Madoff: SEC Never Thought It Was a Ponzi Scheme

FILE - In this March 10, 2009 file photo, Bernard Madoff exits Manhattan federal court in New York. ...

FILE - In this March 10, 2009 file photo, Bernard Madoff exits Manhattan federal court in New York. A reader-submitted question about selling and distributing Madoff's assets to those who have proof of being involved in his scam is being answered as part of an Associated Press Q&A column called "Ask AP." (AP Photo/Louis Lanzano, file)

(AP)

Bernard Madoff was apparently convinced that it never even occurred to Securities and Exchange Commission staff he was running a Ponzi scheme, despite the agency's numerous probes of his business.

A document released Friday details a prison interview conducted on June 17 by the SEC inspector general in which Madoff says he had the impression that "it never entered the SEC's mind that it was a Ponzi scheme."

There were some shades of boasting even as Madoff sat in jail a few months after pleading guilty to fraud. The only problem with officials at the SEC's Washington headquarters, Madoff said, is that he had "too much credibility with them and they dismissed" the idea of a Ponzi scheme.

The disgraced financier confided that he didn't bring an attorney with him when he testified in an inquiry by the SEC's enforcement division because he believed he didn't need one — and he was trying to fool the government investigators into thinking he had nothing to hide.

The details emerged in a summary of Inspector General David Kotz's interview with Madoff at the Metropolitan Correctional Center in New York, released along with hundreds of other documents related to Kotz's extensive investigation of the SEC's stunning failure to detect Madoff's fraudulent scheme for 16 years.

As the SEC inspectors carried out probe after probe of his business, Madoff said in the interview he was "worried every time" that he'd be caught. "It was a nightmare for me," he said. "I wish they caught me six years ago, eight years ago."

Madoff, 71, a former Nasdaq stock market chairman, pleaded guilty in March to charges that his secretive investment-adviser operation was a multibillion-dollar Ponzi scheme that destroyed thousands of people's life savings and wrecked charities. It was possibly the largest-ever Ponzi: the classic scheme in which investors are paid with other investors' money rather than actual profits on their investment.