It appears that no one was more surprised by the Securities and Exchange Commission's inability to uncover his fraud than convicted Ponzi schemer Bernie Madoff himself. In a
jailhouse interview released late Friday by H. David Kotz, the SEC's inspector general, Madoff waxed lyrical about the bumbling and bungling of the agency's inspectors and says he was "astonished" that no one caught him earlier.
"It would have been easy for them to see," Madoff said of the clueless examiners and investigators who failed to perform what he called "accounting 101." The interview was among more than
500 exhibits and 6,000 pages of documents Kotz has collected during his investigation of the SEC's Madoff-related actions.
The government's financial cops failed to check such basic information as Madoff's account with Wall Street's central stock-clearing office, not to mention his dealings with the companies that supposedly handled his fictitious trades, Madoff said.
"If you're looking at a Ponzi scheme, it's the first thing you do," Madoff said during the June 17 jailhouse interview. "It never entered the SEC's mind that it was a Ponzi scheme."
The SEC could have easily uncovered the fraud if it had just followed up on their own instincts, instead they took Madoff's word for fact.
Despite the commission's lack of cognis mentis, Madoff said he "was 'worried every time' he was examined or investigated by the SEC, and that 'it was a nightmare for me' because 'it was very basic stuff.' That was the nightmare I lived with." Madoff is now living out a different nightmare in a North Carolina prison.
Meanwhile, it's expected that another figure in the Madoff affair should be headed to prison in the near future. David Friehling, Madoff's accountant and the man allegedly responsible for overseeing his financial activities out of his one-man store front in Rockland County, N.Y., is expected to plead guilty to a variety of charges next week. He faces a maximum of 108 years in prison. -
Donna Block
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