Madoff: Billy The Kid In A Savile Row Suit

Psychologists and psychiatrists around the world gathered for drinks and conversation tonight in their local coffee houses as Bernie Madoff boarded the bus to prison. The world will wait for his death bed confession in 2059. Experts on the human mind know that cars may be replaced by transporters and cities may be powered by nuclear fusion by then, but many more Bernie Madoffs will have come and gone as well. A criminal act that produces a long prison sentence will not prevent fraud. The people who have the genius, daring, narcissism, and psychopathology to build a multi-decade system involving billions of dollars are rare and the notion of punishment may mean little, if anything, to them.

The regulatory and judicial systems work on several suppositions that probably do not apply to Bernie Madoff. The first is very simple. Most people believe that if they cheat people that they will be caught. As the number of victims and the amount of money involved increases, it is more likely that perpetrators of the fraudulent behavior will be apprehended. Madoff and Allen Stanford most likely believed that they were too clever to be caught.  And as the evidence showed they were almost right. Every field has its Noble laureates. Financial fraud is no exception. It isn’t bragging if it is fact. Madoff possessed a colossal intelligence. He could have been caught several times when his actions were reported to the SEC. It is easy to say he was lucky. It is harder to admit that he had built a system for  stealing that was superior to almost any other in its field.  Madoff was fortunate to avoid detection over the years but it was not luck.  It was his unusual talent for deceit.

One of Madoff’s other advantages is that he probably did not have a conscience. It may be that he is a sociopath. It seems that he did not care about how badly other people were hurt by his fraud, as long as he had the life that he wanted. Madoff was certainly an extreme example of a sociopath who worked within the financial industry. He was friendly with many of the people that he bilked, in some cases for decades. It did not matter to him that his close friends would die penniless. Madoff was especially fiendish that way. His case belongs in every textbook on perverse personalities. He was the best of his kind, and probably the most highly developed.  He could have chosen to commit more violent crimes, but he would have done so with great care and ingenuity, however without remorse.

One hundred and fifty years in prison would be a deterrent to most people. Madoff almost certainly found it a challenge. He believed he would not be caught, but if he was finally tracked down.  He will be remembered for decades and perhaps centuries as the best of his breed and probably feels that this is worth the decades he may spend in prison between now and the end of his life. He won’t be tortured. He had many years of the finest homes, yachts, planes, and the unusually high regard of his friends and clients. Those things were real. They have been taken away, but Madoff has his memories of them, many and true. He was considered one of his generation’s great financiers. In hindsight, that impression was wrong, but at the time is was as real as any other human experience. He was the best at something until he wasn’t. He was a famous money manager. He is now much more famous for the size and elaborateness of his fraud. He is almost certainly proud of himself. His time in prison will be uncomfortable but it pales in comparison with his fame. Madoff probably wanted to be caught, or knew he would be, but not until he had set the fraud bar so high that it would be hard for the next Madoff to surpass it.

There may not be anyone who can improve on the scale and ingenuity of Madoff’s fraud.  However, it is a recurring theme in human nature that someone in the next decades will try to create another scheme that will be as elaborate and convincing as Madoff’s was.  The system for preventing fraud is not unlike the one set up to curtail drug trafficking. The most intelligent and ruthless people often find a way around the law. They can sometimes dodge the consequences for years. A tiny portion of them are never caught.

It is easy to be daring when fame and fortune are more important than the worst consequences and being remembered for being lawless is much more rewarding than being remembered for being a good citizen. Billy the Kid in a Savile Row suit.

Douglas A. McIntyre