Meanwhile, Wilpon began to see Madoff more often socially. Madoff carried himself with an unassuming bearing, more kindly patrician than Wall Street hustler. He wore dark, crisp suits and owned more than 250 pairs of expensive designer shoes made in Italy, France, Belgium and England. It was the perfect look to engender trust. "He was extremely successful, but he was very low-key and never pushed anything," Wilpon says. "He never said, 'Give me more of your money.' Never. He apparently, in retrospect, used that persona as a marketing tool, to attract people. Because that did attract people."
Like Madoff himself, the returns his investments produced didn't call attention to themselves. They were steady, not spectacular. Madoff told his clients he had developed a proprietary system of exquisitely timed puts and calls—a way to bet on the movements of security prices—that did away with wild swings.
The Madoff system provided a steady return of 10% to 12% to the Sterling partners. That consistency is at the heart of Picard's suit. In his complaint, the trustee argued that the Sterling partners "should have known Madoff's fund was too good to be true because it consistently yielded positive gains coupled with ultra low volatility."
Asked about the too-good-too-be-true theory, Wilpon says, "Not by [Madoff's] formula, if you believed his formula of what he did with puts and calls. Markets going this way and markets going that way didn't affect the basket of stocks he was allegedly buying.
"We had no feeling that that was unusual. There were times when his returns were a little higher and times they were a little lower. I think generally he used to say he would double [the return on] Treasuries."
In 1992, Wilpon says, he was sitting in the office of Ike Sorkin, an attorney for two Florida accountants who worked with Madoff. Wilpon watched Sorkin write a $400 million check to settle a lawsuit by the SEC charging the accountants with selling unregistered securities. The SEC determined that the investors' money was accounted for, blamed the accountants and did not accuse Madoff of wrongdoing. "The SEC said he's absolutely clean as a whistle," Wilpon says. "They admonished the guys down there in Florida. Nothing with Bernie."
Though Madoff was not much of a baseball fan, he became a well-known figure around the Mets' offices. He held season tickets near Wilpon's box seats at Shea, traveled to Japan with the club in 2000, was a guest of Wilpon's in his suite for two playoff games and owned a satin Mets warmup jacket with his name sewn on the back—a jacket that fetched $14,500 in November 2009 when U.S. marshals auctioned off his belongings. Mostly, he was known around the Mets' offices as Bernie, the man with the highly reliable investment vehicle, albeit one for heavy investors.
"I heard his name on a regular basis, met him once or twice on Opening Days, Subway Series parties," says Steve Phillips, the Mets' general manager from 1997 to 2003. "Not once did my ears perk up or the hair on my neck. Fred would talk about Bernie's résumé, as a chairman of the [NASDAQ] stock exchange. Not one time did I get the sense that something was a little shady. That would go counter to everything the way Fred does business."
Phillips says Wilpon once suggested Madoff's fund to him "once you get some money saved up," but, as Phillips says, "I never got it." Another former team employee says he also was given an opening to join Madoff but lacked the $100,000 minimum investment.
"They would say, 'This is what they averaged over the past 10 to 12 years,' " the employee says. "I said to my wife, 'It sounds great.' I laugh about it now. But back then, here's Fred Wilpon, a tremendously wealthy and successful businessman. If he vetted it, I felt comfortable with it. I feel bad for him. I do think Fred is a genuinely good guy."