Madoff Jailhouse Interview: More Lies, Say Lawyers in Case

Feb. 16, 2011 — -- Convicted con man Bernard Madoff claims major banks and hedge funds were "complicit" in his massive scam and that he has helped bankruptcy lawyers track billions of dollars in the money he stole.

His comments, made from prison Tuesday to New York Times reporter Diana Henriques, were branded as "more lies" by lawyers involved in the bankruptcy case.

"The man is incapable of telling the truth," said one lawyer of Madoff's claims that his information has helped bankruptcy trustee Irving Picard located missing money.

In the interview, and in earlier e-mails with the Times reporter, Madoff continued to insist members of his family and close friends -- including the owners of the New York Mets -- were unaware of the investment scam that defrauded thousands of victims out of at least $20 billion.

"They knew nothing. They knew nothing," he told the Times.

But Stephen Harbeck, President of the Securities Investor Protection Corporation, told ABC News he doesn't buy it.

"Some of these people were in control or were absolutely in a position to understand what was going on," he said.

Harbeck's comments echo a lawsuit filed against the an investment company owned in part by Mets owners Fred and Jeff Wilpon, close family friends of Madoff's.

The 370-plus page complaint filed in December by the trustee representing the victims of Madoff's scam allege that employees of the investment company, Sterling Equities, were told by an investment partner that Madoff's numbers were "too good to be true" but the company was "in too deep... to do anything but ignore the gathering clouds."

The complaint alleges that after Madoff's arrest in 2008, an employee for a Sterling Equities hedge fund, Sterling Stamos, sent an email in which the employee wrote, "I guess our CIO [Chief Investment Officer] always said it was a scam," the filing says. The complaint also claims Sterling Equities "was aware of and even enabled" Madoff's attempts to avoid regulatory scrutiny by insulating the firm from contact by other clients and their own employees.

Today Jeff Wilpon told reporters he and his father were victims of an "unfair, unfounded" attack for their connection to Madoff.

"We're going to fight [the case] and be victorious in the end," Wilpon said.

Lawyer: Madoff 'Not Even Close' to Helping Bankruptcy Trustee

Henriques, who interviewed Madoff at a federal prison in Butner, North Carolina, described Madoff as "frail and agitated" and "looking noticeably thinner and rumpled in khaki prison garb."

Madoff told the reporter he was upset with the "disgraceful" media coverage of the suicide of his son Mark, who took his life on the second anniversary of his father's arrest in December.

Disputing reports he had refused to attend Mark's funeral, Madoff told the Times the prison would not permit him to attend because of the "public safety issue." Family members told friends they did not want Madoff to attend, out of respect for Mark's disgust with his father's actions.

The Times article does not indicate Madoff's reaction to the suicide itself.

Madoff's assertion that certain unnamed banks and hedge funds were "complicit," is a reversal of his statements in court that he acted alone.

He told the Times the banks were guilty of "willful blindness." Madoff was quoted as saying, "They had to know. But the attitude was sort of, 'If you're doing something wrong, we don't want to know.'"

Madoff said he had met four times with lawyers working for the bankruptcy trustee and boasted his information helped the effort to recover assets for the victims.

"Not even close," said one of the lawyers directly involved in the effort, who commented on the condition his name not be used because he is not authorized to speak publicly for Picard.

Henriques' interview with Madoff, who is serving a 150 year sentence, was conducted as part of her research for a book "The Wizard of Lies: Bernie Madoff and the Death of Trust," set to be published in the spring.