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This week, on a special edition of The Bottom Line podcast:

Host Curt Nickisch takes us inside the mind of Harry Markopolos, the finance geek in the mismatched tie, who tried for 10 years to bring down Bernard Madoff. Harry is still coming to terms with the fact he’d always been right, but it didn’t do any good. Hear the special Bottom Line report.

You can also read transcripts of Curt’s three-hour interview with Markopolos and see video portions of the interview in WBUR’s Studio 3.

By Curt Nickisch (The Bottom Line)

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VIDEO: Harry Markopolos on trust, his friend's suicide and Catholic school

It was a cold day this past December. Harry Markopolos was at a karate studio, where his twin boys were getting lessons. His phone buzzed with two voicemails from friends of his. That’s when Harry found out his fight was over, and that his nemesis, the man he’d always called Madoff, had surrendered.

“They called to inform me that Madoff had turned himself in and admitted to a $50 billion Ponzi scheme,” Harry says. “I returned those two calls as quickly as I could, and I felt a tremendous burst of energy and then I almost fainted.”

Harry fell against a railing, grabbed it to hold on. What was racing through his mind was complicated. Vindication, definitely. Harry had known Madoff to be a fraud for almost 10 years. And he had told the authorities again and again. Now he knew — they knew — he was right. But there was also sorrow. For people who were just now finding out -– what Harry always knew would happen -– that they had lost everything.

“Since the news broke on Dec. 11, I have not been able to get a full night’s sleep. I wake up and contemplate it in the early hours of the morning. And I always think of the terrible tragedy. It’s just a hard thing for me to live with.”

But Harry can also live with the fact that he tried. This 52-year-old with brown eyes and a little bit of a comb-over turned something that didn’t add up into an obsession.

(more…)

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This week on The Bottom Line podcast:

President Obama arrives for a news conference at the G-20 summit in London on Thursday. (AP)

New revelations in the Bernard Madoff case. Exhibit A? The transcript of a conversation that “never happened” between Madoff and a Connecticut hedge fund funneling billions his way. What was in a letter the company sent to “Dear Bernie” just hours before he turned himself in? Did it accuse him of running what may very well be the most massive Ponzi scheme in history? Hardly.

And troubled waters for the newspaper industry, as it struggles to stay afloat in a sea of online news. So what will the future of news look like? The truth is, nobody knows. But in the meantime, there are a lot interesting experiments going on to find out.

Plus, President Obama makes his first trip to Europe as president for the G-20 summit in London. How’d he do? How’d it go? All this and much more on this week’s Bottom Line podcast.

By Curt Nickisch (The Bottom Line)

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Newly released documents show that one day before Bernard Madoff was arrested for running an alleged Ponzi scheme, a Connecticut hedge fund that funneled to him promised to raise more cash for him.

Massachusetts Secretary of State William Galvin released the documents Wednesday in a regulatory complaint against Fairfield Greenwich Group, saying the company let its investors down.

The documents provide the best insight yet into how these so-called feeder funds – knowingly or unknowingly – raised investor money for Madoff’s Ponzi scheme. E-mail exchanges between employees at Fairfield Greenwich discuss courting wealthy clients, such as in this e-mail.

This is an unusual one…  appetite $50 to $100 million in bites… so worth our time… she has always heard about Madoff, but hears things that scare her… so neutralize the scare with our transparency… this will be a piece of cake.

(more…)

By Curt Nickisch (The Bottom Line)

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Massachusetts Secretary of State William Galvin announced Wednesday his office will sue Fairfield Greenwich Group, a Connecticut-based “feeder fund” accused of fraud in misrepresenting its knowledge of Bernard Madoff’s business operations.

Galvin publicly released the documents that will be used as evidence. The documents give us firsthand insight into how hedge funds raised investor money, feeding it to Madoff — and the questions Fairfield Greenwich allegedly did and did not ask about what happened to that money once it was in Madoff’s hands.

Most of the documents are e-mails from people within Fairfield Greenwich, the chief risk officer and the chief financial officer. And they’re answering questions that come up from clients — how the company vets the investments, how the company does due diligence.

In one e-mail, the employees actually tout the fact they are at arm’s length from Madoff. In another, they talk about how it’s going to be a piece of cake to persuade one financial adviser who’s nervous about investing with Madoff. And then in December, just days before Madoff turned himself in, Madoff apparently calls them to complain that too many clients are taking money out. The Fairfield folks respond with a letter basically sucking up to him and promising to raise more cash, ironically, by today, April 1.

(more…)

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This week on The Bottom Line podcast:

Harry Markopolos, who says he needed about four hours to figure out that Bernard Madoff's numbers didn't add up, sat down with WBUR on Friday, March 13. (WBUR)

Madoff whistle-blower Harry Markopolos scores another, “I told you so.” WBUR’s Curt Nickisch got the only radio interview with Markopolos and his first since Madoff pleaded guilty to one of the largest Ponzi schemes in history. In it, Markopolos said he will not be satisfied until his “helpers, aiders and abettors” are behind bars too. “He had to have had many,” Markopolo said. “Because he had people taking in wire transfers from all over the globe — many billions of dollars — and he also had people making falsified statements for trading records and sending them out — thousands of them…and he also had to send out wire transfers every month…so keeping all that straight, and then dealing with all the feeder funds, and all the private-client banks, and all the fund-to-funds. It was a massive undertaking. He did not act alone. He had help. And I’d like to see the helpers behind bars.”

Well, on Wednesday – just five days after Markopolos spoke to us —  Bernard Madoff’s accountant was charged with fraud. That’s 2 points for Harry now. 

Sen. Charles Grassley suggested on Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves. (AP)

Also, Senator Chuck Grassley tells us he doesn’t ACTUALLY want AIG executives to kill themselves. The Iowa Republican came under some fire this week for this comment:

“The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things: resign, or go commit suicide.”

Well, On Point’s Tom Ashbrook spoke to the senator after his comments and Grassley told him he was speaking rhetorically, but he still had some harsh words for the executives.

We also look into the future for both the housing and auto industries. Without giving too much away, we should mention that there are flying cars involved. FLYING CARS.

Yes, that is a car flying behind a plane. (Terrafugia, Inc.)

Exclusive Bottom Line Report

One man tried for almost 10 years to bring down Bernard Madoff, the disgraced financier who pleaded guilty March 12 to bilking investors in an elaborate Ponzi scheme. Harry Markopolos was the would-be whistleblower who tried, fruitlessly, to get federal authorities to investigate.

Instead, Markopolos was rebuked, and Madoff’s scheme eventually collapsed on its own. Charities, retirement funds, banks and individual investors watched $65 billion disappear overnight.

In his only radio interview, and his first since Madoff pleaded guilty, Markopolos tells WBUR it’s too early to celebrate. “I know that Mr. Madoff had lots and lots of helpers,” Markopolos says. “I want his helpers, his aiders and his abettors behind bars, too, and then I’m going to be satisfied.”

WBUR’s Curt Nickisch talked with host Deb Becker about what’s next for Markopolos.

Selected video excerpts from WBUR’s interview with Harry Markopolos:

On The Madoff ‘Tragedy’

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This week on The Bottom Line podcast: Bernard Madoff pleads guilty to masterminding one of the largest swindles in Wall Street history. One of his alleged victims, Nobel Peace Prize recipient and Holocaust survivor Elie Wiesel, has a few words for him. Also, we catch up with five Bay Staters we spoke to back in October, to see how their lives have changed since the recession began. Plus, how the downward facing dog can cure economic fatigue in a downward economy.

By Monica Brady-Myerov (WBUR)

An alleged victim of Bernard Madoff’s Ponzi scheme, the dean of the Massachusetts School of Law, has written the judge in the case on behalf of himself and others ahead of a guilty plea expected from Madoff today.

The letter, written by Lawrence Velvel on behalf of the Steering Committee of Madoff Survivors, says the judge should remember that not all Madoff victims are billionaires, but they are “little people who worked like dogs all their lives to save up enough money to make an investment.” Velvel says many are completely devastated — financially and psychologically. Velvel asked the judge not to sentence Madoff right away.

LAWRENCE VELVEL: Until Madoff cooperates and/or it is found out by the government that it has learned where all the money went, who got it, where it is now and it tells people all of that in great detail.

Velvel also blames the Securities and Exchange Commission for publicly stating in 1992 that there was no fraud in connection with Madoff.

 Read the full letter from Velvel on behalf of the Steering Committee of Madoff Survivors.

By Deborah Tedford (NPR)

U.S. Attorney’s Press Release (PDF), The Charges (PDF), The Potential Sentence (PDF)

Former investment manager Bernard Madoff pleaded guilty Thursday to 11 criminal charges for allegedly scamming thousands of investors in a Ponzi scheme that spanned at least two decades.

He could be sentenced to as many as 150 years in prison, according to prosecutors.

At least 25 investors who lost money to Madoff have asked U.S. District Judge Denny Chin to be allowed to speak.

Chin had said investors will be given a chance to challenge the court’s decision on whether to accept the plea to securities fraud and perjury, among other charges. The judge also will let burned investors challenge his decision whether Madoff should be allowed to await sentencing in his $7 million Manhattan penthouse or immediately go to prison.

Chin will sentence Madoff at a later date.

Madoff is accused of running a massive Ponzi scheme from to at least the 1980s until his arrest Dec. 11. Prosecutors said he recruited investors to open trading accounts with his companies by telling them he would use their money to buy shares of common stock, options and other securities of well-known companies. Instead, prosecutors claim, Madoff pocketed the money, using money from new investors to pay established clients.

Court documents state that from 2002 to 2008, Madoff caused more than $250 million of his clients’ money to be transferred between the accounts of his businesses. “Madoff directed these funds transfers, in part, to give the appearance that he was conducting securities transactions in Europe on behalf of the investors when, in fact, he was not conducting such transactions,” the criminal information states.

Madoff promised some clients annual returns of up to 46 percent per year, court documents state. Prosecutors said he cheated investors — including friends, retirement funds, charities and nonprofit organizations worldwide — of more than $60 billion.

The information charges Madoff with securities fraud; investment adviser fraud; mail fraud; wire fraud; money laundering; making false statements; perjury; making false filings with the Securities and Exchange Commission; and theft from an employee benefit plan.

The former trader has been confined to his luxury apartment since being released on a $10 million bond after his arrest.