American Scandal - Bernie Madoff | Sins of the Father | 1

Episode Date: February 16, 2021

Bernie Madoff is young and broke. And he's hungry for a big paycheck. So he sets out for Wall Street. But a market crash forces him to make a difficult decision, one that will haunt him for years.Need more American Scandal? With Wondery+, enjoy exclusive seasons, binge new seasons first, and listen completely ad-free. Start your free trial in the Wondery App, Apple Podcasts, Spotify or visit https://wondery.app.link/rUic7i1hMNb now.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

You're listening to the first episode of this American Scandal season. With Wondery+, you can binge the remaining episodes, listen to new episodes early, and explore more exclusive seasons completely ad-free. Start your free trial of Wondery Plus in the Wondery app, Apple Podcasts, or Spotify today. It's March 12, 2009, in downtown Manhattan. A crowd of people surrounds a federal courthouse, with police officers standing by, their hands on their radios. Journalists and members of the public gather behind a safety rail.

A car pulls up in front of the courthouse and parks. Suddenly, the crowd begins to murmur. Photographers raise their cameras, and when the door to the car opens, a man with silver hair and a dark suit steps out. It's Bernie Madoff, and by now he's used to the feeling of people gawking. It's not just that Madoff is one of the richest men in the world or a legend on Wall Street. Madoff has been making international headlines recently for other reasons. Three months ago, he was arrested and charged with committing

one of the largest acts of fraud in the history of finance. The newspapers have made him to look like a monster. And as Madoff walks up the stairs and into the courthouse, he knows that today the public is hungry. But he isn't going down like a monster. And as Madoff walks up the stairs and into the courthouse, he knows that today the public is hungry. But he isn't going down without a fight. He believes that there is still a chance he could walk away a free man. Madoff enters courtroom 24B and takes a moment to compose himself. The air is hot and stuffy, but Madoff tightens his tie, buttons his jacket. He knows he has to be poised and collected, no matter how scared he actually feels. Because soon he's going to make a statement that

will change the course of his trial. Madoff walks over to the defendant's table and takes a seat. Soon a courtroom door opens and the judge enters in a flowing black robe. The room falls silent as the judge makes his way up to the dais. The court will now hear from Maureen Ebel. Madoff winces and glances right. He sees a 60-year-old woman approaching the stand. She's wearing a cheap purple suit and looks worn down. This is bad news for Madoff.

He hoped that today he'd get the chance to just enter his plea and make himself look like a decent person, someone who shouldn't go to prison. But with this move, the judge has now allowed witnesses to give testimony before Madoff speaks. The older woman takes a seat on the witness stand, and the judge looks down from his bench. Miss Ebel, you've asked to speak today before I hear the plea of Bernie Madoff. May I ask why? Because I want everyone to know what kind of creature stands on trial today. And what, Miss Ebel, did he do to you? Ebel pauses and bites her lower lip.

Last year, on December 11th, I got a call. It was 10.45 p.m. It was my uncle. I figured calling that late, there must have been some kind of disaster or maybe a death in the family. So why did he call? He told me that Bernie Madoff, this man sitting right here,

has just been charged with fraud. I gave Bernie my entire life savings and my uncle told me all the money was gone. Miss Evil, how much money did you lose? Everything. All of it. I spent a lifetime working as a nurse. My late husband left me his savings. Altogether, $7.3 million, and it was all gone.

I had to sell everything. I even started picking up nickels on the sidewalk. All because of this man. Evil points a finger at the defendant's table. Madoff takes a deep breath. This looks bad. But the trial isn't over, not yet. The judge bows his head and looks back at Ebel.

What do you hope will come from this day, Ms. Ebel? I pray that Bernie Madoff will suffer nothing less than the full weight of the law. Ms. Ebel, thank you for your testimony. As Ebel descends from the stand, she glares one last time at Madoff. But he knows he needs to give her a gentle nod, one that shows that he understands her pain. Because court is no different from the outside world. Appearance is everything.

The judge then calls the next witness, and soon he calls the one after that. Madoff listens patiently to an onslaught of anger and recrimination. Finally, the judge asks Madoff to rise. He reminds Madoff that he's been accused of a large number of crimes, including securities fraud,

money laundering, perjury, and theft. The maximum sentence is 150 years. The judge then asks Madoff how he wishes to plea. Madoff holds his head up. He's always been good at persuading people to do what he wants. And right now, he needs to channel that skill to save himself from prison. Because he knows it's not too late.

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At the center of it all, the 737 MAX. The latest season of Business Wars explores how Boeing allowed things to turn deadly and what, if anything, can save the company's reputation. Make sure to listen to Business Wars wherever you get your podcasts. From Wondery, I'm Lindsey Graham, and this is American Scandal. In 2008, Americans lived through one of the largest economic collapses in the nation's history. Workers were laid off, retirement accounts seemed to vanish overnight, and countless people lost their homes.

This crisis would come to be known as the Great Recession, and as it unfolded, many began to glimpse two very different realities in America. There were those who struggled to stay afloat, and then there were those who were rich and only getting richer. It was late that year when the public learned how one man had made a massive fortune. He was a financier named Bernie Madoff, and he was accused of leading an elaborate financial scam. Thousands of investors had lost their money, including charities, teachers, blue-collar workers, and synagogues. Madoff was instantly reviled as one of the greatest conmen in American history. Yet Madoff had also been a legend on Wall Street. He was even the former chairman of the stock

exchange Nasdaq. And as details of his story trickled out, the nation was left to wonder how, for decades, could Madoff have tricked investors and the federal government? And how was he able to conceal his secrets from even his own Sins of the Father It's late July 1956 and nearly 53 years before Bernie Madoff will stand trial in a federal courthouse. Today, it's a hot summer afternoon in Queens, New York, in a small suburban neighborhood where the air is heavy and humid and filled with the sound of air conditioners. Everyone seems to be indoors, cooling off and watching TV. But Bernie Madoff isn't so lucky. With a loud clang, he bangs his wrench against his sprinkler head, but it won't budge.

He wipes his forehead, digs his feet into the grass, and hits the sprinkler again. It still doesn't move. And so with one last try, he heaves all his weight into the wrench, and finally it turns slightly. Madoff collapses in relief as a bead of sweat drips into his eye. Bernie Madoff is working his summer job, installing a new sprinkler system for a neighbor. It isn't how he wanted to spend the summer after his senior year in high school. He wishes he could be out swimming

and goofing around with his friends, but he had no choice. He had to make money. There was no other option, not after everything that happened with his father. Madoff leans forward and begins to tinker with the broken sprinkler. That's when he hears his name being called. He looks over and sees the lady of the house. She's an old friend of Madoff's mother, and she's standing at her front door, waving him over. Madoff gets up and wipes his pants. Then he trudges over to the front door. The woman tells Madoff that she needs to go shopping, and so she's going to pay him now. She rummages through her purse, searching for money. Madoff waits on the porch and peers inside the house. He sees one of his classmates sitting in the

living room watching TV. The boy's laughing, drinking lemonade. He looks like he doesn't have a care in the world. Madoff wipes the sweat from his face. He looks down and notices a dirty smudge on his hands. He'd give anything to be inside and watching TV, doing almost anything other than the sweat and frustration he's been experiencing all day. But it doesn't matter how badly he wants it. Relaxing in front of a TV is out of the question. For one, Madoff's family doesn't even own a TV. Not anymore. They had to sell it, just like they had to sell everything else. Madoff's father made some bad business decisions, and he went bankrupt again. That's why Madoff has spent this whole

summer installing sprinklers. It's the only way he can make money. Madoff looks up at the woman standing in the doorway. She finishes searching through her purse and lays $4.50 in his hand. She nods and says it's not a mistake. She included an extra dollar. It's for Madoff and for his family. Then she gives Madoff a smile that drips with pity and tells him everyone is worried. Madoff squeezes the money in his fist. His face burns with humiliation. More than anything, he wants to hurl the money at this woman and tell her he doesn't want her charity. He doesn't need it. But he knows he can't do that because it's true. He and his family do need every dollar and cent they can get.

So Madoff smiles and thanks the woman. He takes a last look at his classmate, who's still lounging in front of the TV. And then he heads back out onto the lawn and into the sun. Madoff kneels down on the grass and yanks at the sprinkler head. He then pauses and shuts his eyes. It's right then that he makes up his mind for good. Someday, he's going to make money. Lots of it.

Because he won't ever let himself feel this small again. A year later, Bernie Madoff sits in his family's living room, waiting for dinner. His stomach grumbles, and Madoff grits his teeth, feeling annoyed and impatient. Bernie's father, Ralph, sits nearby on an old couch. Ralph taps his foot and keeps flipping the pages of a Life magazine. He nearly tears the pages out as he flips them angrily. The magazine is now several months old, but it's all they've had for entertainment. And Bernie knows his father is sending a clear message.

He's angry and tired. But Bernie doesn't believe his father has any right to be angry. There's a reason they don't have a TV or anything else to read. There's a reason that dinner is late. And that reason is Bernie's father and his failures as a businessman. Ralph ran a manufacturing business and was involved in stock trading. And after some bad decisions, he had to file for bankruptcy. And that's why these days, Bernie's mother has to support the family.

After his father's business went under, his mother took a job in a local blood bank. That means dinner has been coming later and later, as she puts in extra hours for a little more money. Bernie watches his father flip through the pages when suddenly he feels something inside him snap. Hey, Pop. Enjoying your old magazine? Of course not. All we've got is garbage. Yeah, but it's our garbage. The garbage we know. I'd take that garbage over a new TV, or new magazines, or a new radio. Boy, you think's our garbage. The garbage we know. I'd take that garbage over a new TV or new magazines or a new radio.

Boy, you think you're funny? Well, maybe I'm not funny, but I am hungry. I'm tired of waiting. Well, I'm not the one in charge of dinner, so blame your mother. Well, I would if she weren't also the one paying the bills. Bernie watches as his father's cheeks grow flush. Ralph sits down the magazine and his nostrils begin to flare. You think I'm not good enough for this family, don't you? No, all I'm saying is you could learn a lesson or two from Mike's dad. You're talking about Art Lieberbaum? Now what do I have

to learn from that schmuck? Oh, about a million things. He bought stock in Polaroid and just yesterday, Polaroid went public on the New York Stock Exchange. Now he's a millionaire. Overnight. I'd say that's a lesson you could learn. Bernie sees his father grow visibly tense. He knows that he's picked a fight, and he probably just wounded his father's pride. It's no secret that Ralph had been hurting ever since his business went under. He seems angry whenever he's reminded that his wife is the breadwinner. But Bernie knows that sometimes people are like horses. They just need a kick to get them going.

Still, his father scowls and shakes his head. Yeah, well, I guess some guys have all the luck. There's nothing lucky about buying that stock. He made a choice, and he doesn't pretend like he's a victim. At that, Ralph rises from the couch. He steps up to Bernie and holds his face inches away. Now you listen to me, kid. Some people get lucky, some don't. And mark my word, Lieberbaum's going to find out that luck runs in streaks. With that, Ralph Madoff turns and stomps away. Bernie exhales and sinks back into his chair,

and he stares off into the kitchen. Dinner still won't be ready for a while, not until his mother gets home from work. Bernie's stomach grumbles audibly, but despite his hunger, he suddenly feels a small electric tingle of excitement. He realizes there's nothing special about Art Lieberbaum. If he made a million dollars,

then Bernie can make that kind of money too. It's 1959. Bernie Madoff lies on his twin bed reading an article in the Wall Street Journal. It's about how technology is revolutionizing finance. The industry is changing rapidly, and there are now millions of dollars up for grabs. Madoff finishes the article and lets the paper drop to the floor. He gazes around his bedroom, feeling a wave of bitterness rising inside him. Two years ago, Madoff resolved to get rich, to make something of himself. But somehow, he's still living in his parents' house, and he's still poor. His life does not look like it's supposed to. In part, that's because he let his mother, Sylvia,

convince him to go to law school. She said being a lawyer was a safe way to make money and get some stability. At the time, he thought she was right. But now, sitting in his childhood bedroom, he can't believe he went along with the plan. He's now in his early 20s, engaged to get married, but still broke and still living at home while he finishes law school. It feels like high school all over again. Making things worse, he doesn't like law school. The law has no buzz, no speed, no risk or reward. It makes him feel like he's sitting still, going nowhere.

Bernie rises and looks out the window. High above, he can make out the white trail of a soaring airplane. It's hurtling through the sky, going somewhere fast and somewhere far away. Bernie swallows hard. He knows it's time to make a decision. It's time to start living the life he wants. So he turns and leaves the bedroom. Then he makes his way downstairs, where he finds his mother, Sylvia, wiping the counters. He stands in front of her, his heart racing, his palms sweaty, but he knows what he has to say. A moment later, his mother looks up, and Bernie makes the announcement. He's quitting law school. He's going into finance. That's his dream, and he needs to pursue it. Sylvia sits down a rag and stares at Bernie. He knows that he needs to

start explaining himself. So he tells her about all the new things he's seeing in the world. Jets are soaring through the skies. There are computers that can run calculations thousands of times faster than a person. With technology, everything, everywhere is on the cusp of revolution. With so much changing, there are now new ways to make a fortune. And that's what he's going to do. Sylvia doesn't speak. She just looks at Bernie with tired eyes. Bernie knows that she lived through the Great Depression.

She watched her husband fail multiple times while trying to make a quick buck. He knows that that's the last thing she wants, for him to take a risk with his future. Sylvia steps forward and says exactly that. But she also says she's worried about something else. No reputable firm would hire a Jewish kid from Queens. Madoffs live in a different world from all those titans of finance. So, she asks, where does Bernie plan to work? Bernie looks down at the floor, gathering courage. Then he tells his mother that he's going to start his own shop. All the other

firms are slow, steeped in old ways, and that's why he'll have the advantage. He'll use technology, and he can guarantee he'll have the advantage. He'll use technology, and he can guarantee he'll come out the winner. Sylvia picks up her rag and once again begins wiping down the counter. With a quiet voice, she tells Bernie that his father used to make the same kind of promises. Bernie feels himself grow cold. He's not like his father. All his father does is sit around, complain, blame others for his own failures. That's not how Bernie lives. He knows that life is a series of choices. You can choose to be successful, or he can choose to get left behind. Bernie Madoff has chosen to be a winner. So he turns, walks away from his mom,

heads back to his bedroom, and starts to plan everything he's going to pack. He can't live at home much longer, and he won't live like this anymore. Off in the distance, he can hear the rumble of another jet that's slicing through the air. And all at once, he feels driven with a sense of purpose. Soon, he's going to make something of himself. And soon, he's not only going to make millions, he's going to revolutionize Wall Street. He was hip-hop's biggest mogul, the man who redefined fame, fortune, and the music industry.

The first male rapper to be honored on the Hollywood Walk of Fame, Sean Diddy Cone. Diddy built an empire and lived a life most people only dream about. Everybody know ain't no party like a Diddy party, so. Yeah, that's what's up. But just as quickly as his empire rose, it came crashing down. Today I'm announcing the unsealing of a three-count indictment, charging Sean Combs with racketeering conspiracy, sex trafficking, interstate

transportation for prostitution. I was f***ed up. I hit rock bottom, but I made no excuses. I'm disgusted. I'm so sorry. Until you're wearing an orange jumpsuit, it's not real. Now it's real. From his meteoric rise to his shocking fall from grace, from law and crime, this is The Rise and Fall of Diddy. Listen to The Rise and Fall of Diddy exclusively with Wondery Plus. I'm Jake Warren, and in our first season of Finding, I set out on a very personal quest to find the woman who saved my mom's life. You can listen to Finding Natasha right now exclusively on Wondery Plus. In season two, I found myself caught up in a new journey to help someone I've never even met. But a couple of years ago, I came across a social media post by a person named Loti.

It read in part, Three years ago today that I attempted to jump off this bridge, but this wasn't my time to go. A gentleman named Andy saved my life. I still haven't found him. This is a story that I came across purely by chance, but it instantly moved me and it's taken me to a place where I've had to consider some deeper issues around mental health. This is season two of Finding, and this time, if all goes to plan, we'll be finding Andy. You can listen to Finding Andy and Finding Natasha exclusively and ad-free on Wondery Plus.

Join Wondery Plus in the Wondery app, Apple Podcasts, or Spotify. It's 1962. Inside a small office in downtown Manhattan, Bernie Madoff paces nervously. Any minute now, a meeting is set to begin. A meeting that could make or break his startup Inside a small office in downtown Manhattan, Bernie Madoff paces nervously. Any minute now, a meeting is set to begin. A meeting that could make or break his startup business, Bernard L. Madoff Investment Securities. Madoff is just 24 years old and has put his hopes and dreams into this company, along with all of his savings. Finally, he's working as an investor. He has the chance to make some real money.

But right now, he's close to broke, which is why this meeting has to go perfectly. Madoff continues pacing through his office, but then stops to admire a big machine sitting on a desk. It's an IBM 1401 mainframe computer. Stacks of punch cards sit on the computer's panel. This machine is what cost Madoff and his brother, Peter, all of their money. They had faith that the new technology would give them an advantage on Wall Street. But now he's about to learn whether that faith was misguided. There's a knock on the door and Madoff opens it.

Standing before him is his brother, Peter. He looks solemn and says their guest has arrived. Bernie nods, stealing one last glance at the computer. He only hopes this gamble will have been worth it. Then he turns his frown into an easy grin and steps into the hallway. Bernie passes through the office and smiles at his beautiful wife, Ruth. She winks back. Just like Peter, she also works for the firm.

It's a family business. But that's not what sets them apart. And that's not how Bernie's going to sell his services to the man who's now standing in front of him. Carl Shapiro is small in stature, but he's a major force in the world of business. Shapiro's a king in the garment industry, and he's the owner of a vast fortune. He's also connected to a network of wealthy investors. A mutual friend introduced them, and today Madoff is hoping to convince Shapiro to invest in the firm. If all goes well, maybe Shapiro will recommend the firm to some of his friends. The two men shake hands, and then Bernie and Peter launch into their pitch.

Bernie explains that their firm has a distinct advantage. Peter is an expert with technology, and with their mainframe computer, they can run trades 300 times faster than their closest competitors. Shapiro squints and asks why that matters. Bernie leans forward and smiles. He explains that by using their technology, they'll be able to get money into Shapiro's pockets before the other guys even have time to write up a deal. Trading faster means making more money. Shapiro sits still, his expression inscrutable. Bernie has seen this look before, though, and he knows what it means. This man thinks Bernie is either stupid or crazy. Either way, the answer will be a no. Either way, the answer will be a no.

But then, without breaking eye contact, Shapiro nods and says, All right. He'll send Madoff $100,000 to start an account. And if he likes the results, he'll send more. Then Shapiro stands and walks out of the office. For a moment, Bernie Madoff is stunned. He turns to Peter with a look of disbelief. But then Peter jumps out of his chair and wraps Bernie in a hug.

All at once, the truth hits him. They have money, real money, more than they could ever imagine. And now he's got a connection to an entire network of investors. Things are happening, and they're happening fast. But as his brother, Peter, and his wife, Ruth, break into celebration, Bernie is hit with another stark truth. Bernie has to deliver on his promises. 17 years later, a man walks up to the entrance of a large beach house in Montauk, New York.

The sun beats down on his pale skin and puma sneakers. The man takes out a Marlboro Red and lights it up. As he takes a deep drag, he breathes in the salty smell of the Atlantic and catches a hint of expensive designer perfume. The world smells different out here on the tip of Long Island. It's different from Queens, New York, for sure. That's where this man, Frank DePascali Jr.,

has spent most of his life. DePascali is 22 years old, and he still thinks of himself as a poor kid from a tough neighborhood. But what he sees here at this beach house is the future he wants for himself. He drops a cigarette and grinds it out. Then he heads inside. As soon as he enters the house, he catches a glimpse of Bernie Madoff standing on the deck with his friends. They're all in polos, wearing shiny Rolex watches. They look tan and powerful.

DiPascali is certain that these are the kings of the world. This isn't the first time he's seen Madoff. DiPascali works for Madoff's company, which after about two decades has grown into one of the most powerful investment firms in New York. The company is a living example of the American dream. Madoff started with nothing

and single-handedly built himself an empire. DePascali has felt lucky to be part of all the action, working alongside Peter Madoff, Bernie's brother. Still, even after four years at Madoff Securities, no one at the company seems to know DePascali. Some even mistake him for the janitor. That's why he came here today, to this beach party at Bernie Madoff's new house. DePascali knows it's time to make a move and start climbing higher up the ladder.

He'll do whatever it takes to start living like Madoff, like a king. DePascali weaves his way through the house, past men and women in designer sunglasses. He knows he doesn't look like someone who belongs here. But D. Piscali puffs up his chest and keeps walking. He won't let their judgment get in the way. D. Piscali steps out into the yard, where paving stones stretch from the pool to the deck. That's where Madoff is standing right now, talking with a group of men. As D. Piscali stares at Madoff,

he can sense a glow that hovers over this legendary investor. He has the reputation as New York's King Midas. Everything Madoff touches turns to gold. A minute later, Madoff looks up and catches DePascali's eyes. He smiles and waves him over. DePascali walks across the yard, listening to the sound of waves crashing on the shore. Soon, he reaches the deck, and Madoff claps him over. D. Piscali walks across the yard, listening to the sound of waves crashing on the shore. Soon, he reaches the deck,

and Madoff claps him on the shoulder. Madoff chuckles, says he noticed that D. Piscali was doing a bit of staring. He asks whether D. Piscali likes what he sees, the beachfront property, the bottles of champagne, the beautiful women. D. Piscali raises his eyebrows,

and tells Madoff it's an easy yes for all three. Madoff laughs and mentions that there was no hesitation in D. Pascali's answer. D. Pascali gazes out over the property and says to Madoff that when you know what you want, you go for it and you don't apologize or make excuses for yourself. Madoff pauses. D. Pascali notices a slight smirk on his face and for a moment he feels a rising sense of fear. Should he have been more respectful, more professional? He shouldn't have talked like some thug in the streets, perhaps. But then Madoff claps him on the shoulder again and tells DePascali to follow him. Together, the two walk to the edge of the deck and stare out at the ocean.

Madoff then tells DePascali that he's heard about him. Madoff's brother, Peter, speaks highly of him. He says that DePascali isn't just smart and good with tech. Peter says that DePascali is a neighborhood guy, someone you can trust. Then Madoff turns to DePascali and asks if he'd be interested in taking on more responsibility. And again, without hesitation, D. Piscali says yes. He'll be tireless, and no matter the situation, he'll remain loyal to Madoff. It's a bond that won't be broken.

Madoff takes a sip of champagne as he looks out over the ocean again. He tells D. Piscali that it's all set then. He should report to Madoff on Monday, and not his brother. Then he turns and walks back to the party. D. Piscali feels a warm glow filling his whole body. He knows that just now he received the golden touch

from King Midas himself. And from here on out, nothing can go wrong. It's eight years later on Monday, October 19th, 1987. Bernie Madoff stands with his eyes closed, trying to calm himself, trying to drown out the noise. He knows he needs to focus. For a moment, he goes to that quiet place. Just him and his thoughts and a voice that says he can get through this,

that he's not going to lose, that it's not his time yet. Madoff opens his eyes. All at once, the noise returns. Voices shouting, bodies rushing by in every direction. Stock traders grab their faces in agony and shout orders into their phones. Madoff watches the madness unfold inside the headquarters of Bernard L. Madoff Investment Securities. Despite the chaos, Madoff Investment Securities. Despite the chaos, Madoff feels ready to take action. He's now 49 years old and knows how to manage a crisis.

And this appears to be the mother of all crises. Madoff looks at a wall monitor where stock prices stream by at a relentless pace. Alongside all of those numbers, red arrows point down. Right now, the market is in free fall. And it's not just a minor blip. The market hasn't plummeted this much and this quickly since 1929. Already, people are calling the day Black Monday. It's bad, and Madoff isn't laboring under any illusions. The market could wipe out everything he's built over the last 25 years.

And not just his wealth, but today could destroy his reputation too. Madoff has grown to be a legend on Wall Street, and the media has called him a genius. But Madoff knows that could all disappear unless he acts fast. And that's what he plans to do. So Madoff races out of his office and heads downstairs to the 17th floor. Madoff enters the office and spots his loyal associate Frank DiPascali. DiPascali is dressed in a fine suit. He's come a long way from the rough streets of Queens and from his early days at the firm. Now he looks the part of a rich, successful trader. But even with a quick glance, Madoff can see the terror and anxiety on DePascali's face as he cradles a phone on his shoulder. Bernie, Bernie, people keep calling. They want to cash out. What do I do? Hang up the phone.

But these are clients. Hang up on them, Frank. They'll call back. DePascali drops the phone and waits for Madoff to speak. Listen, Frank, the market's in free fall. That means everyone is in free fall. People are panicking. Yeah, no kidding they're panicking. Their money is evaporating. Okay, that's what they believe. But what if the money isn't disappearing?

What are you talking about? It's disappearing. Look at these prices. It's a dumpster fire. Listen, Frank, and listen closely. Every person who calls, you tell them we're's a dumpster fire. Listen, Frank, and listen closely. Every person who calls, you tell them we're seeing a massive market correction. But you also say that I saw it coming. That's crucial that you tell them that I was prepared. Say that last week I moved all

their money into treasury bills, government bonds, 100% safe. Got it? Tell them that they haven't lost a dollar. DePiscali rubs his temples, looking very worried. Madoff knows that he's just instructed DePiscali to lie. Bernie, our clients want their cash. So what am I supposed to do? You pay them. Pay them? With what money? We have money. There are other people who aren't cashing out. Wait, no, no, we can't. We can't mingle accounts. I can't. I can't steal from one to pay another. Frank, we're not stealing. Don't say words like that. It's borrowing. It's temporary. And as soon as the market recorrects, we'll restock those accounts. And what if the market doesn't come

back? Well, then we're dead anyway, right? This at least gives us a chance. Madoff can see the look of anguish on DiPascali's face. This plan is clearly making him uncomfortable.. Madoff can see the look of anguish on Deepascali's face. This plan is clearly making him uncomfortable, so Madoff leans in. Frank, years ago you told me you'd be loyal, a bond between the two of us. You'd do what I needed you to do. Well, this is the day, and now is the time. So pick up the phone and do what this firm needs you to do. DePascali swallows hard. Then he picks up the phone and begins to recite the story. Bernie Madoff saw this coming. He protected all of his clients. The money is safe. Madoff feels his muscles relaxing. He feels good, in control. Because even as the rest of the

world panics, Madoff knows he'll stay on top. He'll fix this little problem when the time is right. And in the meantime, he'll continue to rake in millions of dollars and remain the King of Wall Street. On January 5th, 2024, an Alaska Airlines door plug tore away mid-flight, leaving a gaping hole in the side of a plane that carried 171 passengers. This heart-stopping incident was just the latest in a string of crises surrounding the aviation manufacturing giant, Boeing. In the past decade, Boeing has been involved in a series of damning scandals and deadly crashes that have chipped away at its once sterling reputation. At the center of it all, the 737 MAX. The latest season of Business Wars explores how Boeing, once the gold standard of aviation engineering, descended into a nightmare of safety concerns and public mistrust. The decisions, denials, and devastating consequences bringing the Titan to its knees.

And what, if anything, can save the company's reputation? Now, follow Business Wars on the Wondery app or wherever you get your podcasts. You can binge Business Wars, The Unraveling of Boeing, early and ad-free right now on Wondery Plus. It's June 1992 and five years since the market crash known as Black Monday. Today, Bernie Madoff is at home in his luxury penthouse in Manhattan. He's drinking coffee, reading the financial news as he prepares his investment strategy for the coming year. Black Monday may have devastated the market, but Madoff's firm has survived just fine. It's true, Madoff hasn't fully replenished the accounts that he borrowed

money from. But so far, all his clients have remained happy, and Madoff has remained on top of the financial world. He's now not only a legendary investor, he's the chairman of Nasdaq. Madoff flips another page of the newspaper when his phone rings in the other room. He stands and strides across marble floors up an elliptical staircase into his library and picks up the phone. Hello, this is Bernie. Bernie, it's Michael Pianis. Madoff scratches his chin. He and Pianis are business partners,

and the man used to work alongside Madoff's father-in-law. But it's not like Pianis to call Madoff at home. Michael, what can I do for you? Bernie, this is serious, so I'll get right to it. I'm under investigation. It's the SEC and it's looking bad. The feds? What are they howling at you? Well, it's not just me, Bernie. It's both of us. Both of us? What do you mean both of us? You're an accountant. What does my

investment firm have to do with your business? That's the thing. I'm an accountant. But how long has it been since we started investing with you? 30 years? Yeah, about 30 years. Yeah. So you know where this is going. It's not our own money. It's our client's money. We've been taking their money and investing it with you, which we're not allowed to do because of the SEC rules. I know what the SEC rule says. You're not licensed. You're accountants. But you've been investing your client's money. That's right. And let me guess, now you want all your client's money back.

Well, it's not that we want the money back. It's that we need it back. How much? I don't have the books in front of me. Madoff waits for a response, but the line goes quiet. Michael, what's the total? Bernie, it's $441 million. And you need all of it? Plus any interest. And if I don't get you the money? Yeah,

then the SEC isn't just going to come after me. Madoff hunches forward and rubs a hand through his hair. He knows he has no choice. He has to come up with the money. If he doesn't, the SEC will start digging around and they'll learn the truth. They'll see how he siphoned off money from his own client's accounts and he'll go to prison. But he has a problem. He doesn't know how he's supposed to get that kind of money. Paying out $441 million could ruin him. Madoff stands and begins to walk around his library.

He knows that there's a silver lining here. There always is. Somehow, he'll figure it out. But in the meantime, he has to keep Bienes from making things any worse. So with a steady voice, he tells Bienes not to worry. He'll get him the money soon. Two weeks later, Frank DiPascali sits in front of a computer screen, staring at rows and rows of green text. There are client names, investments, dollar figures, and a blinking cursor waiting for his command. DiPascali chews on the rim of a styrofoam cup. Cold coffee sloshes around at the bottom. Then he bangs the table and stands up. He can't do this.

He can't follow the orders that Bernie Madoff just gave him. Madoff told him to liquidate every one of their accounts, all of them, all the clients, and all their investments. DiPascali was then supposed to pool the cash without saying anything to the clients. Madoff said this was their only option. They needed to come up with $441 million, otherwise they were done. For days prior, DePascali had been trying to help Madoff come up with the money.

The methods they thought about were unsavory, including skimming off the top of big-dollar investors. But even then, they were still hundreds of millions of dollars short. So now it's come to this. In five minutes, when the stock exchange opens, DePascali is supposed to initiate the sale orders. He rises and hurls his chewed-up cup of coffee into the trash. DePascali knows he can't do this.

He may have come from some rough streets, and he may have done some illegal things in 87. But this is something else entirely. This is theft at the biggest scale. So DePascali makes a decision. He picks up the phone. He needs to call the police and go on record before anything happens. He knows he'll get charged for the other crimes, but that's nothing compared to this. Then, right as DePascali begins to dial, the door bursts open and Madoff enters the office. Madoff's wheeling in a three-foot-tall IBM computer,

ranting that he's got a solution. It's going to fix all their problems. So DePascali sets down the phone. He looks at Madoff, waiting for an explanation. Madoff walks over and sits down on the desk. Then he explains the new scheme. Madoff walks over and sits down on the desk. Then he explains the new scheme. Madoff says that he found a couple of people who agreed to invest $50 million in the next two weeks. Madoff smiles and said that $50 million is of course less than $441, but it will help them cover their tracks. DePascali frowns and asks Madoff what he's talking about.

Madoff continues, explaining that they'll still liquidate all the investments from all their clients, but they can take the new $50 million and add it to the new bank account. With this pool of cash, they can then pay investors. Tell the clients that the money comes from their actual investments, from dividends on stock. Money is money, and the clients won't know the difference. Madoff then gets up and walks over to the IBM computer. He gives it a pat and smiles. Then he tells DePascali that it's this machine that's the key.

DePascali just needs to program the computer and get it to spit out fake reports. Those pages will look like real dividend reports from real companies. The clients will still get paid, and they'll stay happy. And over time, Madoff and DePascali will make things right. They'll dig themselves out from this hole. DePascali stares at Madoff. He's dumbstruck. Madoff wants to add another layer of deception and theft on top of his already insane scheme.

If they do this, there's no coming back. Madoff looks up at the clock. D. Pascali follows his eyes. It's 9.30 a.m. The exchange is now open. Madoff approaches D. Pascali with a coldness in his eyes. He says there are two options. They can run this Ponzi scheme, which will buy them some time,

or the two of them can go to prison for everything they've already done. D. Pascali feels lightheaded and dizzy. He wants to lie down to sleep and think this over. But Madoff isn't waiting. He commands D. Pascali to begin selling. He reminds him to sell everything. Then Madoff walks out the door and shuts it behind him. D. Pascali looks back at the computer screen.

He stares at the rows of green text, the list of clients' names and their investments. It doesn't feel real, just numbers on a small screen. And it's then that D. Pascali realizes that Madoff is right. He's out of options. He's already a guilty man. There's nothing else he can do. So he begins typing a command on the keyboard. It appears in green letters on the screen.

Sell. Then he goes down to a second line and types it again. And again. He continues, line after line, until his eyes begin to blur and it doesn't seem like he's doing anything wrong. eyes begin to blur, and it doesn't seem like he's doing anything wrong. When he finishes, DePascali sits back in disbelief. He and Bernie Madoff have just launched one of the biggest scams the world has ever seen. From Wondery, this is episode one of four of Bernie Madoff from American Scandal. On the next episode, Madoff fights an investigation by the government and a financial analyst begins digging into Madoff's record, raising alarms about a potential Ponzi scheme. To listen to the rest of this season of American Scandal,

start your free trial of Wondery Plus in the Wondery app, Apple Podcasts, or Spotify. With Wondery Plus, you can listen to other incredible history podcasts like American History Tellers, History Daily, Tides of History, and more. Download the Wondery app today. If you'd like to learn more about Bernie Madoff, we recommend the book The Wizard of Lies by Diana Enriquez. This episode contains reenactments and dramatized details. And while in most cases we can't know exactly what was said, all our dramatizations are based on historical research.

American Scandal is hosted, edited, and executive produced by me, Lindsey Graham for Airship. Audio editing by Molly Bach. Sound design by Derek Behrens. Thank you.