Updated news on the Gambino, Genovese, Bonanno, Lucchese and Colombo Organized Crime Families of New York City.

Friday, December 11, 2009

Bernie Madoff, the $19 Billion Con, Makes New Friends Behind Bars

Bernard L. Madoff's life of country clubs and luxury homes ended when federal agents arrested him at his Manhattan penthouse apartment exactly one year ago. But he is adjusting to his new life behind rows of gleaming silver razor wire in this small Southern town. Inmate No. 61727-054 shares an unlocked cell at the medium-security prison at Butner Federal Correctional Complex with a younger man named Frank. He wears khaki prison garb and has been spotted walking on an outdoor track. He plays bocce, chess and checkers. He scrubs pots and pans in the prison kitchen.

The architect of the biggest Ponzi scheme in history has served about five months of his 150-year prison sentence. WSJ's Dionne Searcey discusses Bernie Madoff's life in lockup.
The 71-year-old Mr. Madoff also is salvaging something that disappeared in the outside world the moment his fraud was exposed: respect. "To every con artist, he is the godfather, the don," says an inmate interviewed earlier this week.
Mr. Madoff has served about five months of a 150-year prison sentence for pulling off the largest Ponzi scheme ever. Losses suffered by Madoff customers are estimated at $19.4 billion.
"All things considered, he's OK," says Ira Sorkin, Mr. Madoff's lawyer. "He still suffers deeply for what he did."
A description of Mr. Madoff's prison life has emerged from interviews with current and former inmates at Butner and various lawyers, including some who have met with him in prison.
Officially, Mr. Madoff is just another inmate in a federal prison that houses men convicted of crimes including embezzlement, bank robbery, espionage and drug dealing. Nancy Fineman, who represented investors in a suit against his wife, Ruth Madoff, interviewed him this summer. She says he mentioned chatting with fellow inmates such as reputed Colombo crime-family boss Carmine Persico and Jonathan Pollard, an American imprisoned after admitting to spying for Israel more than two decades ago. Other high-profile inmates at Butner include former Rite Aid Corp. vice chairman Franklin C. Brown, who was convicted of crimes tied to accounting irregularities at the drugstore chain.
Prison spokeswoman Denise Simmons declined to comment on Mr. Madoff's life behind bars other than to say that all inmates are treated fairly. Several people in Butner (pop. 6,169) who run businesses frequented by correctional officers say guards have been told they'll lose their jobs if they talk to the media about Mr. Madoff. Mr. Sorkin declined a request to interview Mr. Madoff.
Ex-convict K.C. White says he sketched Bernie Madoff in Butner prison.
Butner Federal Correctional Complex has typical features of prison life, according to the Bureau of Prisons. Inmates rise at 6 a.m. and report for mandatory work duty by 7:30 a.m. An August prison log reviewed by The Wall Street Journal shows that he worked in a maintenance job at Butner at that time. Inmates are paid between 12 cents and $1.15 an hour, depending on the job, which could include groundskeeper, plumber or kitchen crew.
Lights are turned off at 11 p.m. There are gangs and a thriving black market for smuggled luxuries, a current inmate says, such as liquor, shrimp, chicken and cigarettes, which can fetch $10 apiece. Inmates can manufacture military clothing, take Spanish classes and learn heating and air-conditioning repair. Internet access is strictly forbidden, so inmates rely on the word-of-mouth prison rumor mill called "inmate.com."
The informal code of prisoner conduct is strict: Mind your own business. Don't try to find out anyone's inmate number because it could be used to determine a prisoner's criminal record, which is considered private. Don't walk uninvited into another inmate's "cube," or cell. Don't wake anyone who is sleeping. Don't change the TV channel when someone else is watching.
Shortly after arriving at Butner in July, Mr. Madoff told Ms. Fineman and her law partner that he was fending off inmates who wanted to make a buck off his notoriety. "People wanted his signature because they wanted to sell it on eBay, so he wouldn't sign anything," she says.
Back then, Mr. Madoff was sleeping in the bottom bunk and exercising every night by walking around the track. He didn't express interest in attending religious services, but told the two lawyers that he liked the food and people he had met in prison.
"To me, it was all like he was on stage," Ms. Fineman says, comparing the interview to a performance. "He was well-spoken and you could tell he thought about what he was going to say. He's just used to being in command and telling his story."
Some of Mr. Madoff's fellow inmates suspect he has money hidden somewhere and try to cozy up to him in hopes of learning its location. But correctional officers keep a close watch on Mr. Madoff and don't allow groups to crowd around him.
"He looks like the rest of us doing time," says the inmate who asked not to be identified. "He just acts like a normal guy."
Prison officials won't say who has visited Mr. Madoff, though one inmate says Ruth has made the 500-mile trip from New York.
Associated Press
Bernie Madoff arrives at Manhattan federal court in March. A year after he was arrested at his Manhattan penthouse, he is adjusting to prison life at Butner Federal Correctional Institution in North Carolina
Kenneth Calvin "K.C." White, whose prison sentence in Butner for bank robbery overlapped with Mr. Madoff's for several weeks this summer, says he met him in the line where inmates await medication.
Mr. White is an artist who painted several murals throughout the prison. Mr. Madoff struck up a conversation, saying: "You're the guy who does all the pictures around here," Mr. White recalls.
According to Mr. White, Mr. Madoff chatted about the fraud's aftermath, claiming he "carried" employees at Bernard L. Madoff Securities LLC for more than two decades, yet wound up with an astronomical prison sentence. "I guess he felt they turned their back on him," Mr. White says.
Still, Mr. Madoff seemed proud, walking around the prison with his head held high. "He carried on like he'd been doing time for years," Mr. White says.
Mr. Madoff asked Mr. White to paint his portrait, so the bank robber drew a fast sketch in the prison paint shop where Mr. Madoff worked at the time, according to Mr. White.
Mr. Madoff told Mr. White he didn't want to be depicted in his prison khakis, Mr. White says, so he drew him in a suit and tie.
Harlene Horowitz, who lost her Brentwood, Calif., home and other assets in Mr. Madoff's Ponzi scheme, says she thinks he should be in a tiny cell and barred from human contact.
"For someone who lived so high, he can't be happy in his surroundings," she says.



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