When the cuffs snapped shut on financial wizard Bernard L. Madoff on December 11, 2008, the trust and invested savings of undetermined thousands utterly vanished. Sixty-five billion dollars — more than the gross national product of Tanzania — had been entrusted to the man who had employed history’s greatest Ponzi scheme.

From major funds and financial houses, down through individual investors, ripples of loss fanned across the globe. It had all been paper profit. All feeding old investors promises with the deposits of new. All a fraudulent fiction.

Today Madoff spends his days within the walls of the Butner, North Carolina, federal correctional complex, filling out his century-and-a-half sentence for fraud. He communicates to few on the outside, one person being Diana Henriques, senior financial reporter for the New York Times, with whom he still regularly swaps E-mails.

Henriques, a white-collar-crime investigative journalist at the Times who has three Pulitzer Prize nominations to her credit, has been following Madoff since before his indictment. She was the first reporter to gain an interview with him after his arrest. Her definitive biography, “The Wizard of Lies — Bernie Madoff and the Death of Trust,” has been optioned by HBO for a movie project, perhaps with Robert De Niro as lead.

To present members the inside story on Madoff, the Princeton Regional Chamber of Commerce has invited Henriques to speak at its monthly luncheon. She will present “Beyond Bernie Madoff — Fallout From History’s Biggest Fraud” on Thursday, January 5, at 11:30 a.m. at the Princeton Marriott Hotel and Conference Center. Cost: $65. Visit www.princetonchamber.org.

Ever since her Junior Achievement assignment as “Teen Page” reporter for her Roanoke, Virginia, hometown paper, Henriques felt the call of journalism.

Her mother, a psychiatric nurse, and her father, a former Army Air Corps pilot-turned entrepreneur, both provided strong encouragement. Attending George Washington University, she reported for the campus paper until her graduation in 1969. “Just imagine being a young reporter, in the nation’s capital, covering the first march on the Pentagon and the death of Martin Luther King,” says Henriques, recalling her initiation.

Henriques’ Princeton Chamber talk is in many ways a homecoming. Following graduation, Henriques plunged into Garden State politics, covering state and local government for the Trenton Times until 1986. She researched her first book, “The Machinery of Greed: Public Authority Abuse and What to Do About It,” in 1982 while a senior fellow at Princeton University.

After three years as a staff writer for Barron’s Magazine she joined the New York Times in 1989, covering business governance, regulatory issues, and white-collar crime. She recently took a buyout from the Times but is continuing to work there as a contributing writer.

Winner of countless awards, Henriques was most gratified by her 2004-’05 Pulitzer-finalist series in which she exposed financial exploitation of young U.S. soldiers by insurance and investment firms. As a result of her articles, more than 7,000 military families have received compensation.

Her other books include “Fidelity’s World: The Secret Life and Public Power of the Mutual Fund Giant” and “The White Sharks of Wall Street: Thomas Mellon Evans and the Original Corporate Raiders.”

For Henriques, Bernie Madoff was more than the greatest fraud story ever told. “When I learned that it was Bernie’s own son Mark who initially reported his father to the FBI, and later committed suicide, I realized that here was a tragedy of Shakespearean proportions,” she says.

Who? Bernie Madoff, more than any of his exhaustively hyped character traits, was a brilliant financier and investment trailblazer. Arriving on Wall Street in the 1960s, he soon found a way to lure penny stock investors into over-the-counter trades by offering legal rebates to retail houses. This tree-shaking of market protocols “earned Bernie many enemies early on,” says Henriques.

Madoff was a pioneer in installing electronic trading platforms — matching buys and sells with no human intervention — a mastery that led to his becoming chairman of the burgeoning NASDAQ exchange.

Further, with Madoff investment brokerages in London and New York, Madoff became a true global investment visionary. He was one of the primary developers of the after-hours trading market. “When the New York exchange closed, Madoff opened and began trading the stocks around the world,” says Henriques. “As a reporter, I found this extremely valuable.”

Seeking to get a handle on oil stock fluctuations immediately after the launch of the Gulf War, she called Madoff’s trading desk and found the prices around the world, which helped her make the correct call on the market moves the morning after.

As an individual, Madoff was, as Henriques puts it, “an absolute antithesis of the Ponzi fraudster. He was quiet, reserved, never pushy. He seemed more impressed by you than you were with him.” This personality, as much as anything, totally disarmed federal and exchange regulators with whom Madoff became so cozy throughout his career. Further, while shying away from one-on-one consultations, he exuded a sense of calm and confidence that gave his words authority and inspired a natural trust.

“If I had to use my armchair psychology,” says Henriques, “I would say that Madoff was a man caught between a dreadful fear of failure and living a lie.” As a child, young Bernie lived through his father Ralph’s disastrous financial career.

Leaving a job with Everlast, Ralph launched his own sporting goods firm that quickly cratered, then followed it with a second, whose $90,000 debt and bankruptcy brought a lien against the family house. In his third venture, Gibraltar Securities, the elder Madoff became a finder, linking up startups with funders. This too crashed when the firm failed to file an annual report. If it came between facing this kind of failure and living a lie, the latter might well seem preferable.

“Even when I talked with him in prison,” says Henriques, “Bernie continued the denial, insisting that it would have all kept working, that he was just getting tired of the whole thing.”

How? In 1920 Italian immigrant Charles Ponzi began luring investors from Maine to New Jersey with promises of 50 percent returns on their money within 45 days. While his actual investments could not possibly fulfill these promised returns, everything kept floating along swimmingly as long as Ponzi had a steady stream of depositors literally stuffing money into his pants pockets. But by the time it hit the big Boston markets, Ponzi’s scheme ran for less than a year before the crash and his arrest.

Madoff had learned from history. First, he had an excellent, legitimate cover. Madoff Investments kept making reputable trades both in New York and London, while Bernie and cronies on the 17th floor of mid-Manhattan’s Lipstick building ran an entirely separate operation, tucked neatly inside. Second, instead of promising returns too wildly grand to be true, Madoff proffered consistent returns, a few points above the market.

“He kept coming in only a point or two above, sometimes even below market standard,” says Henriques. “But he offered consistency.” The returns were always there. And for a conservative fund or non-profit this proved very attractive.

But beyond the stats, it was the man himself who convinced even the most cautious investors to trust his methods. His scrupulously managed image was the ideal lubricant. Everyone seemed drawn in. Clients ranged from major mutual funds, such as Fairlield Greenwich Advisors and Ascott Partners, to foreign institutions, such as Bank Medici and Banco Santander, universities and individuals, such as Fred Wilpon, owner of the New York Mets.

When? “It’s difficult to say exactly when Madoff ceased to invest the funds and turned to the Ponzi method of repayment,” says Henriques. Some claim it began as early as the 1970s, but Henriques’ analysis places it in the mid ’80s.

Much of Madoff’s proposed formula of investing was simultaneously matched by the legitimately operating Gateway Fund. Madoff’s fund began deviating wildly in its return around 1986. “After that, the fact that he was cheating people becomes obvious,” she says.

Where? “Why don’t you ask him where the money is?” people kept pestering Henriques when she was about to interview Madoff in prison. “I never did, of course,” she says. “This man is the prince of liars. He certainly is not going to tell me, a reporter, where his stash lies.”

Henriques also is convinced that neither Blackbeard nor Madoff ever stored up any vast treasure in the Caribbean. Some original investors did indeed receive the promised returns. Client Jeffry Picower netted more than $7 billion that since his death has been turned over to the settlement fund for other investors.

Some wealth lay in the Madoff family possessions, including wife Ruth’s 10.5-carat engagement ring and a pair of Madoff’s bedroom slippers that Sotheby’s auctioned for several thousand dollars.

But the real wealth, most investigators feel, got distributed from new clients to old. An endless source of juggled cash kept streaming out, to keep the scheme alive and flowing. That’s the trouble with fictional profits.

The moral. Three years later, Henriques does see a glimmer of hope. The romantic image of the con man has been totally shattered. That vagabond Robin Hood fraudster that Paul Newman and Robert Redford celebrated so exquisitely in the 1973 movie “The Sting” has taken a chilling dose of reality. No one is romanticizing Madoff. Both media and public opinion have wrapped him in every possible cloak of villainy. No one aspires to his game.

Further, it certainly may be argued that the tangible symbol of Madoff gave form and shape to the culture of corporate corruption that has infected many of our financial institutions of late. Today thousands individuals sustain the effort to occupy Wall Street and other financial capitals in hopes of developing a corrective dialogue between the 99 percent and the 1 percent. Perhaps Madoff is the price we had to pay for that dialogue.

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