Frank Casey, one of the key players in exposing Bernie Madoff, spoke about some of the lesser known details of Madoff’s Ponzi scheme at the School of Business on Wednesday.
Initially, Casey wanted to expose Madoff because he was Casey’s competition. Madoff stood directly in the way of managing an account Casey was seriously pursuing.
“When we first started hunting this guy Madoff, it wasn’t because we had some pie in the sky belief of right and wrong,” Casey said.

From the beginning, Madoff operated in secret, but Casey was driven to find out why his competition had been so successful. Casey said he quickly found enough information to realize Madoff’s strategy was illegal. Casey took the information back to his colleague Harry Markopolos, who immediately identified Madoff’s strategy as a Ponzi scheme.
Casey said during the following years, Markopolos filed five reports incriminating Madoff to the Securities and Exchange Commission. Each report contained more evidence against Madoff. One of Markopolos’ reports listed people who could testify something illegal was going on in Madoff’s operation.
The SEC ignored the reports for various reasons. Casey said the main one was the agency is mostly staffed by lawyers who could not understand most of the technical math in the reports. The agency also discredited the reports because Casey and Markopolos were, by definition, disgruntled competitors. The reports achieved nothing.
The SEC eventually started taking Markopolos seriously and contacted him, Casey said. Markopolos sent a report reminding the agency how many times he had previously sent warnings. He had started sending reports in the infancy of the scheme, but by the time the SEC contacted Markopolos, Madoff currently had more than $50 billion.
Casey said when the news officially broke about Madoff’s Ponzi scheme in 2008, no one at the SEC was fired. Some high-ranking officials resigned, but no one was forced to leave their position. Casey told two stories about good friends affected by Madoff — one committed suicide, and the other lost his entire fortune.
When Madoff was caught, Casey was flooded with phone calls. Although Casey’s hunt began with self-interest, Casey has some serious remorse for the victims.
Casey said he gives a lot of credit to Markopolos, who made many professional sacrifices and sacrifices of his time. Casey compared him to an intellectual pit bull terrier, who latches on and does not let go until he’s brought you down. Thought most of the money Madoff took is gone forever, Casey does what he can to help the victims.
“It’s a never-ending battle to try to recoup some of the money for the victims,” Casey said. “I don’t get involved with searching for that money, but I have on occasion, and I am right now engaged by international law firms seeking to sue international banks for their role in the Madoff case.”