In an exclusive excerpt from Madoff: The Final Word, the Ponzi king’s wife is portrayed as a liar. Trained as a bookkeeper, she regularly reconciled the account that housed the $68 billion fraud for decades. The inside story of why “Ruthie Books” and her two sons were never charged with a crime.
By Richard Behar, Contributor
Ruth “Ruthie Books” Madoff. That’s the nickname FBI agents privately gave to Bernie Madoff’s wife of nearly 62 years, and it’s a fitting one, given that she lied like a mobster on the witness stand when she appeared on 60 Minutes—one of the rare interviews she granted since her husband’s arrest in 2008.
On the show, which aired in 2011, she told Morley Safer that she had worked as a receptionist and bookkeeper at Bernard L. Madoff Investment Securities (BLMIS) from 1961 to 1963, but then left to raise their sons. “And later on, when the boys started to work there,” she added, “we lived within walking distance, and I had an office there where I took care of decorating things and house things and boat bills and managing those things. But I was never the bookkeeper after 1963.”
As with every Ponzi scheme, Bernie Madoff lured in new money by pointing to the mammoth gains being pocketed by those who had already ‘invested.’ But keeping your customers satisfied, even as you swindle them year after year, requires more managerial acumen than you might think. Financial records (with her handwriting on them) and testimony from former employees reveal that Ruth did plenty of work to maintain some of the critical Ponzi bank accounts for decades after the 1960s—and right up until early 2008, the year their bubble busted. “I remember thinking, as I was watching the show, ‘Oh my God, she’s on 60 Minutes lying about her role in the company!’” exclaims former prosecutor Lisa Baroni, who oversaw several years of investigations on Madoff family and employee cases. “What she said was untrue.”
Nobody gave Ruthie Books’ TV claim a second thought at the time, but the feds knew the truth as early as 2009, thanks to information from Frank DiPascali, one of Madoff’s top lieutenants and the feds’ principal informant. “When asked about Ruth’s work with BLMIS, Frank understood that her role was the person who reconciled the Chase 703,” according to an FBI agent who interviewed him in 2009 and included the observation on a confidential summary known in agency parlance as a 302. (During my fifteen years of probing Madoff’s Ponzi, I obtained more than 100 pages of such 302s.)
The “703” was the nickname for the JPMorgan Chase checking account from which virtually all of the Ponzi money flowed. “Reconciliation” in this context, means matching bank statements with other company records of money flowing in and out.) Ruth’s job, in other words, was to make sure the numbers added up, to keep the books tidy.
While both Bernie and Ruth always vigorously insisted she didn’t know anything about anything, it bears repeating that Madoff’s 703 account was the Ponzi. Between 1986 and 2008 alone, the 703 account received deposits and transfers of about $150 billion, almost all of it from investors. (Madoff’s fraud is considered a $68 billion Ponzi, however, because that’s the phantom amount that customers had on their account statements when he was finally brought to justice.)
On one day alone, more than $100 million, at jackhammer speed, shuffled back and forth between the Chase account and one of Madoff’s biggest investors. What did Ruth think while she tallied the figures—day after day after day—from her company office she claimed was mainly used for “decorating things and house things and boat bills”? She was known to have been great at math since her high school days, so that kind of rapid-fire money movement must have raised red flags. Did she ever ask her husband about it? She’s never said.
DiPascali did recall Ruth often seeking “answers about checks that had not cleared or were out of numerical order.” But in 2008, months before the Ponzi exploded, Ruth seemed to curtail her involvement, he said.
DiPascali was corrupt—he pleaded guilty to 10 counts of fraud and died of lung cancer in 2015 while awaiting sentencing—but as stoolies go, he had a sterling reputation with the feds. Over more than four years, he had sat for more than 75 lengthy debriefing sessions with investigators, who told me they never caught him in a lie. And he was hardly the only employee who could speak to Ruth’s enduring role with the 703 account. In 2018, I asked Eric Lipkin, a BLMIS employee who had pleaded guilty to falsifying records, how long Ruth was doing the bookkeeping work from the time he joined the firm in 1992 “Forever,” he said. “She was in the office quite a bit.”
Not every BLMIS employee who fingered “Ruthie Books” was convicted of a crime. There was one witness in the Madoff Five case who was never charged: Winifred Jackson, who worked at Madoff Securities for more than ten years, helping out with the 703 account. Jackson says that when she first began, in 1987, Ruth was the primary reconciler, “catching transposition of numbers, making corrections if need be.”
This does not mean, of course, that Ruth knew her husband’s business was a Ponzi scheme. There is no evidence she did. So why lie on 60 Minutes about the bookkeeping? And given that lie, how and why should we take her word on anything important?
“She was not in the business,” Bernie once insisted to me from prison, where he was serving 150 years for his crimes. “She was not charged with anything. She was not under investigation.” But the truth is that Ruth Madoff definitely was under investigation.
While Ruth’s role in the fraud may have been marginal, her father, Saul Alpern, an accountant, keeps popping up in the Ponzi’s origin story. Saul introduced Bernie to many of his initial investors in the early 1960s. “Saul was the incubator,” says Steven Garfinkel, a former FBI agent who probed the family after Madoff’s arrest. “Like a Silicon Valley venture capitalist putting tech people together, Saul brought con men together.”
Ruth and her sons, Mark and Andrew, had maintained that they first learned of Bernie’s fraud on December 10, 2008—the day before his arrest—when he supposedly confessed to them before leaving for the company holiday party. According to their story, Bernie said he would turn himself in sometime during the next week, prompting his sons to turn him in themselves right away. While many feds believe the story was a ruse—arranged by Madoff to make his sons appear to be law-abiding citizens—no proof has ever emerged that it was a lie.
Either way, Ruth certainly did not act heroically. Her response was to immediately withdraw $10.5 million from one of her BLMIS-linked accounts. (Three weeks earlier she had taken out an additional $5 million.) She apparently didn’t realize—or care—that her husband’s admission meant the music had to stop instantly: no more corporate credit card and no withdrawals of funds that would need to be returned to defrauded investors.
“The boys,” as they were universally known, seemed similarly unconcerned about the legions of innocent, if greedy, investors fleeced by their father. They both protested their innocence to the last—Mark died by suicide in 2010 while Andrew succumbed to lymphoma in 2014—fighting the return of tens of millions to a court-appointed trustee [Irving Picard] overseeing recovery of much of the stolen billions; indeed, they insisted they were still entitled to more than $100 million in deferred compensation. It was only in 2017, eight years after their father pled guilty, that their estates settled with Picard, agreeing to cough up $23 million.
Not a single Madoff family member ever approached the US Attorney’s Office after Bernie’s arrest to offer their cooperation. In the wake of Bernie’s purported confession, Ruth and Peter Madoff, Bernie’s brother, the company’s chief compliance officer, did nothing.
Former FBI agent Garfinkel investigated the Madoff boys and believes the US Attorney’s office should have indicted them both. “Oh, absolutely,” he says today. “They were on the road to being indicted before Mark’s suicide. I thought the evidence was there—not necessarily that they knew that it was a Ponzi scheme, but the way they were benefiting from certain transactions in their IA [Investmet Advisory] account statements.” Fake and backdated stock trades appeared regularly in Mark and Andrew’s accounts. Falsified account statements materialized whenever they needed to show huge assets for personal real estate purchases. Those fraudulent records were handed out to the brothers at their BLMIS trading desk.
In the end, however, prosecutors decided there was not enough evidence to prove beyond a reasonable doubt that Madoff’s sons knew their riches were rooted in a vast fraud. “Willful blindness,” or intentionally keeping oneself ignorant of crimes, is difficult to prove in a court of law. What can’t be denied, however, is that they most certainly should have known. Both had real-world experience in the markets. Moreover, records show that over the last decade of BLMIS’s existence, nearly $800 million was diverted from the phony investment business and moved into the supposedly legitimate trading units the sons personally ran—with their uncle Peter overseeing them—businesses that were bleeding out red during those years. The various BLMIS units became financially incestuous. By the end, nothing was clean.
In 2005, as part of an investigation by the Securities and Exchange Commission, Bernie received a fax from the agency asking for records—including incoming and outgoing email for a handful of employees that included his sons. That sparked a massive document-shredding party, DiPascali told the feds. Andrew, Mark, Peter, and Peter’s daughter, Shana (the company’s compliance counsel), set about destroying “problematic” emails, which DiPascali defined for the FBI as any email “that referenced [IA] customers or could trigger further inquiry by the auditors.” Peter Madoff eventually pleaded guilty to filing false statements with the SEC, as well as cheating on his taxes. (He served roughly nine years of his ten-year sentence and was released in 2020.) Shana narrowly eluded indictment. Reached by phone earlier this year, she declined to discuss anything to do with her BLMIS days. “I’ve moved on,” she said, “and I’m in a very good place, and so I don’t need to go back there.”
DiPascali also emphasized to the FBI that his discussions with Bernie about the day-to-day mechanics of maintaining the Ponzi were often conducted “in front of Andrew, Peter and Mark, and most anyone at BLMIS. No topics were off-limits. No coded language was used.” As DiPascali recalled, if he told Madoff he was having trouble making the desired fake profits for clients, Bernie would respond, “Well, go back and look at yesterday’s opening and use that.” Then he’d turn to Andrew and ask, “What did the market do yesterday?” Anybody with trading experience knew he was talking about picking stocks after the fact and using those prices as the basis for fraudulent “trades.”
“I’m at the end of my rope,” Bernie told DiPascali in the days before his 2008 arrest. “The whole business has been a scam.” A week later, DiPascali told the FBI, he walked into Bernie’s office to find him talking with Peter “about the history of BLMIS and how the fraud went all the way back to [his first two non-family investors in the 1960s] and that Peter did not seem shocked by any of this.”
As for Ruth Madoff, now 83 and residing in an assisted-living facility near New York, she still has her supporters. “I love Ruth,” Elaine Solomon, who was once a secretary to Bernie and finished her career working for Peter Madoff, told me in 2011. “I think Ruth has been the biggest victim in all of this. These people who say Ruth should have known—you know, you should walk in somebody’s shoes before you make such a comment. She lost everything. The love of her life for fifty years. Her sons, her friends.”
Even her husband, who was accused of being a sociopath, claimed he had plenty of regrets. “What I did was terrible,” Bernie Madoff told me in one of our prison interviews. “I’ll never forgive myself. But it’s not like I planned it. If I did,” he added with a chuckle, “I would have done it better.”
Adapted from Madoff: The Final Word by Richard Behar. Copyright © 2024. Reprinted by permission of Avid Reader Press, an Imprint of Simon & Schuster, Inc.
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