Former Madoff Employees Can’t Find Jobs


madoffExactly one year ago, Bernard L. Madoff’s two sons turned him in for running the biggest Ponzi scheme ever. Now they are trying to move on. But that is a nightmare for most people with the word “Madoff” on their résumé.Out of work since federal agents arrested their father, Andrew and Mark Madoff have been wrestling with what to do next, according to people who have spoken with them or other Madoff family members.

Mark Madoff, who worked at Bernard L. Madoff Investment Securities LLC for more than 20 years, climbing up the ladder to director of proprietary trading, recently met with at least two Wall Street contacts to get their opinions on whether he could find another job in finance, people familiar with the discussions say. He talked about working on a trading desk or in trading technology, asking one person to keep him in mind if he hears of any openings.

“He’s untouchable in any firm that deals with the public,” says someone who talked to Mr. Madoff. He was near tears while describing his feelings about his father, the person added, asking why anyone would bring his son to work at a crooked investment firm. Another person approached by the 45-year-old Mr. Madoff was told by his lawyer not to respond.

Meanwhile, Andrew Madoff, director of trading when the New York securities firm collapsed, has considered starting a firm involved in disaster recovery, according to someone who has talked to some of his relatives.

A similar struggle grips dozens of other Madoff employees who are frequently confronted with the notoriety, shame and anger now synonymous with a firm that seemed to hum along quietly and profitably until the colossal fraud fell apart. Even workers with no suspected connection to the Ponzi scheme say their careers there have come back to haunt them, with no end in sight.

“I’ll never get a job in finance, and I’m one of the lucky ones,” says Eleanor Squillari, Bernard Madoff’s assistant for many years. She went to beauty school this summer and plans to look for work at a hair salon while selling her handmade jewelry.

Ms. Squillari, 59, lives in a two-bedroom apartment in the New York City borough of Staten Island, near the house she had to sell earlier this year. It makes her angry that former co-workers linked to the fraud still have their big houses and expensive cars. (Ms. Squillari co-wrote an account of her time at the Madoff firm for Vanity Fair magazine, for which she was paid about $50,000.)

Elaine Solomon, the former assistant to Peter Madoff, the brother of Bernard Madoff who was chief compliance officer at the firm, says she has tried to get other jobs. No one will hire her. “I need someone who doesn’t care about Madoff,” she says.

Ms. Solomon is trying to recover more than $200,000 that she invested in the Ponzi scheme for her mother. But she has found that Madoff employees who lost money in the fraud have to take extra steps before they can get paid, she says. A spokesman for the trustee handling investor claims, Irving Picard, said employee claims have been evaluated using criteria that include the person’s position at the firm and how well they knew Bernard Madoff and his family.

About 30 of the roughly 200 employees at the firm went to Surge Trading Inc., a New York company that bought the assets of Mr. Madoff’s trading business. The operation was the heart of the company until the early 2000s and relatively independent from the fraudulent asset-management unit.

Surge has moved into part of the firm’s headquarters in Midtown Manhattan’s Lipstick Building, one floor above where U.S. investigators have been slogging through their probe. Among the firm’s challenges, according to a person familiar with the company, is persuading clients to do business with people previously employed by Mr. Madoff’s firm.

Most of the signs showing that the Madoff firm was ever on the floor are gone.

Mr. Madoff’s family members and former employees still are peppered with questions about who knew of the fraud or should have known. It is a constant reminder of the many questions left unanswered by Mr. Madoff’s 150-year prison sentence in June.

The two Madoff sons haven’t been charged with any wrongdoing by federal prosecutors. Mr. Picard, the court-appointed trustee, has sued to recover at least $198.7 million that he claims four Madoff family members received in compensation and falsified transactions.

“We strongly disagree with the trustee’s baseless claims,” Martin Flumenbaum, a lawyer for Andrew and Mark Madoff, said in a statement. “Mark and Andrew Madoff had no prior knowledge of Bernard Madoff’s crimes and contacted the U.S. Department of Justice and the SEC immediately after their father told them he had defrauded his investment-advisory clients. By immediately turning him in, the brothers saved the victims of the fraud more than $170 million that their father was about to distribute.”

Both sons bought houses in recent years with money loaned to them by their father. Those loans were inherited by the U.S. attorney’s office and must be repaid starting next year. Mark and Andrew Madoff expect to give up some of their assets, a person close to them says.

Shana Madoff Swanson, a former compliance lawyer at the firm, recently had a baby, according to people who know her, and Peter Madoff has told one associate that he is “forcibly retired.”

Bernard Madoff’s wife Ruth has been staying with relatives or friends since the couple’s penthouse apartment was forfeited to help cover investor losses. The two sons haven’t been in touch with her, people who have spoken with them say.

{Wall Street Journal/ Newscenter}