One More Trick Up His Sleeve?

Did Bernie Madoff swindle the feds as well as his high-flying fund investors?

That's the headline in the latest New York Post. According to a prison informant serving time with Madoff in federal prison, the Ponzi scheme mastermind claims to have sequestered $9 billion prior to his arrest. The unnamed inmate said Madoff bragged openly that he funneled the money to three friends — and that his former partner, Frank DiPascali, knows the identities of the three secret billionaires. The source claims Madoff suspects DiPascali (who pleaded guilty last year to helping Madoff fleece his investors) is using that information to cut a deal with the feds.

Could Madoff have managed to hide such a large sum of money from the army of auditors and investigators who've pored over his records? Or was he just trying to earn some cred and boost his rep? John Carney, a senior editor at CNBC.com, thinks it's entirely plausible. "Remember," he adds, "Madoff all but turned himself in. That means he had plenty of time to stash away assets overseas. I'd be shocked if he did not do this."

The prison informant added Madoff became acutely depressed and believed his wife would "take up with another man" after a book revealed his long string of extramarital affairs. And to treat his condition, the inmate claims, Madoff sought therapy from the prison psychiatrist.

What's more, the informant claims that the injuries Madoff suffered in prison last year — commonly attributed at the time to a prison beatdown — actually arose from Madoff's own adverse reactions to a prescribed antidepressant. The mystery gabber contradicted tales from another inmate serving time with Madoff that insisted anyone who physically harmed the scam artist in prison would face violent retribution. Well, that would be a shame if it wasn't true that an unrepentant Madoff said "fuck my victims".