Criminal Justice

In Prison Interview, Madoff Accuses Banks and Hedge Funds of ‘Willful Blindness’

Updated: Bernard Madoff originally claimed that he was the only person involved in the Ponzi scheme that sent him to prison for 150 years. Now he says banks and hedge funds were also “complicit” in the fraud.

Madoff spoke to the New York Times in his first interview since his arrest in 2008. He told the reporter that some banks and hedge funds didn’t examine discrepancies between his regulatory filings and other information available to them—a case of “willful blindness.” He said e-mails and messages revealed in lawsuits showed bankers had doubts about his results.

“They had to know,” Madoff told the Times. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ” He didn’t identify which banks and hedge funds were at fault.

According to the story, Madoff “seemed frail and a bit agitated,” perhaps because of the suicide of his son Mark in December. Madoff said that, contrary to news reports, he didn’t refuse to attend the funeral. Rather, the prison had informed him it would not allow him to attend if he requested it because of safety concerns.

Madoff told the Times in an e-mail that he had helped bankruptcy trustee Irving Picard, who has so far recovered $10 billion for Ponzi scheme victims; Picard later Wednesday told the New York Times he was not present at interviews his legal team conducted with Madoff in prison last summer. Financial entities named in civil suit filed by Picard have denied knowledge of wrongdoing.

Updated at 5:41 p.m. to include Picard’s comments to the Times.

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