60 minutes rewind
wall street is shreds the watchdogs fast asleep bonus stuffed executives laughing all the way out
of the busted banks it's been some year oh and we left out the ponzi scheme of ponzi schemes
bernard madoff's untidy little business that built thousands of people out of billions of dollars
while the mastermind is doing 150 years in prison the big question is where did all the money go
irving picard the court appointed trustee the liquidator is searching for the billions that
disappeared and trying to recover as much as possible from madoff's remaining assets it's
a daunting and thankless task for while he's suing whoever he can on behalf of the victims
he's also suing many of the victims those who he says benefited and should have known
they were investing in a house of cards mr picard and his chief counsel david sheehan
have been largely silent about the details of the recovery until tonight last november just
before the whole thing collapsed barad madoff sent out statements to his clients how much were they
told they were worth about 64.8 billion dollars so the statements were total lies yes absolutely
the 64.8 billion that investors thought they had was just an illusion designed by madoff to keep
investors investing last december the roof fell in mr madoff what would you say to all those people
mr madoff has no say in the matter if the victims want money back they'll have to go
through mr picard the decider and his bloodhound mr sheehan how much real money do you think went
into the whole scheme i'd say about 36 billion and about 18 of it went out before the collapse
and 18 of it's just missing and that 18 billion dollars is what we're trying to get back
so for the past nine months picard and his team have been on a global treasure hunt
the first step liquidation madoff's boats his art even his season tickets to the new york mets
plus bernie's various homes all sold or about to be sold with the us marshall
as real estate pitch man your eyes are drawn directly to the chandelier which is probably
worth a pretty penny they didn't exactly hide their wealth did they they did have the house in
palm beach they had a place in montauk they had an apartment here in park avenue in the city
all of which are the accoutrements of great wealth but it wasn't an extraordinary
lifestyle how much is all that total according to the government it's over 50 million dollars
just a drop in an oversized bucket nothing close to what investors lost
so picard and his team continued to follow the money they started here this was the scene of the
crime made of new york offices an impressive landscape of emptiness his desk was here
and close by perhaps a work of art that sums up the entire story it was called the soft screw and
it was about four four i guess four to six feet high and it was sitting right here and sitting on
top of the world was made off himself he was much like the wizard of oz just hiding behind this wall
and no one could quite penetrate it but they sort of really liked the results as far as you've been
able to find out was he ever legitimate no it was never a legitimate nothing to be told the truth
which he's not capable of he would then say yes i started out as a crook and i ended up as a crook
and a crook who looked after his family picard's team unearthed records showing madoff's sons mark
and andrew who ran a legitimate trading operation and madoff's brother peter the chief compliance
officer took 80 million dollars in compensation over the past seven years plus millions more in
personal expenses charged to the company private jet rentals ski vacations and country club dues
even ruth madoff's wife had a company credit card and she charged millions too on everything from
shopping sprees in paris to movie rentals all courtesy of bernard l madoff securities
thank you very much they used the bank account at blmis like a personal piggy bank of all the
people that should have known his brother and his sons who worked under the same roof with him
should have known one would think so did they know my belief is yes they knew and the reason
i believe that is they were officers of these companies and directors in certain instances
as well and also compliance officers in a very highly regulated environment so i think
clearly they would have to have known what was going on given their own personal transactions
the longevity of what was happening and their responsibilities as officers of the company
madoff's sons and brother also had accounts with bernie and their returns were simply spectacular
there is uh sort of an extraordinary event with peter his brother
after 1995 we only see him putting 14 dollars in and he took out over 16 million
we have to take a hard look at that picard says mark and andrew madoff withdrew over 35 million
dollars from accounts that were opened with little or no original investment if they turn out to be
untouchable criminally do you intend to bankrupt them civilly whether or not they have a criminal
problem we will pursue them as far as we can pursue them and if that leads to bankrupting
them then that's what will happen picard and sheehan told us they plan to file suit this week
against madoff's sons mark and andrew his brother peter and niece shawna accusing them of negligence
and breach of fiduciary duty in their roles at the company he'll be seeking the return of
198 million dollars that was paid out loaned or transferred to them when his brother took
out money or his sons took out money they took customer money can you lay claim to
the sun's real estate for example i believe that we can the money that went to buy these houses
under the law is called fraudulent transfers maybe but the madoff sons are claiming they're still
owed nearly 90 million dollars by their father's bankrupt company mr madoff mark madoff and the
other family members maintained their innocence and declined our request for an interview
but in a statement the madoff's sons say picard's allegations are baseless that
they had no prior knowledge of bernard madoff's crimes if you were those sons and you knew you
knew today about where all that money came from wouldn't you be embarrassed to keep that money
they should give it all back and if they don't give it all back i think we have an obligation to
go get it and take it all back and that includes mother madoff ruth though she's already agreed to
forfeit about 80 million in assets picard has sued to keep her on a very short leash at the moment
any time she spends over a hundred dollars she has to check in with you correct she reports it to us
at the end of a month and how is she living now very modestly the most significant amount of money
that ruth is currently spending is on lawyers there is an assumption in this case that there is
this stash out there whether in swiss banks or under the mattress are you assuming there is
yes yes what kind of money are we talking about would assume it millions and millions of dollars
millions and millions isn't nearly enough to cover the billions stolen by bernie madoff but here's
where the story takes an odd twist most of the money for victims will not come from the madoff
family but from some of the victims themselves most people assume because everyone lost money
who dealt with made up right not true we've found that there have been quite a few people who have
gotten out more than they put in in fact about half of madoff's thousands of victims are what
picard calls net winners people who took out more money than they ever invested with madoff we can
tell that if morley put in 100 hours and he got out 200 he got 100 hours of somebody else's money
so the guy who's been happily taking 25 000 a year out over say 10 years he's not going to get a dime
out of this no not if he took out more than he put in well so if they say put in an initial thousand
and he's already got more than he put in he's been overpaid and are you going to try and get
the difference perhaps and he's entitled by law to get that difference back it goes by the nicely
nasty name of a clawback if any investor took out more than they put in over the past six years
picard can legally demand it back to help victims who didn't take money out for now picard says
made of small-time winners are not his priority he's focusing on the big winners who claim to be
innocent victims the story will continue after this
but some of the big players i believe actually knew exactly what was going on and participated in
it pickard and sheena have sued several prominent madoff investors saying they knew or should have
known of the fraud like billionaire investor and philanthropist jeffrey pickauer he got a
statement that said his return was 950 percent now this isn't some unsophisticated rube buying these
stocks and dealing in this this is a very very sophisticated guy he gets a statement like that
that's off the charts he doesn't know anything about that so is he a prime suspect sure i think
not only in terms of the monies that he took out but the records with regard to the relationship
the manipulation and back dating of trades we had to know or someone knew is false the suit
claims pick our took out more than 5 billion dollars in profits since 1995. picard is also
suing another billionaire investor stanley chase who withdrew over a billion dollars in profits
both chase and pickard maintained their innocence and would not comment but in court papers pick our
characterizes the suit as unsupported by facts or logic sheehan says he thinks they knew all along
and simply couldn't resist the easy money i think as everyone you know was participating in this and
just feeding at this trough of greed at the end of it what they were looking for was it to continue
they were hoping it was never going to end so far the trustee and his council have filed 13 lawsuits
seeking the return of nearly 15 billion dollars from the biggest madoff investors in addition
233 clawback notices have gone out to made our friends and family who may have profited from
the scheme this is a human tragedy thousands of smaller investors who were living off what they
believed were legitimate profits now fear that on top of their lost nest egg they may end up owing
even more i open my mailbox wondering if this will be the day when the letter arrives she is
sympathetic but at the end of the day they're in a ponzi scheme unfortunately for them so all they
get at best is what they put in and the claim that they should be getting something other than that
is to suggest that some other resource should exist about the taxpayers coming in in funding
this so far picard has found nearly 1.5 billion dollars for the victims fund
and he's hoping to get several billion dollars more but even then victims will collect only
a tiny fraction of what they lost we don't know how much is there but it's going to be
not necessarily pennies on the dollar but it's it's only you know a little bit more than that
we're not going to be able to repay everyone not not anything close to what they lost you