Dec 18, 2008

Personality - Bernard Madoff

Mark Clothier & Oshrat Carmiel

Dec. 17 (Bloomberg) -- Two weeks ago, Bernard Madoff stopped by the Everglades Barber Shop off Worth Avenue in Palm Beach, Florida, for the usual: a $65 haircut, a $40 shave, a $50 pedicure and a $22 manicure.

“For me, he was a gentleman,” said Senio Figliozzi, 72, the owner of the three-seat barber shop who has been cutting Madoff’s hair for the past 17 winters. “What he did outside, it was news to me.”

What Madoff did outside -- running an alleged Ponzi scheme that may have bilked investors around the world out of $50 billion -- has been the talk of Palm Beach this week. The arrested money manager owns a $21 million home on the Intracoastal Waterway about a mile from the Palm Beach Country Club. He was a regular at the club, where his 9.8 handicap this year has been as steady as the returns he promised investors.

It was those returns that lured Marilyn Lane, 72, and her husband, William, 81, into Madoff’s orbit. The Lanes, who own a Chevrolet and Saturn dealership in Manassas, Virginia, and a place in Palm Beach, invested more than $1 million with Madoff about six months ago.

“He certainly had a track record,” Lane said at Green’s Pharmacy and Luncheonette, a popular Palm Beach breakfast and lunch spot. “Everyone you spoke to highly recommended him. It wasn’t like you were going with a fly-by-night scheme. You think.”

Many of those who gave their money to the 70-year-old Madoff say the same thing: He was gregarious, generous and highly regarded -- all excellent qualities for an alleged con man. Whether they met him at the Palm Beach Country Club or in Montauk, Long Island, where he owned a beachfront home, or in New York, where he lived with his wife, Ruth, in a duplex on East 64th Street, most were impressed with his credentials and his manner.

Table in Front

“He’s very personable, very charming,” said Jerry Reisman, an attorney in Garden City, New York, who recalls meeting Madoff five or six years ago at the Glen Oaks Country Club, a golf course in Westbury, New York. “He moved in the best circles. He was a pro at it. He was probably one of the best social networkers in America.”

Now Reisman, a lawyer with Reisman, Peirez & Reisman in Garden City, New York, is representing 10 people who invested with Madoff and say they lost a total of about $150 million.

At the Palm, a steak restaurant in East Hampton, New York, manager Tomas Romano says Madoff has been a regular for 20 years. He always insisted on a table in the front of the restaurant, Romano said, and was often surrounded by well- wishers. Many of the people listed as victims of Madoff’s fraud, he noted, were also customers of the Palm.

Mystery Adviser

“Even Spielberg,” he said, referring to filmmaker Steven Spielberg, whose Wunderkinder Foundation had money invested in Bernard L. Madoff Investment Securities.

“It’s like when you profile somebody,” Romano said. “You say, ‘No, this person couldn’t do that.’”

If Madoff enjoyed himself in public, his advisory activities were a mystery to most people at the company he founded in 1960, said two employees who declined to be identified, citing concern they might be drawn into the probe.

The firm occupied several floors of what is known as the Lipstick Building on Third Avenue in midtown Manhattan. Madoff’s market-making and proprietary trading units were on the 19th and back-office functions on the 18th, the employees said. The advisory operations were on the 17th floor, which wasn’t linked to the others. There was little interaction between the groups, according to the employees. The units used separate computer systems, a person with knowledge of the arrangement said.

Draw the Blinds

Madoff’s sons, who ran the market-making and proprietary units, told employees their father kept them in the dark about the advisory unit, the employees said. While Madoff seldom appeared on the 18th and 19th floors during the workday, he was known to inspect during the evening for sloppy desks or window shades that weren’t fully drawn, one of the employees said.

Madoff lived about 10 blocks from the office in an apartment in a tan-brick building on the corner of Park Avenue and 64th Street that he bought in 1990 for $3.325 million, according to county real estate records. He also owned a 55-foot wooden fishing boat that he bought in 1977 for $462,000. The yacht, built in 1969 by Rybovich & Sons in Riviera Beach, Florida, is called “Bull.”

Both Madoff and his wife were born in Queens. Bernard graduated from Hofstra University in Hempstead, New York, in 1960 and served as a trustee from 2004 until he was suspended on Dec. 12, according to Stu Vincent, a spokesman for the school. Ruth graduated from Queens College in 1961. She joined the board of the Queens College Foundation in 1993 and voluntarily stepped down from her job as secretary of the foundation several days ago, said Phyllis Cohen Stevens, a spokeswoman for the school.

‘You’re Finished’

Ruth Madoff, who also has a master of science degree in nutrition from New York University, co-edited a cookbook in 1996 called “The Great Chefs of America Cook Kosher.” The book contains recipes for kosher dishes by well-known chefs, such as Daniel Boulud and Wolfgang Puck.

The couple has two sons -- Mark, 44, who graduated from the University of Michigan in Ann Arbor in 1986, and Andrew, 42, who graduated from the University of Pennsylvania in Philadelphia in 1988. The family was very close, according to a person who knows the Madoffs, and both boys went to work at their father’s firm after graduating from college. Madoff’s brother, Peter, also worked at the firm, as chief compliance officer.

Mark and Andrew have both lost millions of dollars, the person said, and they haven’t talked to their father since his arrest.

There are plenty of people in Palm Beach and elsewhere who would like to talk to Madoff, if only to find out how everything could have gone up in smoke.

“This town isn’t about class or culture,” said Laurence Leamer, a Palm Beach resident since 1994 and author of “Madness Under the Royal Palms: Love and Death Behind the Gates of Palm Beach,” which will be published in January. “This town is about money. Bernie was revered because he had money. If you lose your money, you’re finished.”

To contact the reporters on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net; Oshrat Carmiel in New York ocarmiel1@bloomberg.net.

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