Madoff Used Investor Funds As A “Piggy Bank,” to Pay for Massages

The ongoing investigation into Bernard Madoff and his personal and business financial dealings continues, as does the flood of scandals that have left scores of victims in Madoff’s wake. According to Irving Picard, the special trustee investigating Madoff’s businesses, Madoff used investor funds “at his whim and desire” as a “personal ‘piggy bank,’” reported Newsday, citing a filing made late yesterday.

Picard stated that Madoff used “tens of millions of dollars” belonging to investors for the benefit of his wife, Ruth; his brother, Peter; and other family, reported Newsday, including a $9 million loan made to his brother, Peter, in 2007. Newsday also described millions paid in “capital calls for investments” Ruth handled for a variety of companies. Picard described Madoff’s activities as “pilfering,” said Newsday; the recent filing is the first to describe such pilfering activities.

Madoff pleaded guilty to 11 fraud counts on March 12. The former chairman of the NASDAQ stock exchange ran an investment advisory business for decades that was, in fact, a massive Ponzi scheme. Last November, Madoff told his investors that his fund held more than $65 billion, but in reality, he only had a fraction of that amount.

In another Newsday report, Madoff’s secretary of over two decades, Eleanor Squillari, talked about how Madoff timed his arrest, his lack of cooperation, his flirtation, and his penchant for paid massages. Squillari spoke to NBC’s “Today” show saying that she thinks Madoff is protecting others involved in the historic scandal that robbed investors of life savings and, because of this, is not cooperating with the authorities, said Newsday. Squillari also spoke to ABC’s “Good Morning America” to promote an article she co-wrote for Vanity Fair magazine about her time with the disgraced financial criminal. The article says that Madoff was “flirtatious” and “made sexually aggressive remarks,” according to Newsday, which added that Squillari saw Madoff looking through a magazine’s escort ads and often visited massage parlors.

“Once, I looked in his address book and found, under M, about a dozen phone numbers for his masseuses,” she wrote in the piece.
“If you ever lose your address book and somebody finds it, they’re going to think you’re a pervert, I said,” quoted Newsday. Squillari said the famed Ponzi schemer often spoke in sexually-charged terms saying such things as, “‘Oh, you know you’re crazy about me,” reported Newsday adding that Squillari also said that when Madoff would exit his bathroom—situated diagonally across Squillari’s desk—he would often be zipping his pants. If Madoff caught Squillari shaking her head in disapproval, he would respond by saying, “Oh, you know it excites you,” she wrote, said Newsday.

Of financial interest, Squillari wrote about a conversation with Madoff that occurred years ago after he learned that a client’s secretary was arrested for embezzlement; Madoff said, “You know, [he] has to take some responsibility for this. He should have been keeping an eye on his personal finances. That’s why I’ve always had Ruth watching the books. Nothing gets by Ruth,” according to Squillari, wrote Newsday. Madoff continued, she wrote, saying, “Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big.”

Authorities and bilked investors have long suspected Ruth Madoff was integral to Madoff’s financial scheming. Ruth has yet to be charged with any crime.

Squillari worked with the FBI for a couple of months, assisting in the search for evidence against the imprisoned former money manager, said Newsday.

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