Rather than build up this gigantic, elaborate fraud, could Bernie Madoff have lived a high lifestyle on his market making business? Maybe, but mainly that business was operating at a loss.
Turns out that was just a front to get people into his Ponzi scheme. At least that’s what an anonymous ex-employee tells The Daily Beast’s Lucinda Franks:
The company could have been profitable but the Madoffs didn’t seem to care. The business model made no sense,” said the employee. “In actuality the trading groups were generating profits and the company had enormous potential.”
The employee was part of a trading group, who were able to break the code which he says led them to a site that was supposed to be seen only by the Madoff family. It showed the profits and losses of the legitimate businesses. Even in years when they grossed $25 to $50 million, they calculated in the outlandish costs and thus concluded that the firm barely broke even and some years lost money.
Sources in the Madoff investigation confirm the losses that the employee described to me.
Another amusing tid-bit: The sons, Andrew and Mark Madoff, actually showed up at the office the day after dad’s arrest. But they didn’t have much to say, other than that their lawyer told them not to say anything.
Business Insider Emails & Alerts
Site highlights each day to your inbox.