Madoff's fall: Topless waitresses to prison pizza

updated 5:02 p.m. ET Oct. 21, 2009

NEW YORK - Fallen financier Bernard Madoff has plunged from his Manhattan penthouse to the lower bunk of a cell he shares with a drug offender at a federal prison, where he eats pizza cooked by a child molester and hangs around with a mob boss and a convicted spy, according to legal papers filed Tuesday.

The snapshot of Madoff's prison life — and a contrasting picture of a former high-flying life laced with cocaine and salacious parties — are in a legal complaint filed by Burlingame, California-based lawyer Joseph Cotchett, who represents about a dozen victims of Madoff's massive investment Ponzi scheme. Cotchett interviewed Madoff in July at the Butner Federal Correctional Complex near Raleigh, North Carolina.

The lawyer found the mastermind of one of history's largest financial frauds now reduced to nighttime walks around a prison track for fun, according to the new filing. It builds on one investor's existing civil case against various Madoff associates and financial institutions; the suit claims they were complicit in Madoff's fraud or should have stopped it. Madoff has consistently said he acted alone.

When not rubbing elbows with drug and sex offenders, Madoff spends time with Carmine Persico, a reputed Colombo crime family boss, and Jonathan Pollard, an American convicted of selling military secrets to Israel more than two decades ago, according to the lawsuit.

Madoff's lawyer, Ira Sorkin, declined to discuss his client's prison life or the lawsuit's allegations about shenanigans in his former office. Telephones for spokespeople for the Federal Bureau of Prisons rang unanswered Tuesday night; the agency's records do show Pollard and Persico are housed at Butner.

Deluxe former life
The lawsuit goes to length to compare Madoff's prison existence with his deluxe former life, including photos of his yacht and homes and claims that he ran an office rife with drug use and sexual escapades.

According to the allegations — their source isn't specified — Madoff deployed an employee to get drugs from 1975 to 2003, fueling an office so cocaine-laden insiders dubbed it "the North Pole." Office parties featured topless waitresses, employee affairs were common and Madoff kept a list of his favorite pretty masseuses in his personal phone book, the lawsuit said, claiming investors' money helped pay for it all.

"Employees described it as a wild, fast-talking, drug-using office culture," said the complaint. It says its various allegations are based in part on interviews with other unnamed people besides Madoff.

Madoff, 71, is serving a 150-year sentence after pleading guilty in March to a scheme that authorities say cost thousands of investors at least $13 billion.

The lawsuit doesn't detail his talk with Cotchett. The lawyer previously said the one-time Nasdaq market chairman repeatedly apologized for the harm he caused victims.

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