Find Post Investigations On:
Facebook Scribd Twitter
Friendfeed RSS Google Reader
» About This Blog | Meet the Investigative Team | Subscribe
Ongoing Investigation

Top Secret America

The Post explores the top secret world the government created in response to the attacks of Sept. 11.

Ongoing Investigation

The Hidden Life of Guns

How guns move through American society, from store counter to crime scene.

Have a Tip?

Talk to Us

If you have solid tips, news or documents on potential ethical violations or abuses of power, we want to know. Send us your suggestions.
• E-mail Us


Post Investigations
In-depth investigative news
and multimedia from The Washington Post.
• Special Reports
• The Blog

Reporters' Notebook
An insider's guide to investigative news: reporters offer insights on their stories.

The Daily Read
A daily look at investigative news of note across the Web.

Top Picks
A weekly review of the best
in-depth and investigative reports from across the nation.

Hot Documents
Court filings, letters, audits and other documents of interest.

D.C. Region
Post coverage of investigative news in Maryland, Virginia and the District.

Washington Watchdogs
A periodic look into official government investigations.

Help! What Is RSS?
Find out how to follow Post Investigations in your favorite RSS reader.

Hot Comments

Unfortunately I believe that we are limited in what we can focus on. I think that if we proceed with the partisan sideshow of prosecuting Bush admin. officials, healthcare will get lost in the brouhaha.
— Posted by denamom, Obama's Quandary...

Recent Posts
Bob Woodward

The Washington Post's permanent investigative unit was set up in 1982 under Bob Woodward.

See what you missed, find what you're looking for.
Blog Archive »
Investigations Archive »

Have a Tip?
Send us information on ethics violations or abuses of power.
E-Mail Us »

Notable investigative projects from other news outlets.
On the Web »
Top Picks »

Trying to Blow The Whistle on Madoff

POSTED: 01:56 PM ET, 01/13/2009 by Derek Kravitz

Bernard Madoff

Long before the name Bernard Madoff became synonomous with the biggest Ponzi scheme in American history, two people -- a reporter and an accountant -- had caught some red flags in Madoff's numbers.

New York accountant Harry Markopolos spent the better of a decade combing through Madoff's books in an unsuccessful attempt to get the Securities and Exchange Commission to examine the hedge fund's finances.

The bookish and media-shy Markopolos started looking at Madoff in 2000 after his boss at an investment firm asked the accountant to figure out how Madoff made his money. Markopolos couldn't and, even after he left the company, continued to feed info to a contact at the SEC, including a 2005 memo entitled, "The World's Largest Hedge Fund Is a Fraud."

"Why would people think I feel good about this?" Markopolos told the Boston Globe. "People think I'm a hero, but I didn't stop him. He stopped himself."

But Markopolos wasn't the only one wondering aloud about Madoff's secretive investing.

In 2001, Barron's Erin E. Arvedlund wrote a somewhat skeptical look at Madoff's operation, calling on financial advisers who questioned how Madoff could routinely produce double-digit returns year after year with no down spells.

"When Barron's asked Madoff how he accomplishes this, he says, 'It's a proprietary strategy. I can't go into it in great detail.' Nor were the firms that market Madoff's funds forthcoming."

One of the most interesting and prescient aspects of Arvedlund's examination into Madoff was her interview with an unnamed investment manager who advised his clients to pull their money out of Madoff's hedge fund after he "couldn't explain how they were up or down in a particular month."

In an article for Conde Nast Portfolio, Arvedlund said she interviewed some 100 people about Madoff. Very few had ever met the man and he remained steeped in mystery, although the rumors about how he made his money abounded.

"Over the ensuing years, fund-of-funds managers I spoke to repeated the rumors about Madoff," she wrote. "He remained a hot commodity in the hedge fund world, but no one had successfully been able to disprove his claims." (Arvedlund's NPR interview)

By Derek Kravitz |  January 13, 2009; 1:56 PM ET Madoff Scandal
Previous: Push for Bailout Bucks, Gitmo Closure Considered, Clinton's Donor Interventions? | Next: How a U.S. Attorney Went After 'Crazy Libs'


Please email us to report offensive comments.

Post a Comment

We encourage users to analyze, comment on and even challenge's articles, blogs, reviews and multimedia features.

User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions.

characters remaining


© 2010 The Washington Post Company