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T h is
docum ent
c o n ta in s
in fo rm a tio n
th a t h a s b e e n
c o lle c te d
in c o n n e c tio n
w ith a n in v e s tig a tio n
c o n d u c te d
b y th e U .S . S e c u ritie s a n d E x c h a n g e C o m m is s io n O ffic e o f In s p e c to r G e n e ra l (O IG ). It c o n ta in s
c o n fid e n tia l, p riv ile g e d a n d s e n s itiv e in fo rm a tio n a n d s h o u ld n o t b e re c o p ie d o r d is trib u te d w ith o u t th e
e x p re s s
c o n s e n t
of the G IG .
In te rv ie w
o f
B e rn a rd
L .
M adoff
A t a p p ro x im a te ly 3 :0 0 p m o n J u n e 1 7 , 2 0 0 9 , In s p e c to r G e n e ra l H . D a v id K o tz a n d
D e p u t y I n s p e c t o rG e n e r a lN o e l l e F r a n g i p a n ei n t e r v i e w e dB e r n a r d L . M a d o f f a t t h e
M e tro p o lita n C o rre c tio n a l C e n te r, 1 5 0 P a rk R o w , N e w Y o rk , N Y . M a d o ff w a s
a c c o m p a n ie d b y h is a tto rn e y , Ira L e e S o rk in o f th e firm o f D ic k s te in S h a p iro , L L P , a s
w e ll
as an
a s s o c ia te
fro m
th a t
firm ,
N ic o le
D e B e llo .
T h e in te rv ie w
b e g a n
w ith
IG K o tz a d v is in g
M a d o ff o f th e g e n e ra l n a tu re
o f th e
O IG in v e s tig a tio n , a n d a d v is in g th a t w e w e re in v e s tig a tin g in te ra c tio n s th e S e c u ritie s a n d
E x c h a n g e C o m m is s io n (S E C ) h a d w ith M a d o ff a n d h is firm , B e rn a rd L . M a d o ff
Investm ent
S e c u ritie s , L L P
(B L M ), g o in g b a c k to 1 9 9 2 .
A t th a t p o in t, S o rk in a d v is e d
M a d o ff th a t h is o n ly o b lig a tio n
w a s to te ll th e tru th d u rin g th e in te rv ie w .
T h e in te rv ie w
b e g a n
w ith M adoff stating
th a t th e p ro s e c u to r
and trustee
in the
crim inal case "m isunderstood"
things he said during the proffer, and as a result, there is a
lo t o f m is in fo rm a tio n
b e in g
c irc u la te d
about this scandal, how ever, he added, "I'm
n o t
s a y in g
I 'm
n o t g u ilty ."
2 0 0 6
E xam :
M a d o ff re c a lle d th a t w ith re s p e c t to th e 2 0 0 6 O C IE
e x a m , " tw o y o u n g
fello w s,"

(L a m o re a n d O s tro w ) c a m e in " u n d e r th e g u is e o f d o in g a ro u tin e e x a m ;" H e s a id th a t d u rin g th a t tim e p e rio d , s w e e p s w e re b e in g d o n e o f h e d g e fu n d s th a t fo c u s e d o n ~ -o n t- ru n n in g , a n d th a t w a s w h y h e b e lie v e d O s tro w a n d L a m o re w e re a t B L M .

M a d o ff re c a lle d
th a t th e y w e re th e re fo r tw o m o n th s , a n d th a t th e y " s p e n t 9 0 %
o f
th e ir tim e lo o k in g th ro u g h e m a ils ." H e o p in e d th a t th is is " ro u tin e fo r th e S E C n o w , th e y
fe e l th a t's
th e w a y th e y fin d th in g s ."
M adoff
s ta te d
th a t
O stro w
a n d
L am ore
lo o k e d
th ro u g h
b a n k
re c o n c ilia tio n s ,
expense accounts,and checks. H e stated that he didn't understand w hat they w ere

lo o k in g fo r. H e s a id th a t h e h a d " to n s o f c a p ita l," a n d s o h e " d id n 't u n d e rs ta n d w h y th e y w e re lo o k in g a t th a t s tu ff." M a d o ff s ta te d th a t O s tro w w a s " s o c ry p tic " a n d th a t h e s p e n t a " h u g e a m o u n t o f tim e lo o k in g a t in v o ic e s fo r e x p e n s e s ." M a d o ff s ta te d th a t h e d id n 't

k n o w
w hat O strow
w a s lo o k in g
for, because
h e w a s lo o k in g
a t c a n c e lle d
checks and
p h o n e b ills . H e s ta te d th a t h e s u rm is e d th a t O s tro w w a s lo o k in g fo r w ro n g d o in g
p e r t a i n i n gt o s o m e t h i n gt h a t w a s g o i n g o n i n t h e i n d u s t r y a t t h a t t i m e , n a m e l y ,p e o p l e
p a rin g
independent contractors.
M A D O FF
E X H IB IT S -0 2 7 9 2
T h is d o c u m e n t
c o n ta in s
in fo rm a tio n
th a t h a s b e e n c o lle c te d
in c o n n e c tio n
w ith a n in v e s tig a tio n
c o n d u c te d
b y th e U .S . S e c u ritie s
and Exchange
C o m m issio n
O ffice
of Inspector
G eneral
(O IG ).
It c o n ta in s
c o n fid e n tia l,
p riv ile g e d
a n d s e n s itiv e
in fo rm a tio n
and should
not be recopied
o r d is trib u te d
w ith o u t th e
e x p re s s
c o n s e n t
of the G IG .
M a d o ff a ls o n o te d
th a t d u rin g th e 2 0 0 6
exam , O strow
in p a rtic u la r k e p t a s k in g fo r
c o m p u te r ru n s . H e s ta te d th a t th e y ta x e d h is c o m p u te r p ro g ra m m e r in th a t th e y " k e p t
a s k in g h e r to d o d iffe re n t ru n s "
and to reform at the m aterial.
M a d o ff s ta te d th a t O s tro w
and Lam ore
asked him , "D o
you do a retail business?"
to w h ic h h e re p lie d
n o .
H e s ta te d , h o w e v e r, th a t " A t th is tim e (2 0 0 6 ), I w a s try in g to
c o n c e a l."
H e a ls o to ld th e m , " I d o n 't
m anage
m o n e y ."
M a d o ff s ta te d th a t " E v e ry th in g
th e S E C
d id p rio r to 2 0 0 6 w a s a w a s te o f tim e ."
W hen
a s k e d
w h e th e r
h e
w as
th e
o n e
w ho
to ld
N Y R O
s ta f f
a b o u t
th e
D C
e x a m
just prior to this, he stated, "Y es", confirm ing
th a t N Y R O
d id n 't
k n o w
D C had done an
exam .
H e said that the SEC N Y RO
staff insisted
it w a s a ro u tin e
exam , and that "w e
h a v e n 't
b e e n h e re in te n y e a rs ." to w h ic h
M a d o ff re p lie d , " Y o u
w ere just here."
(R eferrin g
t o
D C
O C IE
s ta f f ) .
M adoff
re c o u n te d
a
c o n v e rs a tio n
w ith
O stro w :
W O:
" S o te ll m e a b o u t th is a rtic le ."
(O stro w
r e f e r r in g
to th e M a rH e d g e
a rtic le ,
le a n in g b a c k w ith h is h a n d s b e h in d
h is h e a d " lik e L ie u te n a n t C o lo m b o ." )
BM :
"W hat
a b o u t
it? "
(M adoff stated that O strow
w a s " a c tin g
a s if I d id n 't
d o th is b u s in e s s ." )
BM :
" L o ri R ic h a rd s h a s a w h o le
file I s e n t h e r w ith th is in fo .
T h e y h a v e it."
W O:
"W ell,
i t 's
a big
o rg a n iz a tio n ;
w e
d o n 't
ta lk
t o
e a c h
o th e r."
M a d o ff s ta te d th a t h e th o u g h t O s tro w
w a s p re te n d in g
that he had not been aw are
o f th e o th e r o n g o in g
e x a m in a tio n ,
b u t O stro w
w a s a c tin g " a s if th e le ft h a n d d id n 't k n o w
w hat
th e rig h t
h a n d
w as
d o in g ."
M a d o ff s ta te d th a t h e " re a lly
got annoyed"
w ith O stro w
fo r re p e a te d ly
a s k in g
B L M
t o
g e n e ra te
c o m p u te r
ru n s.
M a d o ff s ta te d th a t d u rin g
th is e x a m , th e y " n e v e r lo o k e d
a t fi-o n tru n n in g ."
H e
s ta te d th a t tw o m o n th s
a fte r th e y le ft, h e re c e iv e d
a le tte r c itin g h im
fo r " tw o rid ic u lo u s
v io la tio n s ,"
w h ic h th e y w e re w ro n g
a b o u t; th e v io la tio n s
th e y c ite d w e re in c o rre c t.
H e
w e n t o n to s ta te th a t w h e n B L M
su b m itted
their response
to th e S E C le tte r a n d c o p ie d it
to F ~ N R A , F IN R A
re s p o n d e d
lik e , " W h a t th e h e c k ?
A re y o u n u ts w ith th is n itp ic k in g ? "
M a d o ff s ta te d , " A fte r tw o m o n th s , th e y fo u n d 2 -3 n itp ic k y th in g s , a n d th e y w e re w ro n g
a b o u t
th o s e
th in g s ."
M a d o ff s ta te d th a t h e d id n o t p ro v id e
fa ls e d o c u m e n ts
to th e O C IE
exam iners,
e x c e p t th e c lie n t s ta te m e n ts .
H e s ta te d th a t h e d id n o t p ro v id e
or m ake false records for
th e
S E C .
H e
a d d e d
th a t
th e y
" n e v e r
a s k e d
for DTC
re c o rd s "
o r o th e r
re c o rd s
th a t n e e d e d
to be
p re p a re d .
M A D O FF
E X H IB IT S -0 2 7 9 3
T h is d o c u m e n t
c o n ta in s
in fo rm a tio n
th a t h a s b e e n
c o lle c te d
in c o n n e c tio n
w ith
a n in v e s tig a tio n
c o n d u c te d
b y th e U .S . S e c u ritie s
and Exchange
C o m m issio n
O ffice
of Inspector
G en eral (O IG ).
It c o n ta in s
c o n fid e n tia l,
p riv ile g e d
a n d s e n s itiv e
in fo rm a tio n
and should
not be recopied
o r d is trib u te d
w ith o u t th e
e x p re s s
c o n s e n t
of the G IG .
H e stated that O strow
and Lam ore "never really
g o t in to b o o k s a n d re c o rd s
a s
re la te d
to s to c k re c o rd s
or DTC
re c o rd s ."
M adoff
s ta te d th a t " th e y n e v e r e v e n lo o k e d
a t
m y stock records"
o r d id a " b o x
c o u n t."
H e said he w as "astonished"
th a t th e y d id n 't
a s k
for DTC
records, and stated
th a t o n ly a re g u la to r
c o u ld g e t th o se re c o rd s fro m
DTC, and
th e S E C w o u ld " h a v e to g o to D T C ." H e a d d e d th a t D T C d o e s n o t h a v e s e p a ra te
a c c o u n ts
for each custom er, but rather, provides
a g lo b a l re p o rt, b u t s ta te d th a t if th e y
w ent
t o
D T C ,
th e y
w o u ld 'v e
s e e n
h is
m a rk e t-m a k in g
p o s itio n ,
a n d
th a t
it " w o u ld 'v e
b e e n
easy for them
to see" the Ponzi schem e.
M a d o ff s ta te d th a t th e S E C c o u ld 'v e
g o n e to c o u n te rp a rtie s ,
a n d if th e y h a d , th e y
" w o u ld 'v e
s e e n it," a d d in g , " th e y
d id n 't
d o a n y o f th a t."
H e stated that "it's
th e o n ly
th in g to d o ," a n d c la rifie d , " If y o u 're
lo o k in g
a t a P o n z i s c h e m e , it's
th e firs t th in g y o u
d o ."
Tw o
y e a rs
p rio r
to 2 0 0 6
exam , O C IE
in q u iry :
M a d o ffre c a lie d
th a t tw o y e a rs b e fo re
O stro w
a n d L a m o re c a m e to e x a m in e
B LM , he received
a phone
call from
Lori Richards, w hich he characterized
a s a n in q u iry
for a hedge
fund sweep.
H e s ta te d th a t w h ile in th e lo b b y o f h is b u ild in g , h is p e rs o n a l
c e ll p h o n e
ra n g :
L R :
" B e m ie ,
i t s
L o ri."
BM :
"H i
L o ri."
L R :
" I n e e d y o u to h e lp m e o u t.
C a n y o u te ll m e a b o u t y o u r h e d g e fu n d s ."
BM :
" I d o n 't
h a v e
a hedge
fu n d ."
L R :
" I
d id n 't
th in k
s o ."
BM :
" I e x e c u te
tra d e s
for hedge
fu n d s."
M a d o ff re c o lle c te d
th e c a ll la s tin g
a b o u t 1 5 m in u te s , a n d s ta te d th a t J o h n M c C a rth y
m ay
have been
o n th e c a ll, b u t c o u ld n o t re m e m b e r
for sure.
H e rem em bered
R ic h a rd s te llin g
h im
th a t h e 'd
p ro b a b ly
get a call from
M c C a rth y
a n d th a t th e y m a y n e e d m o re
in fo rm a tio n
fro m
him .
S h o rtly th e re a fte r,
M adoffreceived
a call from
M c C a rth y , d u rin g
w h ic h
M c C a rth y
to ld h im , " Y o u 'll
get a letter after the first of the year."
M a d o ff s ta te d th a t
w h e n h e g o t th e le tte r, it w a s re a d ily
a p p a re n t to h im
that they w ere focused
o n fro n t
ru n n in g
and thought it w as part of a sw eep
th a t th e S E C w a s d o in g o n fro n t ru n n in g .
H e
re c a lle d
th e le tte r w a s s e e k in g
th e n a m e s o f h e d g e
funds he did business
w ith, a
d e s c rip tio n
of his split-strike
c o n v e rs io n
strategy, copies of "m aybe"
tw o y e a rs o f
s ta te m e n ts
fro m
la rg e h e d g e
funds, and his P& L
trading profit in those securities.
E nforcem ent
In v e s tig a tio n :
M adoff said it was "am azing
to m e " th a t h e d id n 't
g e t c a u g h t d u rin g th e
E nforcem ent
in v e s tig a tio n ,
b e c a u s e
th e y
s p e c ific a lly
asked him , "A re these secunties
a t
D T C ?"
T hey further pressed, "W hat is your account num ber."
H e re p lie d , " 6 4 6 ."
M a d o ff s ta te d th a t it w a s " o b v io u s
th e y th o u g h t th a t s o m e th in g w a s a m is s ."
H e w ent on
M A D O FF
E X H IB IT S -0 2 7 9 4
of 00

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