Clearly, he understood phone calls are best. People who meticulously avoid email should not be trusted, because it is simply too calculating, as if they know they are regularly committing crimes. A phone conversation can always be disavowed, you just say you were talking about last weekend's bar mitzvah.
Obviously, first of all, this conversation never took place.
Madoff's strategy was to keep the underling in the dark, a classic spy novel tactic, because then neither creates a liability for the other:
"The less you know about how we execute," he tells the chief risk officer of one of his feeder funds, "the better you are."
Confidence and reputation can answer most anything:
"You [...] say, listen, Madoff has been in business for 45 years, you know, he executes, you know, a huge percentage of the industry's orders [...] We make the assumption that he's -- he's doing everything properly... You don't want them to think you're concerned about anything. You're best off, you just be casual."
Madoff dismissed an SEC investigation as a fishing expedition, which it probably was--see if they get any bites, if not, move on. He reminded the risk manager that SEC personnel were young guys looking to get jobs at hedge funds as compliance officers, making them eager to accept anything they said.
When asked by the Congressmen whether there was any record of the TARP deals negotiations, Hank Paulson explained he never uses email, neither privately nor professionally. He only makes phone-calls. Does this remind you of Bernie Madoff somehow?
1. Great blog. The transcripts are interesting, but the voice would be better. Few people seem to understand how con criminals control the conversation.
2. Can you change the colors on this blog? Black background with lime green highlights? Please stop, so that we can read and digest the posts, which are of high quality.
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