New York – Did the Madoff Sons Know?

New York – Friends of Mark and Andy Madoff tell Vanity Fair writer David Margolick that Andrew has called what his father did to him and his brother “a father-son betrayal of biblical proportions,” and has said that to categorize it as being blindsided would amount to the understatement of the century. But others, including Madoff alumni, don’t believe the boys could have been unaware of the scheme.

Margolick talks with their friends, surrogates, and former colleagues, and reveals that when Bernie Madoff broke the news of his Ponzi scheme to his sons, in the kitchen of his penthouse apartment, Mark was angry and Andrew was on the floor, sobbing. The spokesman for the sons tells Margolick that the fact that no one has come forward to implicate the two for involvement in the scheme is powerful proof that they weren’t involved.

Deborah, who worked for 24 years at the company and asked that her last name not be used, tells Margolick that “they wouldn’t have been able to do what Bernie did: they just didn’t have the evilness in them.” But she admits that other Madoff alumni don’t concur. “If I were to say that Mark and Andy are innocent, I’d get people looking at me like I’m absolutely nuts.”

Margolick reports that Mark is said to be obsessed with the scandal, huddled over his computer, hyper-scrutinizing every story and blog posting, and, when it suits him, answering e-mail instantaneously, but that Andrew has completely shut down. The day his father confessed to him, he skipped the office party, went home, and lay down on his bed—still in his overcoat and shoes—and stayed there for the next four hours, perfectly inert.

Andrew’s friend Alexandra Lebenthal, head of Lebenthal & Co., who has visited him on a few occasions since the scandal broke, tells Margolick that “he discusses him—‘casually’ is not the right word—unemotionally, devoid of feeling, which I take to be a way of protecting himself from this monster. I do think he’s still in some form of shock. He’s gotta be.” When Margolick asks if it is at all possible that the outrage Andrew has expressed is all an act, Lebenthal replies: “Yes, of course. We may never know or find out.”

Lebenthal also says that Andrew’s mood has brightened a bit over time. “After Bernie went to jail, that was meaningful for him in terms of getting to the next level.” She says that his principle concern is his daughters—to make them feel loved and convince them that, as she put it, “just because their grandfather turns out to be one of the worst criminals ever doesn’t mean they’re bad people.”

Margolick reports that their children have to cope with hate calls to the their house, and when Andrew’s estranged wife orders groceries, she uses her maiden name. According to friends, parents of classmates of Andrew’s daughters at the Manhattan private school they attend—apparently fearful of assassins crouching in vestibules—worry about letting their children attend parties at the Madoff home.

The sons’ spokesman tells Margolick they have not spoken to their father since his confession to them, on December 10, or to their mother, not because they think she was involved—they don’t—but because they believe her tendency to side with him, no matter what, when they complained to her about him, enabled his dirty deeds. Margolick reports that when Bernie Madoff was carted off to jail in March, Andrew told friends that he couldn’t find it in his heart to pity him. Neither son has visited their father; the closest they’ve come to him is when each was on jury duty a hundred yards away from his cell.

Although some of Mark Madoff’s friends and their families lost fortunes in the scandal, they have not cut ties with him, Margolick reports. Mets owner Fred Wilpon lost hundreds of millions, but the Madoff spokesman tells Margolick that his son, Jeff Wilpon, who runs the Mets, maintains his longtime ties with Mark (though, according to a Wilpon-family friend, he has tired of Mark’s excessive self-pity.) New York developer Edward Blumenfeld, who also lost a fortune, invited Mark to his Passover Seder in April.

Margolick reports on the note Bernie wrote to his sons, and the contents of one of the packages they received after he’d revealed the scheme. The note read: “Dear Mark+ Andy, If you can bear to keep these watches, they are given with my love. If not, give them to someone who might. Love, Dad.” Included in the package, a Hanukkah gift, was a vintage Paul Newman Rolex Daytona, a Piaget, and a Cartier Tank watch.

According to Margolick, Bernie’s relationship with his sons was complex. Eleanor Squillari, who worked as Bernie’s private secretary for 20 years, says that Bernie would “just light up when he saw them” and refer to them as “dear” or “sweetheart,” but a trader who worked with them says that the elder Madoff “could beat them down, he was vicious.” He says that on one level Madoff considered his sons soft, because while he had made it on his own, his boys had been given everything. “Mark and Andy had never gone against him. They were always trying to please him, and never could,” the trader tells Margolick.

One of the sons’ confidants tells Margolick that Bernie did not bring his sons into the scheme for the same reason he never let them stay in his home: he thought they’d somehow screw things up. “Emotionally there was no intimacy,” the friend says, “The kids visited them, but it was like visiting their grandmother. Andrew saw this huge gulf between him and his dad, and saw his father as being patronizing and even somewhat antagonistic.” (“Completely false,” says the sons’ spokesman about Bernie’s alleged lack of hospitality.)

The July issue of Vanity Fair hits newsstands in New York and Los Angeles on June 3 and nationally June 9.