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Madoff Private Eye Has the Action -- Now All He Needs Are the Lights and the Camera

"Dirty Harry" Markopolos may soon be telling his story on the big screen.
"Dirty Harry" Markopolos may soon be telling his story on the big screen. (By Jay Mallin -- Bloomberg News)

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By Dana Milbank
Thursday, February 5, 2009

Harry Markopolos, the derivatives whiz and private investigator who uncovered the Bernie Madoff scandal, came straight from central casting: geeky, with too-big glasses and a prominent comb-over. When he spoke, it was in the vocabulary of a man who had watched a lot of detective movies.

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"My Army Special Operations background trained me to build intelligence networks, collect reports from field operatives," Markopolos told a House subcommittee yesterday. He delivered findings "to the SEC without signing my name." He "made copies such that my fingerprints were never on that package. I handled it only with gloves." He offered to wear "a disguise, as I was trained to in the Army," and do undercover work for the Securities and Exchange Commission "and have no one know where I was, except my wife, and I would have no contact with my family during this time."

Why the cloak and dagger? Some of Madoff's money "came from the Russian mob and the Latin American drug cartels," Markopolos explained. "If he would have known my name and he knew that we had a team tracking him, I didn't think I was long for this world."

"How were you compensated?" asked Rep. Gary Ackerman (D-N.Y.).

"There was no compensation," Markopolos answered. "We did it for the flag, the flag of the United States of America."

Thus did Harry Markopolos of Boston establish himself as a next-generation Dirty Harry -- a derivatives industry vigilante, part Lt. Columbo, part Adrian Monk, with a dash of "Dragnet" and "Lethal Weapon" sprinkled throughout his testimony.

Markopolos's demeanor could make it easy to dismiss him as an eccentric, and the SEC apparently did, paying him no attention as he presented evidence to them for years of Madoff's Ponzi scheme. But Markopolos was right, and now he's telling his story -- yesterday, to Congress, and soon, you can bet, at a theater near you.

Markopolos recounted how he figured out Madoff was a fraud ("It took me about five minutes") and how he proved it ("I did about four hours of modeling").

The lawmakers were impressed. "I would like to just say for the record that I see you as a modern-day Greek hero," said Rep. Jackie Speier (D-Calif.).

Markopolos had a knack for blunt and colorful language befitting an action hero. He recommended that the SEC hire industry veterans who "have gray hair or no hair." He looked up at the panel's chairman, Paul Kanjorski (D-Pa.), who is gray and mostly bald. "You'd be perfect," Markopolos said.

He used detective-movie phrases, such as "There is no light and only darkness." Wall Street, he said, has a "code of silence," and Madoff now is held "under penthouse arrest."

The sleuth's choicest words were reserved for the SEC, which he assaulted with a vengeance once directed at Madoff. "I gift-wrapped and delivered the largest Ponzi scheme in history to them, and somehow they couldn't be bothered," he complained.


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