Netflix’s documentary ‘Madoff: The Monster of Wall Street’ is out and it reveals how Bernard “Bernie” Madoff, created and ran one the largest scams of the century, a $64 billion-dollar Ponzi scheme, which he ran for over 20 years. LatinTRENDS will reveal in this article, the Latino behind the Bernie Madoff Ponzi scheme.
Eventually getting caught and sentenced in 2009 to 150 years in prison. Madoff always claimed he operated the scam alone, right up to his death in 2021, he was 82.
The documentary takes a deep dive into Madoff, his operation, his financial psychopathic tendencies, his family, his closet allies’ and employees.
Madoff, did not operate alone. He was in fact aided by a tight knit group of employees, one of them a Latino from New Jersey.
George Perez, the Latino behind the Madoff operation:
Although the then-renowned financier, always maintained that he operated alone in the Ponzi scheme, the truth is there were several others who either directly or indirectly enabled this operation by forging fake documents and receipts and manipulation software.
Amongst them were none other than Computer Programmers George Perez, who along with Jerome O’Hara, ran the computer system of the multi-billion dollar boiler room Ponzi scheme.
George Perez was part of the two man team of computer programmers whose code was used to automate the creation of millions of fake documents as the fraud expanded rapidly and globally in the 1990s.
“Without the help of O’Hara and Perez, the Madoff fraud would not have been possible,” George S. Canellos, director of the Securities and Exchange Commission’s New York Regional Office, said in a statement.
The secrets of the 17th Floor:
The system created by the two coders was known as “the House 17 system”, named after the infamous 17th floor, where Madoff and his team distributed financial mayhem. “House 17 system” was good enough that it fooled Madoff’s clients for years and upon fine tuning it further, even fooled the Securities and Exchange Commission (SEC).
Rich Diedrich, was an IBM expert programmer, hired by the FBI to decode the complex and outdated codes that Perez and O’Hara created in the house 17 system. Rich discovered, Madoff’s programmers spent a lot of time preparing the House 17 operation to pass SEC audits.
“For the audit, they needed to have counter-trade trades. You needed to have who you were buying from, who you were selling to and the blocks you were buying and selling,” he explains.
They never conducted any trades so, they had to essentially create all the documentation for the trades. They had a program that would go out and essentially take a trade and then split it into sub-trades, and then it would go through and generate all the reports of all the trading tickets. They would print them all out.”
Madoff did not only fool the SEC this way, he also fooled other banks that invested into his Ponzi scheme. Perez and O’Hara used the same code for all audits, they just changed the names of trading partners depending on who was doing the audit.
The Madoff programmers, Perez and O’Hara, were tasked with keeping track of all these changes and keeping everything straight, or at least appear that way.
Fabricating transaction IDs was a big challenge for the programmers, but they eventually they overcame this challenge, Diedrich explains, they came up with a creative method that was never spotted by auditors.
“One trick they used was they took the hundredth and the tenth digits from the transaction number, moved it over one spot, and subtracted it from the transaction number to get an earlier transaction number,” Diedrich says. “That was one of the techniques they used to make up transaction numbers.”
The tragic ending of the Madoff family:
The Madoff’s tragic ending serves as a clear reminder that crime doesn’t pay and if it initially does pay, it most likely will come back and collect. Some call this Karma.
Sometime after Madoffs arrest and conviction, his wife Ruth said during a TV interview that she did not miss her imprisoned husband, adding that “the villain of all this is behind bars.” In a separate interview that aired on CBS’ “60 Minutes,” she also confessed to attempting suicide on Christmas Eve in 2008.
“I don’t know whose idea it was but we decided to kill ourselves because it was so horrendous,” she said, referring to her husband. “I said I just can’t go on anymore.”
Ruth was forced to surrender her fortune when her husband was convicted. She moved to Connecticut and has since vanished from the public eye. Their eldest son, Mark, 46, committed suicide. He had worked at his father’s trading desk on the 19th floor, where Madoff ran his legal trading business.
His last known contact with Madoff was in 2008, ABC reported. He did not leave a note but reportedly contacted his wife, who was in Florida with their daughter at the time, urging her to check on their youngest child, who was home at the time of his death by suicide.
Mark died on the anniversary of his father’s arrest two years prior. His younger brother, Andrew, died from lymphoma in 2014. He was 48.
Like his mother, Andrew was never charged in his father’s scheme and denied knowing what his father had been doing for decades. Andrew dies of cancer in 2014.
At the time of his death, Andrew was the subject of a lawsuit by a court-appointed trustee working to recover funds for investors. The lawsuit alleged that both Andrew and Mark knew more about their father’s Ponzi scheme than they claimed.
In early 2022 Bernie Madoff’s sister, Sondra Wiener, and her husband were found dead in their home in Boynton Beach, Fla., in what the authorities said was an apparent murder-suicide.
The Palm Beach County Sheriff’s Office said deputies responded to a 911 call and found Ms. Wiener, 87, and her husband, Marvin, 90, both dead from gunshot wounds.
Bernard “Bernie” Madoff died in prison on April 14, 2021 of chronic kidney disease, he was 82
Even Chase had to pay up:
Federal prosecutors said Chase should have known they were being used to commit fraud, and in 2014 they charged the bank with two felony counts for failing to maintain proper controls.
Than in a deferred prosecution agreement, the feds said they would drop the charges if, within two years, the bank adopted a proper compliance system and paid $2.6 billion in fines and penalties.
Perez, was the fourth of five former employees to be sentenced following their convictions on all counts, including securities fraud and conspiracy in the first criminal trial over Madoff’s Ponzi scheme.
Perez said upon his release that he was “sad and tired,” adding: “I’m terribly sorry for the role my work played.”
Perez was convicted in 2014 and sentenced to 2 1/2 years. Lawyers for one group of victims called the sentence “outrageous.” The judge “understood that their role in the fraud was quite narrow,” Perez’s lawyer said.
At trial, Perez lawyer blamed the fraudulent code on the programmers’ former boss, Liz Weintraub, who died 10 months before Madoff’s arrest. Perez was released for good behavior after serving 20 months in prison. Fifteen people have been convicted in connection with Madoff’s fraud.
Where is George Perez today?
Since being released on good behavior following 20 months in prison on October 26, 2016. The now 56-year-old is a free man, seemingly leading a quiet and family-oriented life well away from the limelight in an attempt to move on with his life and away from the past.
Not much else regarding his recent personal or professional experiences is known at the moment.