Madoff Calls Government a "Ponzi Scheme"

"The whole new regulatory reform is a joke," convicted schemer said

Monday, Feb 28, 2011  |  Updated 1:24 PM EDT
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Wall Street swindler Bernard Madoff said in a new magazine interview that new regulatory reform enacted after the recent national financial crisis is laughable and that the federal government is a Ponzi scheme.

"The whole new regulatory reform is a joke," Madoff said during a telephone interview with New York magazine in which he discussed his disdain for the financial industry and for its regulators.

The interview was published on the magazine's website Sunday night.

Madoff did an earlier New York Times interview in which he accused banks and hedge funds of being "complicit" in his Ponzi scheme to fleece people out of billions of dollars. He said they failed to scrutinize the discrepancies between his regulatory filings and other information.

He said in the New York magazine interview the Securities and Exchange Commission "looks terrible in this thing," and he said the "whole government is a Ponzi scheme."

A Ponzi, or pyramid, scheme is a scam in which people are persuaded to invest through promises of unusually high returns, with early investors paid their returns out of money put in by later investors.

A court-appointed trustee seeking to recover money on behalf of the victims of Madoff's massive Ponzi scheme has filed a lawsuit against his primary banker, JPMorgan Chase, alleging the bank had suspected something wrong in his operation for years. The bank has denied any wrongdoing.

Madoff is serving a 150-year prison sentence in Butner, N.C., after pleading guilty in 2009 to fraud charges.

In the New York magazine interview, Madoff, 72, also said he was devastated by his son Mark Madoff's death and laments the pain he wrought on his family, especially his wife.

"She's angry at me," Madoff said. "I mean, you know, I destroyed our family."

Mark Madoff, 46, hanged himself with a dog leash in his Manhattan apartment on the second anniversary of his father's arrest. He left behind a wife and four children, ages 2 to 18.

At the time of his suicide, federal investigators had been trying to determine if he, his brother and an uncle participated in or knew about the fraud. The relatives, who held management positions at the family investment firm, denied any wrongdoing.

Bernard Madoff has maintained that his family didn't know about his Ponzi scheme.

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