MW: Your customers were given consistent, good returns for years. No one realized it was a Ponzi scheme until the financial crisis and clients demanded their money back. How can investors detect fraud like that?

B.M.: If it sounds too good to be true, it is. One of the things that allowed me to go on as long as I did is that I had a lot of credibility. I had 11% and 12% returns, which were not that unusual at that time. So no one questioned me, and I was able to continue.

Read the full interview over at MarketWatch.

Ruth Madoff tells Morley Safer that after her husband confessed to running a massive Ponzi scheme the couple attended the company Christmas party.

Ruth: He called from the office and said, “I’m coming home with the boys, I have something to talk about.” Came in, we went into a room, four of us, and he said, “I have a confession to make. I’ve been running a Ponzi scheme.” He said, “$50 billion dollars.”

Andrew: He said– “Everything I’ve been doing is all a big lie.” He said– he said, “The business is– is a Ponzi scheme, and it– the firm is completely insolvent. And I’m broke.” And then he just started sobbing. And I was– I– I was shocked. I– it was– I felt like my head exploded. I mean, I– I don’t think if he had told me he was an alien I could’ve been more surprised. He said that the firm had liabilities of $50 billion dollars. It never occurred to me that his business had anything like that under management. It was– it was shocking.

And when the quotes below make it out across the web, and especially to the ones who were burned by Madoff, they might just tighten screws a bit for him in prison – making things a little bit less nice and sweet. It’s really amazing how smug this man is after running the biggest Ponzi scheme ever:

“As you can imagine, I am quite the celebrity, and am treated like a Mafia don,” Madoff wrote from the North Carolina prison where he is incarcerated.

“They call me either Uncle Bernie or Mr. Madoff. I can’t walk anywhere without someone shouting their greetings and encouragement, to keep my spirit up.

“It’s really quite sweet, how concerned everyone is about my well being, including the staff … It’s much safer here than walking the streets of New York.” (Yahoo News)

A while back Madoff tried to make people feel sorry for him. He said he was like the human pinata of Wall Street. He said that he was taking the fall for everyone else when they were all complicit in his Ponzi scheme. I feel so bad for him right now I might go buy one of those limited edition Bernard Madoff iPad covers.

With risk and danger apparent, Markopolos and his loyal team relentlessly continued to pursue the frightening truth. Finding himself trapped in a web of epic deceit, the once unassuming Boston securities analyst turned vigilante investigator now feared for his life and the safety of his family, as he discovered no one would listen.

“Chasing Madoff” hits theaters on August 26th.

Yes, this is for real. A designer has made iPad covers fashioned from Bernie Madoff’s pants and sweaters. And I guess people are actually buying these things, with one ‘high-powered’ Wall Street attorney buying up all the cashmere iPad covers to give out as Christmas gifts – or maybe April Fools jokes – hopefully. How much do they cost, only $350 green backs.

Frederickjames.com, a website that sells eco-friendly customized iPad covers, has created a limited edition Bernard Madoff Collection that is now on sale. The 31 iPad covers have been re-fashioned from the convicted felon’s pants bought at the Madoff U.S. Marshals auction held in New York last November.

Frederick James founder John Vaccaro was drawn to create the new iPad cover website shortly after the purchase of his own iPad. He wanted a cashmere sweater cover and decided to attend the Madoff auction to check out the sweaters being auctioned off there and ended up buying all of them. “Those 5 cashmere iPad covers were bought by a high-powered Wall Street attorney who gave them out as Christmas gifts,” says Vaccaro.

Vaccaro says, “There are a lot of collectors out there who would like to own a quirky piece of history, even the worst kind. I would have been first in line to own a piece from the Dillinger or Bonnie & Clyde era.” Proceeds from the auction went to help the Madoff victims. Madoff is an incarcerated felon and the mastermind of what has been described as the largest Ponzi scheme in U.S. history.

Vaccaro bought all 16 pairs of Madoff’s pants, ranging from Polo Ralph Lauren to Banana Republic to Murphy & Nye sailing pants and hired a designer to have them made into iPad covers.

Here’s a potential conversation an owner of said Bernie Madoff iPad cover might have at a nearby Starbucks or coffee shop of some kind:

Jane: “Oh, where did you get that iPad cover? It looks nice.”

Richard: “Bernie Madoff’s pants!”

Jane: “AHHHHHH, good one.”

Richard: “No, really, it’s actually made from Bernie Madoff’s pants. See where the button pocket is, that would be where his butt would be in the pants when he wore them. Yeah, Madoff’s actual butt.”

Jane: “And you actually paid for this thing.”

What’s good about all of this: the money does go to charity. Oh yeah, the limited edition part, what, does the designer actually intend to make more of these iPad covers from Madoff’s prison pants. Of course their limited edition. Perhaps this is all a joke.

The NY Times has the story.

Having served two years of his 150-year sentence, Bernard L. Madoff remains upset that Judge Denny Chin did not give him a shorter term, which might have allowed him the chance someday to regain his freedom, even as a very old man.

“Maybe the judge felt, ‘Well, he’s 70 years old, so even if I give him 20 years, he’s going to be 90 years old,’ ” Mr. Madoff said by phone from the federal prison in Butner, N.C.

“But quite frankly, there’s a big difference with dying in prison, you know, and dying outside with your family.”

Judge Chin has said in recent interviews that he considered a sentence that might have allowed Mr. Madoff to be freed when he is in his 90s. But he concluded that Mr. Madoff simply did not deserve it, and in court called his conduct “extraordinarily evil.”

But Bernie Madoff goes one step further, saying he wasn’t the one who caused the financial collapse, and the judge in the case had little understanding of the financial markets:

“In my mind, Chin was anything but fair, with zero understanding of the industry,” Mr. Madoff added.

He said the judge had made him “the human piñata of Wall Street,” while financial firms and government officials “walk away free.”

“Remember,” he said, “they caused the recession, not me.”

I think the judge knew enough about the financial markets to not get duped by Bernie Madoff. He gave him a stiff sentence, so he knows something. I wonder what some of the Madoff investors have to say about Madoff having to die in prison? I’m guessing they don’t have much sympathy for the man.

Bernie then tries to say the nobody from the government or financial firms are in prison, and they had a role in the financial collapse. There’s a difference though, most of those people didn’t knowingly dupe or deceive investors. Sure, some people might say companies like Goldman Sachs knowingly tricked investors, but Bernie Madoff’s certainly not the one who gets to dole out the punishments. I wonder if he’s going to start naming names though. JPM Morgan is said to be a knowing participant in many ways in the Madoff ponzi scheme.

Still, if you keep hitting Madoff, like a pinata, will money fall out or is it all gone. I’m guessing that’s what Madoff investors really want to know. Show me some money.