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   >>> on nbc.

   >>> imagine stumbling across the largest financial fraud in u.s. history , but when you try to expose it, no one listened. that's what happened to this man, after he realized bernie madoff's investment operation was actually a $65 billion scam. we'll talk to harry markopolos in a moment. but first, how the house of madoff collapsed.

   >> bernie madoff awaits sentencing for mastermining the largest ponzi scheme in history.

   >> it was the news that rocked the financial world, on december 11th , 2008 , respected financier, bernie madoff was arrested in his new york city penthouse apartment by federal agents after admitting to his sons that he had been running quote, basically a giant pondsi scheme. the losses were staggering. first thought to be $50 billion. they finally totalled $65 billion in real money and imaginary profits.

   >> we are struggling to pay our motor home bill. and to put food on the table. and he took our life away from us.

   >> bernie madoff pleaded guilty and was sentenced to the maximum term, 150 years in federal prison . madoff had operated for years under the radar of regulators. victims asked how could the securities and exchange commission , watchdog for investors, not have known? the awful truth was, they did know. for eight years, one man tried to tell them, boston trader, harry markopolos. but this warning was ignored. and lost in a sea of bureaucracy. harry markopolos is now telling his story in the new book "no one would listen." a true financial thriller. harry , great to have you here, good morning.

   >> good to be here.

   >> i want to start off, i said at the end there, one man tried to warn people. you want people to know right off the bat that you worked as part of the team, there were others working on this as well?

   >> i had a four-man team, we were tracking it for eight years.

   >> you worked for a securities firm in boston. and basically people in the business started to hear about the returns that bernie madoff was getting for his investors. and your bosses said to you, look, harry , reverse-engineer this. we want you to use his system and see if you can dupe i had indicate his results. you worked very hard at it, but you couldn't do it.

   >> it was impossible. it was clear in five minutes that the strategy was bogus as a $3 bill. i had to model it. i couldn't replicate it. and we were losing customers to this man. every money manager around the world was losing money to bernie madoff.

   >> so an alarm goes off in your head and the team you were working with and you go to the s.e.c. , not once, not twice, not three times, but four separate times, starting in 2000 , and either they didn't understand what you were trying to tell them, or the information fell through the cracks.

   >> they didn't understand. they had lawyers there, not finance people. they weren't capable of understanding what i had written and presented to them. i had gift-wrapped this case and delivered it on a silver platter and they still didn't take it.

   >> at one point, harry , didn't they call bernie madoff in for an interview?

   >> they called him in, but he was the only person they never talked to. they never talked to any of his staff if they had, the stories wouldn't have meshed. and they would have solved the case.

   >> given that the s.e.c. is supposed to be the watchdog over these kinds of investments, how long do you think it should have staken them to get this?

   >> half an hour at the most.

   >> and they did nothing for ten years?

   >> nothing for ten years.

   >> parts of this book, harry , read like a manual on investments and government bureaucra bureaucracies. other parts of it read like a real hollywood thriller. at one stage, during your investigation, and you're trying to uncover this ponzi scheme for the world to see, you begin to fear for your life. and i want you to try to explain to our viewers why you started to feel that way.

   >> in june 2002 , i took a key trip to europe with a french nobleman . i was meeting a very high-money crowd, an offshore secret money crowd in the uk, france and switzerland. at that point, when i saw the offshore nature of this money, the money coming in was hidden, untaxed money and i knew there was organized crime connections to this case at that time.

   >> so basically, to connect the dots here, you're thinking, wait a second, if organized crime is involved in this, and they're reaping huge benefits from bernie madoff's scheme, the last thing they're going to want to see is someone blow the whistle on their gravy train .

   >> madoff was victimizing the russian mob , and the drug cartels , he had a lot to fear.

   >> there's something else in this book that astonishes me. i need you to explain this. at some point during this period where you're trying to expose bernie madoff, you said to yourself, first of all, you went out and bought a gun, okay, to protect yourself. but you took it a step further. you said, look, if bernie madoff contacts me directly, or indirectly, and threatens me in any way, i am going to prepare myself to --

   >> kill him. it was the only choice. it was him or me. this man was a human predator. he would have no social conscience about taking me off the face of the earth. it was me or him.

   >> take this the right way, harry . i'm sitting across from you -- you look like an accountant, okay? you don't look like a guy who's going to commit a hit on another human being . how did you get to that stage where you actually thought, i may have to go out and kill bernie madoff and how would you have explained it to law enforcement ?

   >> well i would hope not to get caught. i certainly had good army training. and it really, it really was him or me. i had a family to protect. the government wasn't protecting me. they were not doing their job. and i felt forced into a rather difficult moral dilemma.

   >> you talk about the incompetence or dereliction of duty at the s.e.c. and a lot of people are going to say, okay, that was starting in 2000 , we're now ten years later. what's changed? in your opinion, what has changed? what lessons did they learn from this?

   >> it rocked the s.e.c. to its foundations. they're turning this agency around. it was nonfunctional. they're trying to become dysfunctional. it's crawl, walk, run. it's going to take them years to get to the run stage.

   >> so right now, if there are other people committing ponzi schemes , in this country, do you think they are at a greater risk of being caught? or are they also going to operate under the radar for a long time?

   >> the s.e.c. is really attuned to ponzi schemes , they're bringing more and more of those to justice. whereas before they ignored them. now they're aggressive in pursuing them. so i feel very good about some of the positive benefits of this case. but there are very few.

   >> there are so many people who watched this whole story unfold. and a lot of those people have one major question right now, and that is -- could bernie madoff have done this alone. or even with just one or two other people. i would like you to shed some light on that.

   >> he had a global conspiracy . he's operating in 40 nationings. he has 339 companies feeding him new victims. he's passing along over 90% of the fees to the people helping feed victims into this scheme. he had a lot of help. he had the big banks helping hill. he had custody banks helping him.

   >> helping him in a criminal way or just turning a blind eye ?

   >> turning a blind eye . the accounting firms were turning a blind eye . all the companies setting up victims. no one asked the right questions.

   >> everybody talks about the incompetence at the s.e.c. but what about the investors? especially the hedge funds that were funneling money into bernie madoff, who were supposed to be doing their due diligence on behalf of their investors. and did nothing. was it incompetence on their part? or sheer greed ?

   >> it was sheer greed . they assumed that madoff was front-running an illegal activity. so they didn't want to ask questions that they didn't want to hear the answers to. so they turned a blind eye , never did any due diligence checks.

   >> i think even an average investor will find your book fascinating. what is the take-away for that person? the typical investor, what lessons should they learn from this?

   >> don't trust your government. do your own research. use common sense, if you don't understand the strategy, don't invest in it.

   >> harry markopolos, "no one

   would listen: a true financial thriller." thank you very much.

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