'One Big Lie': How Madoff Came Clean

Part 2: After Madoff came clean to his sons, they turned him in to authorities.
5:57 | 10/21/11

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Transcript for 'One Big Lie': How Madoff Came Clean
December 10 2008. Stephanie Madoff is busy decorating her SoHo apartment and getting ready for the holidays. Suddenly she receives a panicked phone call from her husband. More. She was out of breath and He said when there are -- student quits the -- -- I'm -- Stephanie but it's my father my father's done something really bad. Mark comes home ashen and tell Stephanie -- exposed his father the red flag. Bernie was trying to pay out over a 140 million dollars in bonuses two months early. Mark grabbed his brother and confronted their father. He marched into his father's office and said what -- is going on here. And Bernie said I can't tell you here. We have to go home to my apartment and so He and Andy and Bernie left and -- linked to his house on 64 street. And told them that his business would is. Just one big lion and that He was billions in debt. He said that Bernie delivered the news like that flat after flat -- fact no crime -- so sorry and -- also ride and then crash site. Ruth was sitting on a couch like -- -- be saying nothing. Andy fell to his knees and started to cry and my husband. Picked his brother up and said let's get out here. But not before the head of the Madoff -- asked a favor from the sons -- just ruined bug grace period to keep quiet for a week. Instead -- immediately called Stephanie stepfather Marty London who was an expert in securities law. I've seen every kind of action news. This blew me away Bernie Madoff had fooled regulators and the most knowledgeable investors in the world for years. But in the end it would be his sons who would turn -- -- It just goes to show the pathological. Nature. This guy and He says to them -- -- -- -- join with me in the conspiracy. To keep this quiet for a week. While I make illegal distributions. Of the proceeds of my -- They didn't do it and that day and every official. Was notified and pardon was arrested the next morning -- May -- -- the biggest financial time in history. Bernie Madoff. Rational financial. Double digit returns clients received a year after year because of Bernie celebrated magic touch when we're bogus. The truth. Bernie had made a single trade in decades the billions that flowed into his fund were used as his personal piggy bank. None went into the stock market charities are going out of business thousands of people are road. All told 65 billion dollars conned out of investors big and small. Charities churches schools. Even family members like Marty London who remembers how Bernie played him. When Marty asked to invest a chunk of his retirement. -- -- that it would vote. Hesitation -- tomorrow morning. I'm not taking -- more money. -- to move. -- -- -- How could I say no you useful for -- my family your lifestyle family -- Yiddish word from what He was really saying is no my family. So I can steal your money like -- steal money from everybody else in my -- Her -- Stephanie says mark did the right thing but was instantly viewed as being part of Bernie's scam. And -- influences. And they may have to move into my car. Angry victims accused all made -- of living off stolen money suing mark for 66 million dollars He had received from Bernie over his lifetime. But the government demanded more all of -- assets frozen including their beloved Nantucket home. Even money acquired from the business He spent twenty years building with his brother. We felt as if our life had been taken away from us and we kept and looking for the nightmare. To -- and. But it was only the beginning all made offs were believed to be in on the scam with Bernie. The bankruptcy trustee even went on CBS and accused mark and Andrew of being involved the suns who worked under the same roof of them. Should've known and they -- my belief is just a year. You know what honestly I would -- didn't listen to up from the fact. Tax and no facts have come out that my husband or his brother had any part of it. You have any doubt in your mind. About whether mark knew what his father was my husband knew nothing. He knew nothing I could tell how He react to it He was in -- or shock. And you could see that the trail on his face and in his body. And He was destroyed. To date no charges have been filed against either -- neither has even been the subject of a criminal investigation. Nevertheless Stephanie says they lived like wanted people virtual prisoners in their apartment unrelenting scrutiny that was tough for her. But squeezing the life out of more. He physically changed He grilling them -- and -- trying to disguise himself He wore glasses. He was physically hunched over. You couldn't get out He was so betrayed and so. Hurt by Bernie.

This transcript has been automatically generated and may not be 100% accurate.

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