uh but he was very useful
and he helped Madoff
%uh cook up this
cover story
which was this
this option strategy called a split second conversion
%uh which I won't even go into because as it turned out they weren't doing any trading
DiPascali oversaw a staff
%um
he was recruited by the way by
by - who was Madoff's right hand woman down there
who knew Frank DiPascali when he was still in high school
they were both from the same neighborhood Howard beach
the staff similarly
had very little finance background many of them were just clerical workers
and essentially what would happen was this
%uh Madoff at the end of the day
would come downstairs from the the super super duper star trek
trading operations
%uh he would
go downstairs
he and Frank DiPascali would %uh
take the closing prices from
with top stocks
intel apple GE
punch them into an old IBM AS four hundred computer an old dinosaur
they would create a spread sheet which showed
phony gains
and that would flow down to all their different customer accounts
and now allegedly these two computer programmers would help them figure out
you know who's going to get what portion of
%uh the profits
and they would create
phony statements for
thousands of investors
before I invested in Madoff in nineteen ninety five
for some reason
Frank DiPascali agreed to talk to me so I was up in their offices
on the eighteenth and nineteenth floor for about fifteen minutes madly scribbling
taking notes
which I managed to figure out later on you know later that day and typed
it up
so I knew I knew about this split strike conversion strategy which made sense to a layman like
me
and you know strangely enough DiPascali said well i'll show you
%uh the trading floor which they did with everybody because it was very impressive it was really
shockingly impressive it was top of the line
it really was
all these
what you saw twenty five or thirty
people in their twenties sitting there at the computers obviously making a million dollars a year
each back in nineteen ninety five
oh my goodness
but you know what was so strange a that that two things first
that DiPascali agree to see me and a friend
and secondly he
oh well our offices are downstairs but we don't go down there
he actually mentioned that to me I can remember
it's not in my notes but I never forget it
that was apparently a mess
the London office you know
the the window shades are everythin's black and white
you dare not have a
%uh you know the wrong color pen
yes and this
the 17th floor a complete mess
up
it was really the two worlds of Bernie Madoff
one was legitimate
it was orderly
seemingly above board
totally transparent
and it had to be because
Madoff's brokerage firm was trading in
stocks that everybody else on Wall street was trading and
everyone knew what the price was
%uh
on the seventeenth floor %uh
it was where money went to vanish
all