Tonight, PBS Frontline will air “The Madoff Affair”, an investigative news piece, which promises to get behind the world’s first global Ponzi scheme. While Madoff sits in jail awaiting sentence in June, the media is still trying to figure out how the fraudster perpetuated the scheme for decades.

This morning I listened to an interview with Martin Smith, veteran correspondent for PBS Frontline on the WOR News Talk Radio 710 with John Gambling. Smith tells Gambling he’s not sure how Madoff fell into the Ponzi scheme—whether it was by design or by accident. But he is sure that Madoff was “skirting the law and playing fast and loose with the SEC quite a ways back.”

Central to the program is an exclusive interview with Michael Bienes, an early feeder for Madoff, starting in 1968. Madoff hired Bienes and another accountant to help recruit clients. According to PBS Frontline, in those early years, the 70s, they were raking in investors, even by word of mouth. Bienes tells viewers he didn’t work hard for the money; it was very easy. Even Bienes pointed out to Madoff that what they were doing wasillegal. Finally Bienes gets busted in 1992 and he and his partner are shut down. Yet Madoff escapes detection.
You can find a clip of the interview with Bienes on the PBS Frontline site.

Frontline gets behind the mystique of the man. Bienes describes Madoff as being intimidating. He wore French cuffs, and he had the aura of an
actor, according to Smith on WOR.

Fast forward to the present, and WOR’s Gambling asks what is the status of any dollars invested with Madoff and if there is being distributed? Irving Picard’s office, the court appointed trustee of Madoff’s assets, is going after Stanley Chais, a Los Angeles money manager who ran Brighton Co., to recover funds, as one example. Individuals who invested directly with Madoff are entitled to up to $500,000 from SIPC, but if investors went through hedge funds,the trustee is going to look into whether they can go after that money as well.

One of the hedge fund managers, Sandre Manzke,a hedge fund pioner and founder of Tremont Capital, which lost $3 billion with Madoff, appears on camera. According to Smith, Manzke was among the banks and individuals taken in by the too-good-to-be true returns. According to Smith, Manzke, referring to Madoff's investment methods, said: “It was a black box, and you couldn’t really get information out of it and you put up with it." As for how sophisticated fund-of-funds were duped, Smith said firms that were earning 24 percent returns in certain years from Madoff, didn't want to get in the way of all that money. "The guy had everybody fooled,” Manzke told Smith. Manzke is now president of Maxam Capital Management LLC, another feeder fund to Madoff which lost $280 million. I wonder if this program mentions the word “Greed.” Stay tuned!