The Wizard of Lies is HBO’s newest documentary which takes a look at Bernie Madoff and the biggest financial fraud scheme in recorded history. The film starts Robert De Niro as Bernie Madoff and Michelle Pfeiffer as his wife. The powerful documentary takes a look at the impact of a $65 billion dollar ponzi scheme on not just all of the victims who invested, but also on Madoff’s friends, family, and loved ones.
The following definition from Investopedia describes exactly what a ponzi scheme is:
“A Ponzi scheme is an investment fraud where clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all of their energy into attracting new clients to make investments. This new income is used to pay original investors their returns, marked as a profit from a legitimate transaction. Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors. When this flow runs out, the scheme falls apart.”
Something I found interesting during this film is exactly how long this had been going on. Madoff started his company in 1960, and although he admitted to not having traded since 1996, many people believe the fraud may have been going on all the way back to the early 1980s or late 1970s. It took all the way until 2008, when one of worst stock market crashes in the country’s history happened, for the scheme to finally be exposed due to investors demands to withdraw money when there wasn’t enough money coming in to satisfy these demands.
One of my biggest takeaways from this documentary can be summed up by a quote by one of Madoff’s sons when being questions by the FBI. When the FBI asks him how he didn’t know about his father’s crime, he angrily responds “How did I not know?! You’re the FBI. How the fuck did you not know?!” This is in fact a very valid question. As evil as the entire scheme was, the government’s incompetence to conduct multiple botched investigations and ignore obvious evidence and warnings signs over a decades long stretch may have been just as bad. The SEC conducted multiple investigations over the years into Madoff’s company and failed to find anything.
Financial analyst Harry Markopolos pointed out in 1999 that it was impossible for Madoff’s company to generate the returns it was claiming. He said it took him five minutes to the conclude the numbers didn’t add up. Instead, he was repeatedly ignored by the SEC offices in both Boston and New York for ten years until the scheme finally unraveled. Madoff himself admitted that he was essentially banking on the incompetence of the government to keep his scheme alive, which really says all you need to know about the leaders of our country.
The truly tragic part of this documentary, aside from all of the victims who lost their life savings, was the impact on Madoff’s family who trusted Bernie and had no knowledge of any wrongdoing. The family had to endure the wrath of the public eye simply because of their associations with Bernie Madoff. Things got so bad that one of Madoff’s sons committed suicide just two years after the scandal became public. In the film, Ruth Madoff tells Bernie how she has no skills, no friends, that she needs him because she would have nothing else without him. It is truly tragic that those with the Madoff family name will forever unfairly be associated with the unthinkable crimes that Bernie Madoff committed.
The last thing I found interesting about this documentary was at the very end when he was being interviewed in jail. He mentions to the interviewer that he was upset because he came across an article comparing him to serial killer Ted Bundy. He says there is no comparison because he never killed anyone like Bundy did. Then the film ends as he asks the woman interviewing him “Do you think I am a sociopath?” The camera slowly zooms in on his face before fading out to credits with no response from the interviewer. I think this is a powerful scene and a great ending because it really does make you think: Is the crime Madoff committed actually as bad as what a serial killer has done? Sure, Madoff didn’t kill anyone directly, but he ruined thousands upon thousands of lives and left a lifetime’s worth of damage behind him. For that reason, you can make the case that he is one of the most evil men to ever live.
Thanks to everyone for reading this blog. Please let me know what your thoughts and comments are in the comments down below.