Madoff, the Sit-Com

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Madoff, the Sit-Com


Like a classic horror movie, the spectre of Bernard Madoff provokes nervous laughter along with jolts of terror. The New York magazine cover of his face made up as the Joker nicely captures this duality and should win their art director another award to mount next to the one earned last year for Eliot Spitzer as a dick brain.
The language of finance is sufficiently opaque, its foundations resting on a superficial faith, that disaster can easily befall the naive, and that's most of us. The prospectus on the China fund that my broker suggested for my 401K in 2006 has gone unread, and I don't know him well enough to tell if he has my best interests at heart or his firm's. Many of us could be like those Madoff investors who went to bed on Dec. 10 feeling secure about their retirement years only to learn the next morning they had been wiped out.

That's the night sweats part of the story. Then there are the many farcical elements. One of Madoff's chief conduits for funds, Ezra Merkin of GMAC, uses a convicted swindler, Victor Teicher, as an investment advisor; and Teicher warns Merkin that Madoff must be a crook as his results are too good to be true. Madoff's clients believed in him as an all-powerful wizard when, in reality, his midtown Manhattan throne room was a front. Harry Markopolos was Toto who pulled back the curtain. If the SEC had bothered to look beyond the projected illusion of a NASDAC genius, they would have seen an old fraud.

When thinking of the Madoff saga as a fantastic comedy, I imagine him as a one-time character on Seinfeld. The pattern of the scandal, with the majority of those scammed coming from New York City, Long Island, and Florida, mirrors the social network of the series. Jerry's parents are probably not in the right income bracket to be victims. But is there any doubt they would have friends of friends in Boca who "lost a bundle" to Madoff?

It is in the spirit of this greatest of New York sit-coms that the following scenario is offered:

Kramer is returning from a losing day at the track when he bumps into Uncle Leo on the street. As Kramer complains about his negative cash flow, Uncle Leo can't help boasting that his son Jeffrey has his money (and Leo's) with a brilliant investor named Bernard Madoff.

"Nice steady return of 12% for 15 straight years, down markets and up," crows Uncle Leo. If Kramer is interested, he'll mention it to Jeffrey and maybe his son will make an introduction. "Madoff doesn't see just anybody," Leo points out. "You know they call him the 'Wizard of Wall Street.'"

Kramer dismisses the idea. "Thanks, Leo. Not enough action for me on 12%." Later that day, borrowing a jar of anchovies from Jerry's refrigerator, he mentions the encounter to his friends. Flush after some Atlantic City casino gigs, the more cautious Seinfeld thinks this Madoff character might be the right person to handle his new savings. Elaine mentions that her boss, Mr. Peterman, has also been wondering where to put earnings from his successful catalog. George, unfamiliar with large sums of money, is only half-listening.

But a few days later at his job as assistant to the traveling secretary with the New York Yankees, he overhears Derek Jeter and Mike Mussina discussing investment strategies. They can't decide where to park their millions. To dazzle them with his insider connections, George interrupts and declares "I happen to know just the guy who can solve your worries: Bernard Madoff."

They've never heard of him. "You won't get rich," says George, before remembering, "of course, you're already rich. But Madoff promises you a nice steady return of 12% every year, down markets and up." This Wall St. sage is very selective, though, about those he allows into his funds, "Madoff doesn't let just anybody invest with him," says George. "But if you're interested, I'll see what I can do."

Steinbrenner happens to be passing the trio in the halls and overhears the conversation. "Bernie's a good man, best money manager there is, you can't go wrong with Madoff," he yells out before disappearing into his office. Jeter and Mussina are impressed. George suddenly becomes the trusted financial advisor for the entire Yankees roster.

Kramer sees how eager everyone has become to invest with Madoff and thinks he should earn a piece of the action. Since Jeffrey is the conduit, and Kramer first heard of Madoff from Uncle Leo, he declares his right to "a finder's fee" from his friends.

Jerry, Elaine, and George object strenuously, but Kramer is adamant. They never would have heard about Madoff if not for him, he whines. Out of comradeship they surrender to his demands and, although nervous about putting Kramer in charge of anything, they let him be the intermediary to work out the transfer into Madoff's "fund of funds," a phrase that incites a round of jokes ("not just a fund, a fund of funds," "I'm fond of funds, aren't you?" "the most fun I've ever had with a fund, etc.") indicating their level of fiscal acumen.

Uncle Leo tells Kramer that Jeffrey has arranged a meeting but has warned him to pass on the message that "the gates to the fund are closing" for this quarter so the money needs to be wired quickly to Madoff. Kramer is thrilled he will soon be sitting down with "the Wizard of Wall Street."

With account information from Jerry, Elaine, and George scribbled on papers tucked into his suit jacket, Kramer shows up at the Lipstick Building in midtown Manhattan where Madoff has his offices. The rooms are hushed and the two receptionists imperious. Kramer tells them of his appointment. A female flunkie appears and tells him "Mr. Madoff is in Asia and unavailable to see you." She will take down all the information.

Kramer is suspicious and withholds the account papers. He thinks he sees a shadowy figure behind the glass that could be Madoff. But several attempts to move beyond the front desk into the inner sanctum are thwarted by the receptionists.

Growing more frantic and angry, Kramer wonders out loud, "what kind of an operation is this? Where's the trading floor? I want to see some action, baby." The flunkie hands him a card with a number where he should wire all of the money ("if you really have any," she sneers, making a final hapless lunge for his papers) and he is ushered out by security.

He is met on the street by George and Jerry. They are nervous that everything went smoothly. Neglecting to mention the brush-off he has received and the fact that he hasn't invested their money, Kramer pats his coat pocket and holds out the flunkie's card. "Not a problem," he says.

At Newman's apartment, where he is borrowing his friend's computer to read some business stories about Madoff (all of them flattering), Kramer tells him about the money he is investing with the "Wizard of Wall St." Newman opines that 12% is OK "if you're retired. But young men like us and Derek Jeter, young men in their prime, have a right to expect more from their hard-earned capital." Newman has been in email correspondence with a Nigerian Prince who is being cheated out of his inheritance and needs help transferring funds out of the country. The Prince guarantees a return of 150% in 30 days.

"Now you're talking," says Kramer who begins an email exchange with the royal African. But when he calls up Jerry to tell him about this even better investment scheme, his friend is irate. Doesn't Kramer know that's the most famous scam going. "Only idiots send cash to the Nigerian prince," screams Jerry.

Kramer is chastened, tells his friend to calm down, and promises that all the money from Jerry, Elaine, and George has been invested safely with Madoff. When he calls up the number given him by the flunkie, however, he is told crisply "the gates are closed until next quarter." Kramer tells no one.

A week later, Uncle Leo calls Jerry. He has heard from his son that Madoff never received the money. "I'm very disappointed in you, Jerry. Jeffrey did this as a favor. You know Madoff doesn't allow just anybody to invest with him." Jerry curses Kramer and promises to find out what went wrong. He calls George and Elaine in a panic, telling them that Kramer never invested the money with Madoff.

Steinbrenner calls George into his office. Madoff has called to ask about the money that was supposed to be invested for the team. "He said he hadn't heard from you. I told them you would never let me down or do anything to bring shame on the reputation of the New York Yankees."

George tries to explain. "Well, you see, Mr. Steinbrenner, there seems to have been a slip-up. I have this friend Kramer who was supposed to..."

As George is pursued around the perimeter of Yankee Stadium by several players with baseball bats, he runs past a newstand and sees the tabloid headline: "The Wizard of Wall St. Admits to $50 billion Ponzi Scheme."

George signals a halt to the chase and holds up the paper. "Gentleman, lower your weapons. As you can see, far from being at fault here, I was guilty only of protecting your interests. My financial team and I had begun to suspect this so-called Wizard of Wall St. was nothing but a con artist. Others were fooled. We were not. Rest assured your money is secure. We have invested it conservatively in stocks from some of the most respected financial institutions in the world, including Bear Stearns, AIG, Merrill Lynch, Citigroup and..."

In the last shot, Kramer and Newman are seen reading the same tabloid headline, "I told them they'd be better off with the Prince."