Unlike Madoff’s sons and wife, about whose knowledge of the crimes the dramatizations seem agnostic, both the HBO and ABC productions make it seem as if Madoff’s chief lieutenant, Frank DiPascali, was in on the Ponzi scheme. But that’s disputed. In fact, DiPascali, who was on the witness stand for almost a month, seemingly convinced prosecutors that he was in the dark about the scheme until close to the end, and that he knew only about a more limited fraud involving bogus investment-advisory trades. DiPascali (who’s played with crude glee by Hank Azaria in The Wizard of Lies) died of cancer shortly after the trial but before he could be sentenced. He was one of six prosecution witnesses who pled guilty. None of those witnesses was sentenced to prison, and lenient sentences were meted out to several of Madoff’s employees who were convicted, in part because the judge found that while they eventually became aware of, or consciously avoided knowing about, unkosher activity afoot, they did not know about the larger scheme. After all, it would be just about impossible to keep a huge fraud going for decades if even a few people knew a lot about it.
Though it may not have been the directors’ intention, the shots of Madoff’s investment-advisory employees scurrying around a scuzzy office two floors below the sleek, high-end proprietary trading floor make it seem as if those employees were explicitly hired to commit fraud by, for example, backdating trades. But often, these employees didn’t grasp that what they were participating in was forbidden. The backdating of trades at Madoff Securities apparently began as far back as the 1970s. Several employees with meager schooling and training, who were not prosecuted and who were too colorless for any movie or miniseries, testified for the prosecution that backdating seemed normal to them because it was all they ever knew. Madoff’s Ponzi scheme may seem obvious in retrospect, but it took a certified fraud examiner with a staff of 60 some 38,000 hours to fully analyze Madoff’s books and records.
In addition to falling short on the secretive and trust-inducing components of Madoff’s character, celluloid substitutes can’t duplicate with nuanced accuracy how persuasive he could be. De Niro and Dreyfuss do a good job of conveying Madoff’s ability to seduce investors through feigned indifference to taking their money, but surprisingly, one of the anecdotes that best typifies Madoff’s persuasiveness never made it onto the screen. Two years before his scheme collapsed, Madoff was subpoenaed to testify before regulators. Disarmingly, he showed up at the SEC without any lawyers, and proceeded to thread his way through a minefield of questions from its attorneys, discoursing with great élan on a hopelessly convoluted investment model, one he called “MA.206,” that didn’t even exist. He assured the regulators that he obeyed all SEC rules, because of course anyone who didn’t would quickly be caught. It was a stellar performance that apparently captivated the SEC lawyers, who asked few follow-up questions, as a transcript that was entered as evidence at the former Madoff employees’ trial shows.