A History of Family Secrets, Madoff-Style
How did Bernie Madoff fool his kin? Ask Genghis Khan and Jesse James.
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HOW WOULD IT HAVE BEEN POSSIBLE FOR Bernie Madoff's wife, and sons and nieces and colleagues and senior employees, not to know that he was running a $50 billion Ponzi scheme for so many years, as he reportedly has admitted doing? This question has been broached many times recently, as the media casts reckless aspersions on anyone unlucky enough to be related to or in the employ of the apparent scoundrel.
As usual, the mean and biased media is being unfair.
A look at history shows some famous figures, including a couple who would make a Ponzi scammer look like Mother Theresa, went about their business without disclosing what that business was to those closest to them. No, their loved ones or confidantes weren't stupid, gullible or willfully ignorant. The stratagems worked because these guys were so clever that no one could have hacked through their tapestries of deception.
CONSIDER GENGHIS KHAN. "He always said he was a precision-tools salesman," is how Ogadai Khan explained his ignorance of the atrocities inflicted on civilizations stretching from southern China to western Hungary by his father. Indeed, not until the Great Khan died in 1227 did his children learn that he had killed more people and put more cities to the sword and did more pillaging than anyone who had ever lived. (He also found time for what passed for romance among his crew; some geneticists believe that at least one half of one percent of all males now living carry a gene passed down by this very potent warrior.)
"He was always on the road, and when he came home he would just go on and on about how much it cost to stable his yak or rent a yurt for the night in Samarkand," continued Ogadai, his successor. "We just naturally assumed that he was in retail."
A similar situation was apparent in the post-Civil War American West, where Jesse James kept his family in the dark about the real source of his income.
"Jesse always told people he was an impresario," is how Robert Ford, who shot the notorious bank robber and murderer in the back of the head, would later recall. "He would tell his wife that he was out on the road booking banjo smackdowns in Deadwood and Dodge City, which gave him an excuse for being away from home so much and for always turning up with suitcases full of cash. Also, he never used the name Jesse James around them. His family thought his name was Snuffy McGillicuddy."
OR CONSIDER A MORE MODERN CASE, involving not a criminal, but rather a respected general: Erwin Rommel, commander of the Panzer divisions that wreaked havoc in North Africa in the early 1940s. Not wishing to let his family know the danger to which he was exposed in battling the Allies, he "deliberately filled the den with stuffed giraffes and photos of King Tut, so we all assumed that he spent so much time in North Africa because he really liked it down there," recalls his trusted accountant, Fritz Adelhoffer, now 98.
"He also said the desert air was good for his sinuses. Not until I got an angry letter from a dry cleaner in El Alamein asking when 'Mister Desert Fox' was going to pick up the 20 leather jackets he left behind in 1943 did I begin to suspect that he might be the head of the Afrika Korps. Gott im Himmel! I always thought he was in import-export."
Perhaps the most famous example of a renowned individual who succeeded in keeping his kin and friends in the dark was Attila the Hun. After his death in the year 453, all 356 of the wives of this unreconstructed enemy of mankind said that they had no idea whatsoever that they had been living with the Scourge of God.
"When we would ask him why he was always disappearing into the steppes with 150,000 horsemen armed to the teeth, he would tell us that he belonged to a re-enactors' club and they were going off to the Urals to simulate the Siege of Troy," explained his favorite wife, Barbetta, a former Thracian courtesan. "The truth is, those guys drank so much we were happy to see them go. It was the only way you could get any peace around here."
THE KEY QUESTION IS WHETHER THOSE closest to Attila, Genghis Khan, Erwin Rommel and Jesse James deliberately looked the other way and pretended not to see the obvious.
"Let's put it this way," said Kublai Khan, who was only an infant when his grandfather Genghis breathed his last. "When Gramps would come back to Ulan Bator with a couple of dozen decapitated heads impaled on spears, I think some in the family started to suspect he might not be your average traveling salesman. But Genghis would always say, 'I won those skulls in a craps game. You got a problem with that?' That shut them up in a hurry."
Perhaps the most amazing story involves Charles Ponzi, who, after serving five years in prison for his original postal-reply coupon scam, set up another scheme involving overvalued Florida real estate. It was unwittingly bankrolled by his third wife, a Florida woman who forked over her life's savings. "I thought it was a different Charles Ponzi," she later lamented. "He led me to believe he worked for the SEC."