LAWSUIT: Madoff Had Prebust Cocaine Parties; ‘Spends Time’ In Prison With Mafia Crime Boss, Convicted Spy; Eats Pizza Cooked By Child Molester; Cell Mate Is Convicted Drug Dealer

Bernard Madoff

Bernard Madoff

Bernard Madoff has made friends in prison and “spends time” with Carmine Persico, a reputed former Colombo crime family boss, and Jonathan Pollard, convicted of spying for Israel in a case that strained America’s relationship with Israel in the 1980s.

Madoff’s cell mate is a convicted drug dealer, and Madoff eats pizza cooked by a convicted child molester, according to a lawsuit filed yesterday.

The complaint was filed by California attorney Joseph Cotchett. Cochett sued on behalf of clients, and interviewed Madoff July 28 at the Butner Federal Correctional Complex in North Carolina.

Jay Wexler is the lead plaintiff. Madoff family members and friends are named defendants in the 264-page complaint, along with firms such as JPMorgan Chase & Co., Bank of New York Mellon,  KPMG, the accounting firm, and other companies.

Cotchett said the interview lasted more than four hours. Some of the details in the lawsuit paint a picture of reckless and nonfinancial criminal behavior inside Madoff’s securities business, in what appears to be a bid to point out that key business partners of Madoff ignored red flags and continued to do business with the now-infamous Ponzi swindler.

Madoff had a “dark side,” Cotchett said.

“Starting in 1975, Madoff began sending a long-time employee and office messenger to obtain drugs for himself and the company who worked with another individual who became a supplier to BMIS,” the lawsuit claims.

“These two men were described as street tough men from Harlem ‘who were not to be messed with.’ Their job was to get drugs and bring them to the office for use at BMIS. The employees in the office were well known and everyone knew, including some special investors,” the lawsuit continued.

“Drug use in the office was described as rampant and likened the office to the ‘North Pole’ in reference to the cocaine use. Eventually the main employee supplier was fired for his drug abuse when cocaine and other undisclosed drugs were found in his desk in 2003. Madoff worried that it might bring in drug prosecutors who might uncover the big scam,” the lawsuit claimed.

Wild parties were held at the office, the lawsuit claimed. Entertainment featured “topless entertainers wearing only ‘G-string’ underwear serving as waitresses, and a culture of sexual deviance existed in the office,” the lawsuit claimed. “The employees had late night affairs in exciting places — such as their boss’ sofa ‘with whomever they could find.’ Employees described it as a wild, fast-talking, drug-using office culture.”

Key insiders knew the end was near in 2008, despite Madoff’s insistence that he acted alone in the fraud, Cotchett contended in the lawsuit.

A panic among some insiders ensued prior to Madoff telling the FBI that the enterprise was a colossal fraud in December 2008, Cotchett said.

“In the final months of 2008, several of Madoff’s closest friends, family and supporters allegedly learned about the dire situation at BMIS and became afraid for their own fortunes and began formulating a plan for withdrawing their own monies from BMIS at the expense of other investors,” the lawsuit claimed.

Read the Joseph Cotchett lawsuit against Bernard Madoff.

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