Richard Glantz, the 64-year-old trusted lawyer to whom Robbins had given his money for investment, told the author he created a Madoff feeder fund because:
I wanted my family and some close friends to have access because I thought Bernie Madoff was an opportunity who could help people. I was not doing it for profit. I charged nothing. I’ve been with Bernie a very long time and made a lot of money with him. Bernie wasn’t opening accounts for people [with] less than a million dollars, so I thought I was doing people a favor—and I actually was doing them a favor for many years. They had an opportunity to get 10 percent a year, or whatever the return was, and I know that outstripped what you [typically] see in the stock market.
Glantz is one of the few Bernie feeder funders who has spoken out about his dealings through the years with Madoff.
Asked whether he ever questioned the steady and continual returns in good and bad economic times, and whether he saw such returns as a red flag of a possible scam, Glantz says that when he asked Madoff about what was going on he got all kinds of complex answers, gobbledygook about split strike conversions that Bernie claimed was his strategy, one that few understood.
Glantz had personally invested with Bernie, too, he says.
I would never put anyone in anything that I wasn’t in—and I lost everything. I lost millions of dollars. Everything. I have to sell my homes.
Glantz had learned about Bernie from his now-deceased accountant father, Edward Glantz, who had a long, complex history with Madoff. The senior Glantz along with his then accounting partner, Steve Mendelow, were feeders for another Madoff feeder fund, the one run by Frank Avellino and Michael Bienes. Glantz and Mendelow had offices on the same floor as Avellino & Bienes in a New York office building and, according to an SEC complaint, collected $89 million in investor money for Avellino & Bienes that was then funneled to Bernie Madoff. All of that ended when the SEC shut down the Avellino & Bienes firm in 1992.
“My father told me what he was doing,” says Glantz, “and I was skeptical. But after I watched him invest with Bernie with our family money, I decided I’d do it also—you know, the guy was head of Nasdaq, he had a high rating as a wholesale dealer, and a wholesale dealer is an insider.”
In 1988, John Robbins had started an international nonprofit organization called EarthSave to promote healthy, environmentally sound food choices and to raise awareness of “the ecological destruction and cruelty linked to the production of food animals.” The organization’s headquarters were in New York, and each year it held a vegetarian food festival called “Taste of Health.”
Robbins had named his friend Glantz to the board of directors of EarthSave after Robbins’ book, Diet for a New America, “had made an impact on me, and many people of my generation,” says Glantz. “John and I became friends. I loved John and cared for him, and somewhere down the line I said, ‘If you want, you can try out what I’m doing,’” which was putting money in Madoff. “I told him what I thought the return would be—10 to 13 percent. I considered I was very fortunate [to be investing in Madoff], so I brought John in. I brought friends in.”
Asked how many investors he had enlisted, Glantz declined to answer.
“All I can say is I brought in friends and family, and one of them was John Robbins.”
In all the years Glantz was investing and feeding friends to Bernie, he claims he never once met the big man himself:
I always talked to Frank—Frank DiPascali. He answered my questions. I thought his answers were legitimate. I got the Madoff statements. They looked like [legitimate] broker statements. The trades were always accurately shown, and when you wanted money it was always there.
He says through the years he took money out. “I lived off it. I never touched the principle.”
When reminded that Bernie had admitted that he hadn’t made a trade in some 13 years and just kept investors’ money in a bank account, Glantz responded, “Apparently. It’s mind-blowing, isn’t it? Half the world went upside down. I have a 91-year-old mother, and all her money was in with Madoff. All my money was with Madoff. But Bernie had credentials. He had a three-floor brokerage in New York and an office in London. I had a client who called up Bernie himself and told him he wanted to put in $100 million and Bernie told him no, he wasn’t taking it. I think he was afraid of big money because the people would want to send in people to do due diligence.”
Glantz says he has not been questioned by the FBI or the SEC since Bernie’s arrest.
Asked what he would say to Bernie if he had a chance to visit him in jail, Glantz says:
I wouldn’t give him the time of day to visit him. I don’t give a damn about him.
But Glantz says he’s convinced that Bernie didn’t act alone as he claimed to federal prosecutors.
I have no idea how he set up his Ponzi scheme. Do I think Frank DiPascali knew? Yes. Do I think Bernie overpaid people either in London, the Bahamas, or his back office in New York to help him? Yes. What I don’t understand is, if he’s done his fraud for 16 years, why no one left and turned on him. Why didn’t Bernie cop a plea? His only cooperation now is to turn in his family, and he’s not going to do that.
Asked what John Robbins’ reaction was when he told him all of his money was lost, Glantz says:
I don’t have clarity on that. I don’t remember. It was such a sad time to call him, to call my relatives and friends. For two or three weeks I was just grieving—grieving for the suffering I’ve created, not just my suffering.
Even now as I talk I feel such sadness. I just felt so bad speaking to John. John was very sweet. He called me a couple of days later and said, “Richard, I love you and I’m concerned for you.” So here’s this guy who I completely devastated and his reaction was love. John’s a very remarkable man that way.
Remarkable, for sure.
In April 2009, with most if not all of his money gone and with the man who stole it behind bars, John Robbins made a lucrative deal with the publisher Ballantine to write a book appropriately entitled The New Good Life, described as “a manifesto for finding meaning beyond money, and a practical blueprint for living happily on less.”
An odd event occurred a week before Bernie was scheduled to be sentenced to spend the rest of his life behind bars. At the Metropolitan Correctional Center where he had been held since pleading guilty to masterminding history’s biggest Ponzi scheme, Bernie had a visitor. For three hours, he sat and talked with David Kotz, the inspector-general of the SEC. For months Kotz had been probing who at the regulatory agency might have known what Bernie was up to but did nothing with the information. Was Bernie suddenly cooperating? Was Bernie going to be a consultant for the agency he saw as his enemy—a consultant expert in spotting Ponzi schemes?
No one would comment on the meeting.
There was lots of other action, too, as the countdown to Bernie’s historic sentencing began, overshadowed only by the sudden death of Michael Jackson and the passing of cancer victim Farrah Fawcett. One of those actions prompted the New York Post to declare: “Ponzi King Takes Chutzpah Crown.”
The angry headline was sparked by Bernie’s plea seeking leniency. In a letter filed in Manhattan federal court, Ira Sorkin, Bernie’s lawyer, asked for a prison term for his client of no more than 12 years when he was facing a maximum of 150 years for his crimes.
“We seek neither mercy nor sympathy,” he said in the letter. “Respectfully, we seek the justice and objectivity that have been—and we hope always will be—the bedrock of our criminal justice system.” According to Sorkin’s logic based on Social Security Administration statistics, Bernie had a life expectancy of 13 more years beyond his 71, and the lawyer felt that a sentence of a dozen years would be appropriate. He said that “mob vengeance” surrounded the Madoff case. The New York Daily News blared, “Has Bernie Madoff ’s lawyer gone mad?”
Immediately after Sorkin made his plea, federal prosecutors argued that because of the “unique scope and duration” of Bernie’s crime he be given
the maximum sentence. “Madoff ’s crimes were of extraordinary dimensions,” the prosecutors said in a memorandum to U.S. District Court Judge Denny Chin, the sentencing judge. The prosecutors also made note of a letter from the trustee in the case, who stated, “Mr. Madoff has not provided meaningful cooperation or assistance to the Trustee since his arrest.”
On the evening of June 26, three nights and a wake-up before Bernie was to be formally sentenced to prison for the rest of his natural days, he and Ruth were stripped of his stolen goods—declared to be $170 billion worth. The enormous amount was considered symbolic, and meant only that any future assets discovered by investigators would be seized and sold to help pay back the victimized investors.
But it also meant that Ruth would be penthouseless.
U.S. marshals were ordered by Judge Chin to sell the Madoffs’ spectacular apartment, along with the Montauk beach house where in the summer of 2008 Bernie had held forth at his disgraced firm’s annual beach party. Also to be put on the block was the Madoffs’ Palm Beach house that was seized earlier. In all, the properties were valued at almost $22 million. Along with the homes, all the fancy cars and boats were to be sold off along with all personal property—from the antiques in the apartment that Ruth wasn’t permitted to sit on, to the Steinway in the living room, the paintings on the walls, and whatever other expensive tchotkes were found anywhere in the Madoffs’ possession.
Moreover, the forfeiture included millions of dollars in loans made over the years to family members such as Bernie’s sons and brother, to friends, and to employees. In essence, the Madoffs were stripped bare of everything, except for $2.5 million that Ruth was permitted to keep “in settlement of the claims she would have otherwise brought against property,” according to the prosecutors.
The infamous Madoff dynasty was clearly at an end. The family had virtually been reduced to nothing. The Ponzi King and his royal family had lost the riches accumulated over the years, much of it stolen from trusting investors.
The disgraced, reviled financier now awaited being told where his final resting place would be.
Epilogue
While the three months he spent behind bars awaiting formal sentencing didn’t make him any more cooperative with investigators, or sympathetic toward his thousands of victims, Bernie Madoff did get one benefit from life inside: the chubby fraudster lost weight.
As he stood before U.S. District Judge Dennis Chin in the packed and emotionally volatile courtroom in downtown Manhattan, where the 71-year-old ultimate symbol of greed was sentenced to the maximum 150 years in prison on the sunny morning of Monday, June 29, 2009, he was visibly thinner. Bernie’s custom-tailored Savile Row suit, one of the ones he’d had cut to match his ultrathin cell phone, hung on him and was no longer form-fitting as he stood to hear his victims’ anger and the judge’s declaration.
The historic day began with nine of Bernie’s victims in his massive Ponzi scheme eloquently and emotionally asking the judge to impose the maximum sentence, not the dozen years the admitted swindler’s attorney had requested, claiming “mob vengeance.” Ira Sorkin told the court, “Vengeance is not the goal of punishment.”
But that’s not the way his victims saw it. They spent almost an hour of the 90-minute courtroom drama voicing their anguish.
“He stole from the rich. He stole from the poor. He stole from the in-between. He had no values,” declared Tom Fitzmaurice. “He cheated his victims out of their money so he and his wife Ruth could live a life of luxury beyond belief.”
Through the nine heart-wrenching soliloquy-like denouncements, Bernie kept his back to his victimized investors, his head bowed, his hands clasped before him or resting on a courtroom table, showing no emotion while some of the speakers wept openly.
Outside the courthouse at 500 Pearl Street, within walking distance of the financial district where Bernie went into business a half-century earlier, dozens of victims had gathered in a sea of reporters, photographers, and TV crews from around the world.
The public and his victims had not heard Bernie’s voice since he pleaded guilty in March, but when the jurist asked whether he had anything to say, Bernie stood and spoke in a monotone, his Queens-based, Noo Yawk-ese accent seemingly stronger than ever. Alone for most of the time in his cell, he hadn’t used his voice much at all.
But then he stood and spoke.
“I’m responsible for a great deal of suffering and pain; I understand that,” he acknowledged, presumably using words prepared for him by his attorney. “I live in a tormented state now, knowing all the pain and suffering that I’ve created. I’ve left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren.” He said he could not “offer any excuse for my behavior. . . . I thought I could get out of it.... For once in my life I have failed.”
Speaking about his wife, Ruth—next to Bernie the most suspect and reviled in the enormous scandal, though she hadn’t been charged with any crimes—he claimed, “She cries herself to sleep every night, knowing all the pain and suffering I have caused. That’s something I live with as well. . . . How do you excuse lying to my wife and sons?”
He still asserted that none of his family members who were active in the firm knew anything about his crimes—not his wife, or his sons, Mark and Andrew, or his brother, Peter. None of them were in the courtroom, and none of them had sent letters asking the judge to give him mercy.
And then for the first time Bernie turned stiffly to face victims of his fraud who were sitting in the front row of spectators.
“I will turn and face you,” he said, his voice emotionless. “I’m sorry. I know that doesn’t help you.”
The prosecutor, Lisa Baroni, one of a team of federal prosecutors who would continue to probe the crime—looking for the missing billions, and for conspirators—declared that Bernie deserved the maximum sentence, stating that he “stole ruthlessly and without remorse.”
In the end, 55-year-old Judge Chin sent Bernie to prison for the rest of his life. The 150-year sentence was mainly symbolic since, at 71, Bernie had a life expectancy of about a dozen years.
“Objectively speaking, the fraud here was staggering,” Chin told Bernie. “It spanned more than 20 years. . . . Here the message must be sent that Mr. Madoff ’s crimes were extraordinarily evil and that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll.”
Bernie showed no emotion when Chin announced the sentence. When the hearing ended, he was led off. The Federal Bureau of Prisons would have the final say as to where he would live out the rest of his life. It was believed he’d be put away in a minimum-security prison in the Northeast.
It seemed almost anticlimactic.
Uptown, outside the fancy co-op building where Bernie and Ruth had lived in splendor—$18,000 in linen and bedding alone, and $8,500 in silverware—another contingent of reporters, passersby, and hangers-on waited in hopes of catching a glimpse of the fraudster’s wife, who would soon lose all of her homes, though she was granted $2.5 million and there were lingering suspicions that more might be stashed away. With her husband’s sentencing out of the way, prosecutors planned to focus more on other Madoff family members, and more arrests were possible.
The New York Post quoted sources on sentencing day who claimed that Ruth was having doors “slammed in her face” by landlords who were refusing to rent to her. “She has nowhere to go,” an unnamed broker said. It also was reported that the Ponzi King’s wife had begun using her maiden name, Alpern, because “No one wants someone with her name in their building. People like their privacy.”
With Bernie headed up the river to the Big House for good, Ruth, probably on the advice of her legal team, decided finally to say something publicly. She also was placing distance between her and her husband of half a century.
In a written statement, but not facing anyone directly, she declared:
I am breaking my silence n
ow because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie’s crime, which is exactly the opposite of the truth.
From the moment I learned from my husband that he had committed an enormous fraud, I have had two thoughts—first, that so many people who trusted him would be ruined financially and emotionally, and second, that my life with the man I have known for over 50 years was over.
Many of my husband’s investors were my close friends and family. And in the days since December, I have read, with immense pain, the wrenching stories of people whose life savings have evaporated because of his crime.
My husband was the one we (and I include myself ) respected and trusted with our lives and our livelihoods, often for many, many years, and who was respected in the securities industry as well. Then there is the other man who stunned us all with his confession and is responsible for the terrible situation in which so many find themselves.
Lives have been upended and futures have been taken away. All those touched by this fraud feel betrayed, disbelieving the nightmare they woke to. I am embarrassed and ashamed. Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.
In the end, to say that I feel devastated for the many whom my husband has destroyed is truly inadequate. Nothing I can say seems sufficient regarding the daily suffering that all those innocent people are enduring because of my husband. But if it matters to them at all, please know that not a day goes by when I don’t ache over the stories that I have heard and read.
While there would be no annual Madoff company party on the beach in Montauk in the summer of 2009, the intensely scrutinized and pilloried Madoff mate received some welcome news to help her celebrate Independence Day. Reports surfaced in the New York Post and Wall Street Journal that for the present time there was no prosecutable evidence linking her to her husband’s crimes, according to two unnamed sources. A few days later her passport was returned, allowing her to travel. The bad news was that Ruth was roofless after U.S. marshals evicted her and seized the Madoffs’ prized penthouse, forcing her to find new and presumably less luxe lodgings. “Ruth left voluntarily,” her lawyer, Peter Chavkin, stated. But there was a tad of regret as she surrendered the lap of luxury for the last time:The marshals wouldn’t let her take one prized possession—a fur coat; all she was able to walk away with was a straw bag.
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