EXCERPT: 'The Madoff Chronicles' by Brian Ross

Brian Ross Madoff Chronicles Book cover - ABC NewsABC News
Brian Ross Madoff Chronicles Book cover - ABC News

ABC News chief investigative correspondent Brian Ross' new book, "The Madoff Chronicles," provides an in-depth look at the lifestyle of Bernie and Ruth Madoff. The chapter excerpt below provides a detailed account of the incidents leading up to and following the arrest of Madoff on allegations of swindling $50 billion out of investors.

After reading the chapter below, head to the "GMA" Library to find more good reads.

Chapter One: The Arrest

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"Ike, it's Bernie."

The voice on the phone betrayed Bernard Madoff's Queens upbringing but sounded surprisingly young for a seventy-year-old man. And surprisingly calm, given the circumstances.

"I'm in the FBI office and I'm handcuffed to a chair," Madoff told his lawyer as he broke the news of his arrest for what would soon emerge as the biggest fraud scheme in Wall Street history.

Ira Lee Sorkin, a white-haired, veteran New York trial lawyer known as Ike, was visiting his grand-daughter's nursery school in suburban Washington, D.C., when his cell phone rang. It was the afternoon of December 11.

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A former prosecutor in the United States Attorney's office in Manhattan and onetime head of the New York office of the Securities and Exchange Commission (SEC), Sorkin is one of the city's premier criminal defense lawyers. He is as aggressive as they come and not easily caught off guard, but Madoff's call stunned him.

Madoff had called Sorkin ten days earlier and asked to meet with him about a "problem." According to Sorkin, they had been scheduled to meet on Wednesday, December 10, but Madoff canceled the meeting, pushing it back to December 15.

Instead of a day of legal strategy with his defense lawyer, Madoff had decided to set in motion a plan that would involve him confessing to his two sons, Mark and Andrew, and then letting them "do the right thing" and turn him in to the FBI.

He had asked his sons to give him a week to prepare, but events had moved much more quickly than he had planned. Two agents arrived at his Manhattan penthouse apartment at 133 E. 64th Street just before 8:30 a.m.—only twelve hours or so after his sons gave statements to federal prosecutors. Madoff, a meticulous, elegant dresser, was still in his pajamas, bathrobe, and slippers when special agents Ted Cacioppi and B. J. Kang of the FBI stepped off the elevator into apartment 12-A. They sat in his decorator-designed living room, and Cacioppi asked him if there was "an innocent explanation" for what his sons had described.

"No," said Madoff, who then calmly described what he called a "fifty-billion-dollar fraud" that he said he had carried out by himself, with no help from anyone else. The agents told Madoff to get dressed, put him in handcuffs, and took him downtown to FBI headquarters at 26 Federal Plaza, where he was allowed to call his lawyer.

"Bernie, don't say another thing," Sorkin whispered to Madoff on the cell phone, trying not to disrupt the three-year-olds in the nursery school class, and unaware that his client, with no lawyer present, had already made a lengthy—if only partially truthful—confession to the FBI.

From Sorkin's point of view, this was a legal disaster. He would never have advised Madoff to turn himself in and offer up a confession.

"If you have a client who robbed a bank, and there are video surveillance cameras and nine eyewit-nesses, it might be a good idea to have your client turn himself in," Sorkin said. That was not the case with Madoff.

His monumental stock fraud had been carried out in great secrecy. Among the thousands of Madoff's victims were prominent New York financial figures, a number of Hollywood celebrities, some of the coun-try's leading Jewish charities, and thousands of elderly retirees who had put their life savings in Madoff's hands because of his seemingly long and perfect track record of success. In some circles, he was called the "Jewish Warren Buffett."

It would turn out to be the biggest financial crime in the history of Wall Street, far eclipsing the 1980s insider-trading scandals involving junk-bond financiers Michael Milken and Ivan Boesky. They were small-time operators compared to Madoff.

At the time of his arrest, Madoff's thousands of investors believed they had a total of $64.8 billion in accounts with him, even more than he had estimated to his lawyers and the FBI. The clients received monthly statements showing a series of trades in blue-chip stocks, and a reliable 12- to 20-percent rate of return, year after year, even in rough markets when everyone else was losing money.

It was all a lie. There were no trades. There were no double-digit returns. The money that came in from new clients was used to pay the existing clients their fabulous profits. It was a classic Ponzi scheme that would have made its namesake, Charles Ponzi, proud. Ponzi was an Italian immigrant who became a multimillionaire in Boston running a scheme from 1919 to 1920 that took about $15 million (about $160 million in today's value) from some forty thousand investors. Like Madoff, Ponzi promised impossibly high rates of return and had potential clients begging to invest. The scheme worked only as long as new money kept coming in so he could pay existing customers what he promised.

Ponzi's scheme collapsed in less than a year. Madoff's scheme ran for decades, fooling both gov-ernment regulators and financial experts.

Until December 10, 2008, Madoff's fraud was still unknown to both the victims and the government, and given those circumstances, Sorkin could have had an advantage in fashioning a defense. He could have controlled when and how to come forward to the FBI and Department of Justice prosecutors and reveal what had happened. He might have been able to come up with an explanation for the missing billions that would have minimized Madoff's exposure to criminal prosecution.

"Maybe you say it was the bad market, maybe you say he lost his marbles," said one of the people briefed on the case. "Maybe you blame the evil government. You still need twelve people to vote to convict, and you really only need to persuade one to hold out. Maybe it takes a year or two, and then if you lose, you appeal, and the judge lets you stay in the apartment. That's three or four more years not in prison—that's a lot for someone his age."

But Madoff's arrest and confession scuttled any hope for that plan. He had his own plan. "I'm running out of batteries. I'm going to call Dan. Don't say a word," Sorkin ordered Madoff as the lawyer used his remaining battery power to call his partner, Dan Horwitz, to get him down to the FBI office to stop his client from saying anything more.

As he turned back to his granddaughter's classroom, where the teacher was asking the students about the sounds made by barnyard animals, Sorkin was left to wonder why Madoff had turned himself in well before he had to, and without his lawyer's knowledge or presence. Whatever it was that Sorkin might have been able to devise as a legal strategy, Madoff's last-minute decision set in motion a plan designed to protect the inner circle of those who were complicit in the scheme and, more important, shield his sons, his brother, and his wife, Ruth, from any suspicion. By claiming he "acted alone," Madoff saw himself as doing the "honorable thing" and taking all the blame.

Others familiar with the case suspected Madoff had made this dramatic move for a darker reason. They speculated that Madoff feared some of his more unsavory clients from Bogotá and Moscow would be very unhappy to learn their money had disappeared and would not hesitate to express their displeasure. Sonja Kohn, a Vienna-based operative for Madoff who had brought in a number of wealthy Euro-pean investors, was said by investigators to have gone into hiding "from very angry bears." Being under arrest by the FBI was certainly better than being targeted by the Russian mob.

Whatever his motives, people who were around Madoff in those few days after the arrest say he seemed quite pleased with himself. Even in the face of what would have been a devastating series of events for anyone, Madoff maintained the cool, aloof demeanor for which he was well known. He was still on his game.

"The con artist is always going to go for the very last con because that is the nature of their antisocial personality," said former FBI agent and veteran crime profiler Brad Garrett, now an ABC News consultant. Garrett, who profiled and cracked the cases of some of the country's most elusive criminals during his career at the FBI, said Madoff is a classic case of the antisocial personality, someone completely self-absorbed, with no conscience. "?'What's in it for me?' they will ask. 'Is it in my interest to tell you the truth, or to tell you enough of the truth to get you off my back?'?"

By confessing to such a grand scheme, Madoff had caught the FBI and prosecutors completely off guard.

"Antisocial personalities are control freaks," explained Garrett. "And in his mind, getting in front of the FBI was the best thing for him. I think he believed, 'If I admit the shell of what we've been doing and I take all the blame, A, I won't get a super long sentence and B, no one else will be charged.'?"

Within days, Madoff came to believe his plan was working. Prosecutors, desperate for his help in unraveling the enormous scheme, had gone along with Sorkin's request that Madoff not be locked up. They even made concessions when Madoff had trouble meeting the conditions of the $10 million bail imposed by a federal magistrate.

Madoff and his wife, Ruth, easily met the financial conditions by posting their $7.5 million New York apartment and additional cash as collateral for the bond. The judge, however, had also required four "financially responsible persons" to cosign for Madoff. He could find only two: his wife and his brother, Pe-ter. So the government compromised and allowed Madoff to stay free with only two cosigners as long as he stayed in the apartment, obeyed a 7 p.m. to 9 a.m. curfew, wore an electronic monitoring device on his ankle, and arranged for Ruth to surrender her passport. He had already surrendered his.

Many of Madoff's former customers, his victims, were outraged. They were facing bankruptcy and fo-reclosure on their homes because of his crime, and he was allowed to await trial in one of the city's finest apartment buildings, whose other residents included Matt Lauer, the co-host of the NBC News Today pro-gram.

After decades of conning investors and SEC regulators, Madoff thought he had successfully conned federal prosecutors. He believed he could "sell" his version of events and manipulate the agents and prosecutors, who would need months to figure out what Madoff had been doing. He thought "he would be out of prison in time to watch the grandchildren grow up," according to one person who heard what he said after his arrest.

After all, Michael Milken had served only 22 months in prison for what, until December 11, had been considered one of the biggest Wall Street criminal schemes. Madoff seemed certain that "there will be a life after this."

Prosecutors later admitted to associates that they had been conned by Madoff. "We lost round one, but we don't plan to lose any others," one of the prosecutors said.

As smug as Madoff might have been about his ability to deceive the FBI, having his sons turn him in was hardly his ideal scenario. Indeed, his decision to orchestrate his arrest came after a whirlwind three weeks during which he finally concluded that his life of privilege and wealth could not be saved.

As the world's financial system began to collapse in the fall of 2008, with Lehman Brothers and other long-established firms facing disaster, Madoff recognized that the same tsunami would be heading toward him.

His Ponzi scheme had survived previous economic downturns because, in general, his investors, his "marks," were convinced that Madoff represented a safe haven. Like most legitimate hedge funds, he put no restrictions on the ability of investors to withdraw their money at the end of each year. But given the steady 12- to 20-percent returns Madoff had been able to achieve with what were known as his "don't ask" trading strategies, few investors wanted to pull their money out of their accounts with him. Many suspected that Bernie might have been cutting a few regulatory corners, but investors felt that the monthly statements from Bernard L. Madoff Investment Securities LLC "don't lie." His investors had stuck with him through the market corrections of the 1980s and 1990s, and even through the precipitous crash of stock prices that followed the 9/11 attacks of 2001.

But the fall of 2008 was different. Not since the Great Depression had there been such doubts about the stability of the world's economy. Banks were being shut down to prevent runs that many feared could create a domino effect across the country. Consumer confidence was at a record low. Many of Madoff's biggest investors needed to pull some of their money out of the safe haven to shore up losses elsewhere. A few were even starting to question whether he was a fraud. How can he still be doing so well when everybody else is not? What do we know about his secret strategy anyway? Suddenly, Madoff needed $7 billion and he had nowhere near that amount.

His firm's account at JP Morgan Chase, #140081703, had dropped to near zero several times during the fall, and in the end it had only $234 million on deposit. The amount in the account was his cushion, his only cushion, and it was Madoff's daily obsession. Wherever he was—even on vacation in Palm Beach, the Hamptons, Mexico, or France—Madoff would get a report at the end of every day about the flow in and out of the Chase account.

"He would call in around five thirty, and I would always have to have the reports for him," recalled his longtime secretary, Eleanor Squillari.

"There were just two columns of numbers, with names next to them," she said. "One would have a plus in front of it, and the other would have a minus. Bernie had to know those numbers at the end of every day." Investigators believe what she saw was the daily cash in/cash out report of his JP Morgan Chase account.

Another set of figures "had to be filed in chronological order in a very specific place in his office," said Eleanor. "I didn't read that to him." Investigators think those reports were the daily computer runs of clos-ing stock prices that Madoff would consult when he created the fictional trades.

The reports were prepared under the direction of Frank DiPascali, who had managed to become Madoff's chief financial officer despite his lack of a college education or any background in finance. With his pronounced Queens accent and gold chains, DiPascali struck some former employees as being like a character out of Goodfellas, Martin Scorsese's movie about low-level mafia figures and wannabes. DiPascali is one of the few employees investigators believe knew the full nature of the Ponzi scheme and was deeply involved in carrying it out.

"I never got a feel for him as a financial genius," recalled former employee Bob McMahon, who was hired to help maintain and improve the computer system at the Madoff office. "The first time I saw him, I thought he was an electrician or running cable."

Madoff did not need a financial genius. He did not need to know whether the market was up or down, or even whether the firm had made money in trades on any particular day. There were no actual trades, only the fictional transactions. Madoff never made any investments for his clients all those years. Anyone visiting the Madoff offices would have wondered how that could be possible given the hectic activity on the nineteenth-floor trading room. All of the employees on that floor worked for another part of the Madoff business that was legitimate and made trades for large institutional customers. The investment advisory business was completely separate and completely crooked. All that really mattered for that part of the business was the cash flow in and out of the Chase account. All withdrawals had to come out of that account. As with any Ponzi scheme, the scam could continue only as long as more money came in than went out.

Between 2006 and 2008, records showed that the Chase account had an "average balance of several billion dollars." But by mid-November 2008 the daily balance had dropped close to zero on a regular basis. Madoff ordered his London office to sell its holdings in British treasury notes and transfer at least $164 million to the Chase account. Customers had taken out $320 million in November, and only $300 million had come in. Madoff realized there wasn't nearly enough coming in to cover what his longtime clients would want to take out by the end of the year. Madoff needed $7 billion by the end of the quarter.

So he scrambled to perpetuate the scam by trying to recruit new clients and secure more deposits from current clients. People in the office noticed he seemed preoccupied, but few knew why.

"All these heavy hitters were coming in," his secretary, Eleanor, remembers. "I'm saying to myself, Bernie must be doing really well, and he must be under a lot of pressure and that explains why he hasn't been himself."

She would learn a few weeks later just how badly she had misjudged the cause of her boss's anxiety.

In the days before Thanksgiving, Madoff's appointment book shows he met on November 25 with Ezra Merkin, a New York financier and close friend who had $2.4 billion of his clients' money with Bernard L. Madoff Investment Securities. Much of the money Merkin sent to Madoff came from Jewish organizations, including Yeshiva University, where Merkin served on the board of trustees.

As a possible target of the criminal investigation, and facing a range of civil lawsuits, Merkin declined to speak about the meeting with Madoff other than to say, through a public relations spokesperson, that he too had been fooled by "the intricate, fraudulent scheme perpetrated by Madoff."

On that same day just before Thanksgiving, Madoff's wife, Ruth, came into the office and withdrew $5.5 million from an account she had with Cohmad, one of the companies co-owned by her husband, which recruited investors for Bernard L. Madoff Investment Securities. The money was wired to another account. Ruth was preparing for something. She had been by Madoff's side for fifty years and would remain loyal even after the arrest. She had kept the books in the early days in the 1960s and continued to balance the checking account in an office one floor below Bernie's that she still had on the day he was arrested. On Thanksgiving Day itself, Madoff came into the office. "That had to be big," said Eleanor, who could not recall Madoff ever working on any holiday.

"Do you want me to come in too?" she asked him. "No, no, no need," Madoff replied. Then he asked her where the coffee was kept in case his visitors wanted something.

The appointment book, turned over to the FBI and provided to the author by Madoff's secretary, shows he met with representatives of Optimal, the asset management side of the huge Spanish bank Santander.

It's not known if the Spanish bankers were being asked for more money or demanding to pull their money out, but the bank later reported it lost almost $2 billion invested with Madoff on behalf of its clients. A spokesperson for the bank refused to comment on the meeting. Unlike other large funds, Bank Santander says it will reimburse its clients for their losses. After the meeting, Madoff flew to Palm Beach for the rest of weekend, during which he would mark his forty-ninth wedding anniversary.

In the first week of December, Madoff confided to one of his sons that he "was struggling" to raise the necessary funds to cover withdrawals but "thought that he would be able to do so," according to an FBI affidavit. This was a very big red flag for the Madoff sons, who were, at best, blissfully ignorant of their father's scheme until the very end.

Many of his longtime investors said they were "too stretched" to put any more in, but ninety-five-year-old Carl Shapiro agreed to help out. Shapiro, who became a multimillionaire in the garment industry, had been one of Madoff's first "millionaire" investors and had trusted Madoff with his money for forty years. Madoff used Shapiro's son-in-law, Robert Jaffe, to recruit more customers, and earlier in 2008, Madoff had attended Shapiro's ninety-fifth birthday party in Palm Beach.

Shapiro already had about $295 million in accounts with Madoff, and now he agreed to invest $250 million more. People familiar with Shapiro's dealings say Madoff promised "nice, above average returns" for an investment of only a few months.

Now, with Shapiro's money, essentially a short-term loan, Madoff had managed to get his cash account balance at Chase back into the black. He had just scraped by with a huge redemption payout on November 19, but he was still far short of the $7 billion he needed for all the other withdrawals clients had requested. If the checks did not go out, everyone would know Madoff was a fraud.

Two weeks later, Shapiro would learn that the entire $545 million he had entrusted to Madoff was gone.

As the days went by, Madoff was still Mr. Cool to the outside world, and only a few close to him saw the tension building. Madoff's blood pressure shot up, Eleanor remembered. "He was taking blood pres-sure medicine and his back was killing him," she said. "He was walking crooked and we tried to give him a pain patch. He could make it through meetings with investors, but then he would collapse afterward. I'd see him lying on the floor," she said. "His eyes would be closed and his arms outstretched, like a dead person."

Eleanor says her boss never confided in her about what was really going on, but she is convinced he had pretty much given up by early December.

"At one point, out of nowhere, he told me that he was sorry he had been so hard on me," she remembered. "He never said anything like that before. Then he started throwing the mail back at me, saying he didn't want it," she said. "He was so preoccupied, his voice was very low and I kind of felt like I was working by myself."

Still, Madoff tried to keep up outward appearances.

On Monday, December 8, three days before he would be arrested, Madoff hosted a meeting of the board of the Gift of Life Bone Marrow Foundation, which raises money to help Jewish victims of leukemia and lymphoma find bone marrow transplant donors. His nephew, Roger, died of leukemia in 2006, and his youngest son, Andrew, was diagnosed with lymphoma in 2003.

Madoff was chairman of the board of the charity and had served on the board along with a who's who of other wealthy Jewish New Yorkers, including Merkin and real estate developer Fred Wilpon, the owner of the New York Mets baseball team. Many of the board members were also investors with Madoff, in-cluding Wilpon, who reportedly lost "hundreds of millions of dollars." The Mets were later forced to an-nounce they still had enough money to meet the team payroll, despite the losses attributed to Madoff.

As the board members gathered that Monday evening in Madoff's nineteenth-floor conference room, Madoff already knew he would be out of business by the end of the week. People in the room—many longtime friends—would soon learn he had willfully cheated them without batting an eye that night or ever.

"If you don't have a conscience, then that is not a problem for you," said former FBI agent Garrett. "I call them hollow people because on the outside they can smile, they can be charming, they can be en-gaging, and on the inside there is nothing. They have no emotions. They couldn't care less about you. He's thinking, 'I did these people a favor and I'm just going to continue to act as I normally act: smile, shake their hand,' knowing in a few days he might be in jail."

A notice on the Gift of Life Bone Marrow Foundation's Web site says its funds were "not managed by Madoff" but that the losses suffered by many of its contributors "understandably impacted" their charitable giving.

His secretary said Madoff "was his normal self that night" at the charity board meeting.

The next day, Tuesday, December 9, Madoff canceled the meeting scheduled later in the week with his lawyer, Sorkin. He also canceled a meeting scheduled that day with investment banker Ira Harris and his son Jonathan Harris, according to his secretary. They would not talk about their relationship with Madoff, but the secretary said the senior Harris had been meeting regularly with Madoff and appeared to be "giving some advice," but she did not know the subject of the advice. The canceled meeting was to take place in a New York hotel.

There were no meetings on Madoff's calendar for Wednesday, December 10.

Instead, around 10:30 a.m., he asked his two sons, Andy and Mark, and his brother, Peter, to come to his office on the nineteenth floor.

An hour or so earlier, Ruth had again come to the office to withdraw more money from her Cohmad account. She ordered $10 million wired to another account. With the pre-Thanksgiving withdrawal of $5.5 million, Ruth and Bernie now had a $15.5 million stockpile set aside for what was about to happen.

Eleanor knew something unusual was happening when Ruth came in. "She was up to something. I remember turning around and seeing her scoot by me and she just started with this nervous laugh."

Then Eleanor saw the two sons arrive. They appeared to have been summoned to their father's office.

"I thought there was something wrong with the family," she recalled. The marriage of Andy, Madoff's youngest son, had been on the rocks for some time and he already had a girlfriend, Catherine, he had brought around to the office. Some thought she was his fiancée, even though he was still married. His wife, Deborah, would file for divorce the next day, the day her father-in-law was arrested.

The family gathering in Bernard Madoff's office, however, was not about the divorce. Madoff's younger brother, Peter, arrived first. Bernie had told Peter about the scam and the coming collapse the night before, according to a person on one of the Madoff family legal teams. Then Mark and Andy came in. Mark had been told the night before by his father that he was going to distribute all the cash in the checking account as employee bonuses, normally paid in February, because "he had recently made profits through business operations, and that now was a good time to distribute it." Mark knew something was wrong, he later told the FBI, and called his younger brother, Andy, who was less involved with the business on a day-to-day basis. "We have to meet with Dad," Mark told Andy.

Mark and Andy told the FBI that when they challenged their father about the payments, he said he wanted to move the discussion to his apartment, because he "wasn't sure he would be able to hold it together" if they stayed in the office.

After a few minutes, Bernie was through talking. Eleanor says she saw the sons get their father's overcoat, help him on with it, and then walk out of the office.

"Where are you going?" Eleanor asked.

"I'm going out," he said, with the collar on his dark green cashmere coat turned up, shielding his face.

"We're going Christmas shopping," Mark told the secretary.

Eleanor didn't believe it. "I knew something was wrong. They seemed to be pretty anxious, they were in a rush."

Peter stayed behind, giving no indication for the rest of the day that there was any problem.

The two boys and their father climbed into one of the firm's black Cadillacs for the quick trip to Madoff's apartment about twelve blocks away. "They mostly talked about the grandchildren," recalled the driver. "Mark sat in front, and Andrew and his father sat in back."

It was unusual for the three of them to be leaving the office in the middle of the day, and the driver said he sensed something wasn't right.

The sons told the FBI that when they got to their father's apartment, he quickly confessed he was a fraud. "It's all just one big lie," he reportedly said, calling it "basically a giant Ponzi scheme." "I'm finished," he told his boys. "I have absolutely nothing."

After being told by their father that his life had been a lie, that he was a crook and a cheat, Mark and Andy left the apartment and told the driver they were going to get lunch before heading back to the office. But Mark and Andy never returned to the office. Mark and Andy told the FBI that their father asked them to keep quiet about the scam for a week while he "wound up" his affairs. Then, he expected them to contact authorities so they would be the heroes, turning in their own father. At least, that was Madoff's plan.

Instead, his sons immediately called a lawyer, Martin London, the stepfather of Mark's wife, Stephanie. London, now retired from the firm Paul, Weiss, is a famed litigator who represented Vice President Spiro Agnew in the bribery case that led to his resignation. London himself was an investor with Madoff. Realizing the enormity of the problem, London sent the Madoff boys to another lawyer in his firm, Martin Flumenbaum. By 4 p.m. that afternoon, Mark and Andy were in Flumenbaum's law office and by 5:30 p.m. they were giving statements to federal prosecutors and the SEC.

An hour after telling his sons, one of Madoff's drivers took Madoff back to the office and listened in as the boss talked to someone on his cell phone.

"Don't worry; everything is going to be okay," Madoff said to the person on the other end of the call, describing the progress of his plan to have his sons turn him in. "Of course, they were scared shitless," Madoff said into the phone.

Eleanor says she was told the phone call was to Frank DiPascali, and that Madoff told DiPascali that his son Andy "pissed his pants" when his father confessed his crimes. The driver says he took Madoff back to the building, but he never showed up in his actual office on the nineteenth floor, according to Eleanor. She would not have seen him if he had gone directly to the firm's seventeenth floor, where the Ponzi scheme was run and where files and incriminating documents were kept.

Remarkably, hours later Madoff would host the firm's holiday party at Rosa Mexicano, an upscale Mexican restaurant on Manhattan's East Side, famous for its pink pomegranate frozen margaritas. The yearly holiday party was eagerly anticipated by his employees, who always dressed up for the occasion. Sometimes Madoff would come in black tie and Ruth would wear her latest designer dress. On this night, he came in his office outfit, a dark suit. Madoff and Ruth, and Peter and his wife, Marion, attended and, according to employees present, gave no indication that in twelve hours everyone's life would be changed, and not for the better.

Ruth sat down next to one employee and asked what he was going to do for the holidays. "We're going to Florida," Ruth told the employee.

The only thing that seemed strange to some employees was the absence of Madoff's two sons. They did not attend the party. They were busy meeting with lawyers, prosecutors, and the FBI, arranging for their father's arrest the next morning.

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