Narco Wars, Bernie Madoff, & More | In Their Own Words MEGA Episode | National Geographic

JAVIER: They call him the inventor of narco-terrorism. He had the audacity to drop leaflets at the car bomb sites. We prefer a tomb in Colombia than a jail cell in the United States. I've killed all those innocent people cause Colombia, I am at war with you. He was taking credit. No doubt about it. My initial reaction was, "How do we attack this?" I mean, you're looking at the biggest narco-trafficker in the world. But we never realized that violence that he had behind him. The brutality, the barbaric side of him is something I will never understand. STEVE: You're out on helicopters flying around, going on mountain patrols, patrolling the valleys. You're just trying to follow up on any leads you could. I've been a cop since 1975. That's the closest I've ever come to burnout, personally. REPORTER (over TV): Workers in Colombia are cleaning up damage from four powerful bombs, apparently, planted in response to this week's government crackdown. Police are warning many influential Colombians that the cocaine kingpins have marked them for death. JAVIER: The search became a war because of all the police officers that Pablo killed. It got personal. STEVE: Maintaining your professionalism, you're thinking, "If I encounter Pablo Escobar, I've got no problem pulling the trigger on this guy." (theme music plays). JAVIER: I started my DEA career in Austin, Texas. I was doing a lot of undercover work. On the ground, man. On the ground. And I was dealing with the street aspect of the distribution. MAN: I got him. JAVIER: To me, four ounces of coke, you know, a couple ounces of meth we were busting on the streets was great. Like, wow. You know, I had never experienced this. After four years, when I get to Colombia, I'm assigned the Medellin Cartel investigation. I was in for a big awakening. COLIN (over TV): High in the Andes Mountains of Southwest Colombia, the Indians have, for centuries, grown and cultivated these small, privet-like trees. Their produce is so sought after that people lose their fortunes, and sometimes their lives, in pursuit of its beguiling properties. SIDNEY: A monkey will bar press for a cocaine reward and continue to bar press for thousands and thousands of times, even though it's dying of hunger and there's food in the cage. It will prefer cocaine to food that'll keep it alive. It will prefer cocaine to a receptive female. water in the cage even though it's dying of thirst. JAVIER: We formed an informal task force in Colombia at that time. My first partner was Gary Sheridan. Gary and I used to just visit Medellin. We would not stay there. We'd go there may be on a weekly basis. And I always remember when they would pick us up at the airport, it'd be about three or four cars. And I remember all the cops used to put their guns on their thighs, and I would like say, "Hey." They'd always tell Gary, "You all got guns?" He says, "Yeah." "You know, get them out." Like, I wasn't used to this. So, we'd drive around with three or four cars, and everybody was armed to the teeth. In 1988, to manufacture a kilo of cocaine was about $1,000. And the cartel had about 15 to 20 humongous cocaine laboratories in the jungles of Colombia. GARY: This is lab number two. There's a chemical site and refining plant. JAVIER: These labs were little towns. They were operated by 60, 80 people. They had schedules. There were the precurse of chemicals, the potassium for manganate, acidic hydride, anything that's needed to make cocaine. GARY: What you got, Javier? JAVIER: This 55-gallon container is hydrogen peroxide. Cocaine. So, it's about three to $4,000 to transport it to the United States. So, your initial investment on one kilo of cocaine was about $5,000. Once that kilo hit the market in Miami, it was going anywhere from 50 to $70,000. If you'd take it to New York, anywhere from 70 to 90. And if you'd take it to Europe, it was over 100,000. All of this cocaine was being controlled by Pablo Escobar. So, we started asking, "Who is this guy Pablo Escobar Gaviria?" REPORTER (over TV): Every multinational has a board of directors. These three men are the world's top cocaine executives. The Medellin Cartel. Jorge Luis Ochoa is the cartel's number two man. Jose Rodriguez Gacha, who's 40, is the third man on the drug totem. The chairman of the board is Pablo Escobar, who at 39 is reputed to be the world's 14th richest person. Escobar's office in Medellin is known as the bunker for fairly obvious reasons. The high walls and armed guards are designed to keep out the enemy. Escobar's ranch is a monument to his illegal trade. The plane over the gate is the first he used to transport illegal drugs. STEVE: So, Pablo goes into this neighborhood where people were literally living on the edge of a trash dump. He builds low-cost housing and lets people live there for free. He provides them with food. He builds medical clinics, soccer fields. He gives them money. So, think about it, if you come from a situation like that and, all of a sudden, your mom's got a roof over her head, you got running water, you've got electricity, what are you gonna think about the guy? He wasn't a Robin Hood for these people. He manipulated those people, because when he needed new sicarios, where did he go back to? JAVIER: I think what drove Pablo was he did not wanna get extradited to the United States. And, remember, there was no extradition with Colombia at this point. So we were saying, "Guys, you know, we got to bring back extradition. We got to go after this guy, Pablo Escobar". STEVE: I think part of it is folklore. They surmise that, in the United States, a prison cell is a real prison cell, which it is. REPORTER: This is something that the drug bosses fear tremendously, extradition. Will it work? Can it happen? BRIAN: It can happen. It's happened before. Extradition was canceled after Colombian drug bosses attacked the Supreme Court in Colombia, killing most of the Supreme Court Justices. BRIAN: Since that time, there has been no extradition of the Colombians to this country. JAVIER: The president at this time who's name, Virgilio Barco Vargas. Great president. His term is running out. The presidential candidate is a person by the name of Luis Carlos Galan. One of his platforms was, "I'm bringing back extradition." Likable. Colombians loved him. They worshipped him. I call him the John F. Kennedy of Colombia. JAVIER: August 1989, it was right outside Bogota. Galan is campaigning. And he's up on stage. Escobar has him assassinated in front of hundreds of people. I always remember. It was on a Friday night. We're at a bar. And I remember the waitress comes in crying and running, "Colombia has just declared martial law. Everybody needs to get out of here." That same night the President of Colombia, Barco Vargas, calls the US Embassy. He says, "I am bypassing Congress. I have just authorized extradition on my own decree." And we're like, "What did you do?" He said, "Under my administrative authority, I want to start extraditing everybody as soon as we can." VIC (over TV): They came by the thousands, lining the streets of Bogota as a last salute to the man they hoped would one day be their president. For many Colombians, 46-year-old Luis Carlos Galan was the answer to several years of terror and violence spawned by the nation's drug traffickers. Most inspired by Galan's anti-drug crusade were many of Colombia's young people, like 20-year-old Eduardo Garcia. EDUARDO (over TV): He wanted to give us a country without drugs. A country without corruption. He wanted to give us, he wanted to give us Colombia. BUSH: In Colombia alone, cocaine killers have gunned down a leading statesman, murdered almost 200 judges, and seven members of their supreme court. The besieged governments of the drug-producing countries are fighting back. Our message to the drug cartels is this, the rules have changed. JAVIER: DEA stepped up to the plate, and our intel people send us down tons of analysts. We started creating arrest search packages. We extradite all those people in front of the world. This infuriated Pablo Escobar. I tell people that the term narco-terrorism was coined by Pablo Escobar. JAVIER: We had never seen car bombs. We started seeing ten, 15 car bombs on a daily basis. We saw the emergence of bounties on police officers. For every uniformed police officer that they kill, the sicario would make $100. I remember we caught one of them, admitted to about ten killings. And I remember this kid was like 16 years old. He says, "You know what? We don't expect to live beyond 22. If I kill five, I make $500. When I get my money, I give most of it to my mother. As long as I have a little to buy some beer, and some blue jeans, a nice pair of tennis shoes, I'm happy". GARRICK (over TV): It may have been a bomb that blew up a plane in Colombia today, the Boeing 727 of Avianca Airlines had just taken off from Bogota on a domestic flight. 107 people were on board, including one American. There were no survivors. JAVIER: Pablo's plan was to weaken Colombia. "I'm gonna kill as many people as I can that way I will negotiate." That's what he always wanted, to negotiate his surrender. What happened at this point, Escobar said, "I'll stop all my killings, all my assassinations, my kidnappings, under two conditions, that you stop extraditing people, and that I surrender at my own prison and I take my prison guards with me. I'll take my assassins. That way they protect me." And, sadly, the government of Colombia agreed. BRYANT (over TV): What kind of guarantees, Mr. President, have you that he won't just continue to run his drug operation from inside that area of his confinement, which we should note is it amounts to, essentially, uh, a three-room suite. CESAR (over TV): Well, we'll take every step that's necessary just to get him out of business. We will take all the decisions. We will monitor his communications. We will monitor his visits. And we are sure he will be out of business. JAVIER: When he self-surrendered, we all felt we had lost. All the innocent people getting killed, the police officers getting killed, minister of justice, presidential candidates, all for nothing. STEVE: I got to Bogota in June of 1991. Javier had already been there for three years. I'd been in the country three days when Pablo self-surrendered to the government. I always like to think that he heard Steve Murphy was in town, so he better give up. I just spent four years in Miami. That was very eye-opening. We did one deal where my partner was shot, and an informant was killed. So, you've already been involved in some pretty strenuous, exciting activities. But to go to Colombia, you know, you have that feeling that you're sticking your head in a lion's mouth now. You've jumped out of the frying pan into the fire. STEVE: My first year there, was when Escobar was in prison. STEVE: So, I was working with Javier and, and another partner, Gary Sheridan, at the time. These guys were very patient with me, giving me an opportunity to work on my Spanish, to learn more about the organization, who's responsible for what. Luckily for me Javier was an outstanding teacher. STEVE: Probably involved alcohol. Yeah. Yeah. JAVIER: A lot of alcohol. We had the TKO program. Targeted Campaign Organizational leaders. We were writing ten to 15 actionable teletypes on a daily basis, and all related to the Medellin Cartel. Distributors in the States. Money launderers in the States. And that was the whole concept of dismantling the Medellin Cartel. STEVE: You're working hand in hand daily with Colombian National Police. You'd all pile into the Huey helicopters, and they'd fly you off and they'd drop you off on top of a mountain, and you spend all day out on patrol looking for anything associated with Escobar, or labs, or whatever you could find. You were going out meeting informants in different locations. The Colombian National Police would call one of us and say, "We've got somebody that wants to talk to you." You don't wanna bring people like that into the US Embassy, so we would go out to these safe houses, and you'd sit there and just do detail debriefings and collect the information they had. JAVIER: During one of the raids, we took one of the cars and it belonged to his sister. In the dashboard, there was a note that says, "If you're thinking of stealing this car, do not. This is Pablo Escobar and this car belongs to my sister. Avoid problems." You know, that's the best insurance a car could ever have. JAVIER: He's in his prison about a year. Some of his sicarios are out one night and they come across about $10 million that's buried in the ground. So, they took it back to Escobar, uh, at the prison and say, "Hey, boss, look what your two favorite lieutenants been holding off." That infuriates him. He brings in the two family members. He has them killed there in prison. We're able to take that information back to the government of Colombia to take Escobar out of his own prison and send him back to a jail cell in Bogota. TOM (over TV): Pablo Escobar was King of Kings in the Colombian worldwide cocaine business. A man so powerful, he arranged his own luxurious prison when he finally surrendered to authorities. But, tonight, he is out of that prison again after a bizarre showdown between his guards and government security agents. NBC's Brian Ross tonight has some exclusive details for us. Brian? BRIAN (over TV): Tom, Pablo Escobar is without a doubt the most powerful and ruthless of all the drug bosses. And his final words to a Colombian official before he escaped were, "We are at war again." STEVE: If he had just done his time, he could have been a free man within the country of Colombia. I mean, he's a multibillionaire. That should be plenty of money for anybody to live off of. So that's how he could have won, is to do his time, gotten out of prison, be free and clear of all charges, and then just kick back and enjoy life. But his ego wouldn't allow him to do that. STEVE: In 1992, Pablo escaped. During that years' time is when I became partners, uh, with Javier Peña. Our assignment was to focus on the Medellin Cartel and do everything we could to dismantle the entire organization, and then target Pablo Escobar. When he escaped from his prison, that's when it got real busy. DAVID (over TV): The manhunt continues. Today the government of Colombia rejected Pablo Escobar's terms for surrender. (speaking foreign language) DAVID (over TV): In taped demands made public today and yesterday, the escaped drug lord lists among his conditions for surrender a return to his plush prison with the same guards as before, many of whom are suspected of helping Escobar escape. We're at Pablo Escobar's uh, sitting on his veranda here, which is uh, right outside his private, uh, his private room there. The view that, uh, Pablo had out here is just amazing. You can tell, right now it's a little hazy, but, uh, you can see all of Medellin. All this place, we need to point out, uh, when the military, uh, hit it, when Escobar came in, they broke a lot of the stuff. A lot of the stuff was also stolen by the military during, during Escobar's escape. And, uh, a lot of these holes that you see here are just, uh, holes made by the cops looking for, uh, the supposedly tunnels in this area. The bar or the little discotheque that Escobar had in here, the site of many parties. And here's a picture of some of them. This is one of the prison guards here behind the, behind the bar. This person here is Popeye, one of Escobar's favorite sicarios, John Jairo Velasquez Vasquez. STEVE: I won't call it a palace, but it certainly isn't like any prison I've ever seen. You've got color coordinated draperies and upholstery in his suite. Uh, you've got modern appliances. You've got an audio/visual center. He's got his own little office with a fake fireplace behind it in his cell. I mean, it was just ridiculous. The first six months, we were just right behind the guy. We were already working very closely with the Colombian National Police, but what we did is we joined forces once again with the Bloque de Busqueda, which translates into the Search Bloc. This was a 600-man force of Colombian National Police officers. We were stationed at a place called the Carlos Holguin School in Medellin. It was almost like being in a prison ourselves. We're living in a place with no hot water. We were eating, uh, rice and potatoes three times a day. Uh, you know, if you're lucky, you might get a, uh, a piece of leather that they call steak once a week. JAVIER: I had worked with the leaders of the Search Bloc since 1988. He would always tell me, "Javier, we're not in this to seize dope. We're not in this to seize money. We're in this to kill Pablo Escobar." I know there was money being offered to some of those police officers. Some of these police officers' families were being threatened. Escobar coined the famous phrase, "Quieres plata or quieres plomo?" You want some money, or you want a bullet. STEVE: We were getting frustrated in the fact that there were so many close calls, you're getting all these tips in, but the tips were misleading tips. By that time, we were getting to the point where we felt like we weren't even getting close to him. And you're just thinking in the back of your mind, "Is this thing ever gonna end?" STEVE: Towards December 1993, I'm leaving my family back in Bogota for weeks at a time while Javier's off running around and he's trying to do the same thing. I've been a cop since 1975, that's the closest I've ever ROBIN (over TV): In Colombia, the manhunt for Pablo Escobar intensifies. With the help of US Intelligence, crack police units are raiding suspected safe houses where the billionaire drug lord could be hiding out. US officials say they're intercepting cellular phone calls they hope will provide leads. Top drug enforcement agents now believe Escobar is moving frequently. ROBERT (over TV): His power base has definitely been eroded and, uh, he's definitely, uh, on the run. I mean, they were hot on his trail in Colombia. STEVE: We were living, and breathing, and sleeping this thing. Very, very long days. Neither one of us was allowed to leave country at the same time. One of us always had to be in the country of Colombia during that time. Nobody ever questioned our work ethic. It got to a point where I would stop by the nurses' station about once every other week just to have my blood pressure checked to make sure everything's okay. Colonel Martinez's son was a lieutenant with the His son was using the directional finding equipment. So here you had a father/son team on the good guy side, and they were going up against Pablo Escobar. And the way they intercepted Pablo was when he was talking to his son, Juan Pablo. Pablo always knew he only had a few minutes to talk on the phone before the triangulation would happen and we could pinpoint his location. So, he had a taxi. And even if he's on his phone talking and you triangulate on that signal, by the time you get troops there, he could be five miles down the road. You don't know which direction he went in. So, it was very hard to do. JAVIER: Los Pepes was a vigilante group that was made of ex-Escobar associates. There was a lot of insinuation that they were working with the police. We never saw it. STEVE: This group, basically, turned the table on Pablo Escobar. They used his tactics to combat him. And those tactics included them targeting his properties. They targeted his attorneys at one point. JAVIER: They are fighting Escobar dirty, the way Escobar fought them, kill their bosses, killed whoever was associated with these trafficking groups. They started doing the same tactics. They killed famous horses. Teachers who were involved with teaching Escobar's kids. They started, went after his family. JAVIER: So Pablo Escobar was very afraid for his family, his wife and two kids. The first time he tried to get them out to Miami, we were able to stop them. Then the second time, he gets them out to Germany. REPORTER (over TV): In a bizarre effort to find a secure haven, members of Escobar's family have fled Colombia. Media reports claim that the hasty departure was part of a deal with the government. Escobar would surrender only if his family's safety was guaranteed first. JAVIER: We had an agent on a plane who went to Germany, and we convinced the German authorities to turn them back. STEVE: So they were brought back to Colombia. So we were starting to feel a little more excited that maybe this thing is gonna heat up again. So on December 2, '93, it was my turn up in Medellin. Lieutenant Martinez goes out with his directional finding equipment, trying to wait for Pablo to come up on the phone. Pablo comes up on the telephone. STEVE: He's being intercepted, and we know he's talking to his son, Juan Pablo. STEVE: For whatever reason, Pablo stayed on the phone too long that day. STEVE: So Lieutenant Martinez is out, and he ended up on the street where Pablo was at. As he's driving by, he looks up, and sure enough his gauges start pointing to this house on the left. And as he goes by, he looks up and, lo and behold, there's a guy on the telephone, looks amazingly like Pablo Escobar. They turn around and come back, and sure enough the equipment is pointing now to the right. And as they drive by, Pablo looks at him while he's talking on the phone. STEVE: After years and years of, of problems of drug trafficking, and murder, and extortion. The lieutenant that pinpointed the location saw Pablo with phone in hand. So I'm back at the Carlos Holguin School in Medellin, the base where the Search Bloc of the Colombian National Police Group was located. I went over to the colonel's office to find out what was going on cause you knew something was happening. I stayed back in the doorway. He's on the, the radio passing out instructions. And basically, what you heard is that they've located Pablo. Colonel Martinez is instructing them, "Hit the location. Let's find out if it's Pablo. Just don't take a chance on losing him." They send two of their officers around to the back side of the house. And five officers kick in the front door. One officer, as he was running up the steps, tripped and fell which probably saved his life because Pablo shot at him at that exact moment. When Pablo gets to the third level, he jumps out the window. The bodyguard jumps off the roof. Two police officers engage him in a gun battle and shoot him dead. Pablo had heard the gunshots and realized that he was in crossfire. There's no information for a minute, and then the next thing that comes up on the radio is, "Viva Colombia. Pablo is dead." When we finally got out on the roof there, Dijin guys came to me, for whatever reason they called me Stick. So it came out that Stick was kind of my nickname there. And they were like, "Stick, Stick, could you, you know, take photographs of us with the body?" And, honestly, you kind of get caught up in the moment, the elation, realizing that it's finally over. So I'm taking pictures of everybody. And, and you can imagine that we were all happy this was over. But then they're like, "Stick, Stick, come and get your picture made also." Yeah. So that's how the picture came about. JAVIER: When the ambassador calls me out of Medellin, says, "Javier get on a plane. You're going to Miami, because there's an informant that's gonna tell you where Escobar is." "Sir, we are very close." You know, it was like the day before that I get to Miami, and you know how I found out Pablo Escobar gets killed? The informant is on a phone. The guy who was supposed to tell me where Escobar was. He says, "Javier, they just killed Pablo Escobar." STEVE: They elbowed their way through. And one sister went up and looked at the bodyguard who had died on the ground, and Pablo's body was on the roof. And she began laughing and looking at the police officers, saying, "You have messed up again. This is not Pablo Escobar. You, once again you have killed the wrong person." She was very abusive towards them and laughing at the police. The police allowed her to go on through her tirade. And after a few moments when she started to walk away, they basically told her, "Look on the roof at the other body." Then she realized her brother was dead. TOM (over TV): Good evening. To the rest of the world, he was a notorious drug lord, a ruthless fugitive, and a killer. To the people of his hometown, Pablo Escobar was a kind of cocaine Robin Hood. And when he was buried today after losing a final shootout with police, it was chaos. DAVID (over TV): A crowd estimated at 20,000 gathered today on the outskirts of Medellin to bury Colombian drug lord, Pablo Escobar. People pushed and shoved and finally overran the police if only to get a glimpse of the drug lord. All the while chanting, "Pablo. Pablo." (chanting) STEVE: You got to understand that we had been right there with In fact, during that 18-month period, there were 143 Colombian National Police officers killed as a direct result of this one investigation. JAVIER: It's a victory for us, for all the people he killed, all our friends. I lost some good friends. It was a victory for everybody. STEVE: My personal feeling was, was pretty much elation realizing that it's finally over. The citizens of Colombia are now safe from this guy. He's not gonna be responsible for any more indiscriminate bombings, indiscriminate killing of innocent people, indiscriminate killing of children who just happened to be in the wrong place at the wrong time with their parents when one of his bombs went off. It was just a good day in the history of Colombia. JAVIER: The majority of the people in Colombia are great people. It's just that small percentage of traffickers that ruins it. I always said, "The traffickers are good, but the police are better." REPORTER: The most hated man in America. He stole from thousands of investors. $50 billion. The world's biggest Ponzi scheme. WOMAN: This man has stolen the hard work of so many people. REPORTER: A group of local carpenters, pension money lost. WOMAN: He's an evil man. He didn't just do it to us, he did to charities, he did it to friends. KEITH (over phone): This guy was a financial sociopath. MADOFF (over phone): Now, of course, you listen to them, they're living out of dumpsters and they don't have any money and so on and so forth, and I'm sure it's a traumatic experience for some. But, you know, I made a lot of money for a lot of people. My business was a successful business for thirty-five years. I had more than enough money. If you think I woke up one morning and said well, listen, I want to be able to buy a boat and a plane and this is what I'm gonna do, that's wrong. I thought I could extricate myself after a very short period of time, but the whole thing sort of spun out of control. They had a sense something was not right. But everybody was greedy, everybody wanted to go on, and I just went along with it. It was a nightmare. Imagine not being able to tell anybody. I destroyed the family. They said why did you need to do this? I said, "I don't know." I cried for well over two weeks after he died. Not a day goes by that I don't suffer. RUTH: My loyalty to Bernie was fostered because I knew him my entire life. I was thirteen when I met him, I'm now seventy. LAWYER: Sir, would you raise your right hand, please? Put your left hand on the Bible. Do you swear that the testimony you're about to give is the truth, the whole truth and nothing but the truth? MADOFF: I do. COURIC: This is a CBS News Special Report. Good morning, everyone. I'm Katie Couric here in New York where Bernard Madoff has just been sentenced for the biggest investment fraud in Wall Street history. REPORTER: Madoff recently confessed he had been running basically a giant Ponzi scheme for years whereby one set of investors are paid sometimes unreal returns out of money received from another. As Madoff stood silent, district court Judge Denny Chin delivered the ruling everyone was waiting for: 150 years in prison with no possibility for parole. (phone ringing) WOMAN (over phone): An inmate at a federal prison. To hear the cost of this call press 8 now. STEVE (over phone): Bernie. Yeah, hi, Steve. STEVE (over phone): Hi. So when Bernard Madoff Securities starts, what's your goal at that point? Money, you know, to make money. I had some friends that were stock brokers at the time. It became like a challenge for me to try and break into the business. We started trading in over-the-counter stocks. My original capital was $500. The SEC never even heard of anybody going into business with $500. They had a special interview with me to make sure that I wasn't out of my mind. And I realized from a very early stage that the market is a whole rigged job. STEVE (over phone): Yeah, right. You know, it was, it's always a business where you had to have an edge. DIANA: The investment advisory business operated quite separate. BRIAN: He began with his wife, Ruth, as sort of the bookkeeper. They began primarily by using Ruth's father, who was an accountant, as a referral. MADOFF: My father-in-law formed a group of accounting clients, put in a certain amount of money each. In 1962, I bought this small group of retail clients over-the-counter stocks at $2 a share. Right after I bought them, the market collapsed, and the stocks went down to a half a dollar. All of a sudden, I was faced with these clients that were almost like sort of relatives of mine that had lost all their money. RUTH: I think he was very worried because his father had come close to really making a success. In his family, it was more about financial success than say in my family. My father had a big successful business, he owned a company called, Dodger Sporting Goods and he invented the Joe Palooka punching bag stand. Oh, is that right? And then, you know, during the Korean War there was a steel shortage. He couldn't get steel and his business failed. I lived through that. You see your father, who you idolize, and lose everything. You're frightened about something like that happening and then all of a sudden I go through the same thing, and just I handled it differently, that's all. DIANA: He was at an intersection between lies and truth. Rather than go back to these investors and say, you know, I really lost your money, I failed you, he covered it up, he took all the money his firm had made in those two years and bought those shares back, borrowed money from his father-in-law to recapitalize the firm and never told them what had happened. So they of course thought, oh, this young man, he's the genius, he managed to navigate through this dreadful stock market problem in '62 and still preserve my money. RICHARDS: The impression was that if you got Bernie to take your money, he was doing you a big favor. Our connection with him was Ruth Madoff's sister and her husband, those are my closest friends. People used to give the money to his father-in-law, who was the accountant, Saul Alpern. I sent him a letter. It was something like, Dear Saul, we'd like to invest with you, we've scraped together about $100,000 that my father left me. We're looking for this to take care of our sons, the future and so on and so forth. Within a couple of years after starting this investment, I told my wife, I said, "We're retiring." The Madoff thing was so good for so long that I looked for where can I get more money to give Madoff? I never ever gave an inkling of a thought that there was something wrong with what Madoff was doing. Never. One of the things that's so devastating to me now is we had a wonderful legacy, which they, my brother and both my sons helped build. MAN: That was quite amazing. STEPHANIE: My husband was just a genuinely nice, sweet, sensitive, handsome man. LAURIE (over phone): Mark's hope was to you know take over the business some day. It was his life, it was his interest. DIANA: The question of when it became a fraud is fundamental to the Bernie Madoff mystery. KEITH (over phone): Through documents and testimony. We pretty much think it was in the '60s at some point. BRIAN: Madoff put his sons in the legitimate business, in the trading business. And when people would come to the office, they would see this huge floor and say, "This is the real thing here." The investment advisory business, the scam business, was separate. He had three floors in the famous Lipstick Building. And on the 17th floor was where the scam operated, in a room that was top secret, a certain code access to get into the room. Only certain people are allowed in. BOB: It was as if 17 were a cave. It was a dark area. There was green screen terminal technology, which I hadn't seen in 25 years. There were dot matrix printers, which I hadn't seen in 25 years. DIANA: It was an incredibly orchestrated fraud, and in fact, he created phony books, phony records, phony account statements. But Mr. Madoff wasn't doing any of those trades. MADOFF: Frank DiPascali, he sort of ran the day to day operation for all the accounts, including the hedge funds. Everybody liked Frank. He was a nice kid and he was smart. Understand that I was aware of the fact that books and records were being generated that were false. Frank knew what was going on and I knew what was going on. But nobody else knew for sure what was going on. And it was a total disaster. KEITH (over phone): Mathematically speaking, a Ponzi scheme eventually has to collapse upon itself. HARRY: It's a cash-eating monster. You need new cash to pay off the existing old investors. In '92 I started taking European clients in, European banks and hedge funds. The chairman of Credit Suisse came down. The chairman of UBS came down. I had all of these major banks coming down and entertaining me. It is a head trip. You say to yourself, "All right. All of a sudden these banks which wouldn't give you the time of day some of them all of a sudden are willing to give you $1 billion. By the mid to late '90s they should have known there were red flags and so on and so forth. First of all, I wouldn't give them any facts about how much volume I was doing. Everybody wanted to know that. I was not willing to have let them come up and do the due diligence. I said, "You don't like it, you know, take your money out." And which of course they never did. FRANK: Back in those days, I understand that Mr. Madoff didn't like his investors mentioning his name, let alone what he was doing. I met this individual, Thierry de La Villehuchet and he was invested with Madoff. The fact that he was a sailor and I was a sailor, had established some common ground and trust, I guess. He told me basically he was making 12, 15% per year on this, net, for his clients. So I brought the return stream, the track record, back to Harry and I said, "Harry, if you can do this for me, we can make a lot of money." HARRY: It took me about five minutes to figure out that he was a fraud. I basically read his strategy description. Then I looked at his performance chart. It was a forty-five degree angle, up. It never had variation like the market does. Then I did about four hours of modeling, just to prove the math. FRANK: After four hours of work or so, he came up and said, "Frank, this is a Ponzi scheme." I go back to De La Villehuchet and I said, "What happens if you've got all your eggs with Bernie and he is a fraud?" And Thierry says, "He can't be. I've got all my money with him. I've got most of my family's money with him." "Almost every royal family that I know has got money with him." He says, "Almost every professional associate that I've ever dealt with all my life are invested in him. We really have done our work, Frank. You just don't have all the facts." We have to say we were not any archangels of financial justice here. We were competitors. HARRY: When you have a bad player on the field, a dirty player, you want him removed from the playing field. And I tried to remove him from the playing field, but the referee wasn't listening. My team and I tried our best to get the SEC to investigate and shut down the Madoff Ponzi scheme with repeated and credible warnings to the SEC that started in May 2000. FRANK: He was stonewalled every time he called them. I mean, it was well, we got your stuff, we're investigating, we'll call you if we need you. DIANA: You just get a sense of an agency that could not imagine that this man they had respected and relied on for guidance and advice for decades could possibly be running a fraud. As he becomes wealthier, he has his home in the south of France now; he has an office in Mayfair in London now. He's got a track record that people are whispering quietly about over the cocktails at the country club. And it's astonishing. As the world becomes more and more turbulent, Madoff looks like the sure thing, the quiet thing, the conservative, safe, sleep-well-at-night thing. That drew an awful lot of conservative investors to him thinking that they were giving up high flying returns to get the safety and consistency that Madoff gave them. FRANK: The arrogance just fried Harry. So then he writes this letter in '05. With the 28, 29 red flags on it. HARRY: In November 2005, I told the SEC exactly where to look, providing them with a long series of 29 red flags that any trained investment professional would have immediately understood. FRANK: I read it, and I said, "Oh my God. They're gonna be on this. This is, you're giving it to them. You're giving them everything." MADOFF: They asked me, "Where are the securities for the clients?" And I said, "At depository trust under 646, that's my account name." And when I left that meeting, I figured that's it. They got me. You know, I lied to them and said they were at the depository. And I figured for sure they're gonna call the depository on Monday morning and find out the securities weren't there. It was quite easy for them to have done that. They just didn't check it. And they never did. That was a major screw up. WILLIAMS: We begin our coverage tonight of what's been called the worst financial crisis in modern times. Certainly the largest financial disaster in decades in this country and perhaps the end of an era in American business. REPORTER: Day after day of triple digit losses. The Dow's worst week in its 112-year history. BUSH: We are faced with the prospect of a global meltdown. MADOFF: In 2008, everything was coming unglued. Everybody wanted their money back, and I was the only liquidity pool on Wall Street at the time because unlike all hedge funds, my money was available as far as the clients were concerned, literally within seven-day settlements for them. Hello? AMIT (over phone): Hi Bernie, it's Amit calling. How are you? Good, Amit, how are you? AMIT (over phone): Good, good. I know I promised I wouldn't talk to you for two months but I wanted to request that we withdraw some amount from our accounts, well today and then, and then the balance, of course, once the final picture is known. MADOFF(over phone): What numbers do you have so far, Amit? AMIT (over phone): Sure, so it looks like we'll need about 130 million for tomorrow and then for the end of the month, Bernie, it is looking like it's going to be an excess of another 700 million. 700 million. AMIT (over phone): Yeah, it's just, it's been remarkable. We've seen a wholesale exodus. So we'll call you as soon as we have the final, final number and let you know, but I did want to let you to know in advance that it was going to be a larger number this month. KEITH (over phone): He had about $250 million in the bank and he was looking at 1.5 billion in redemptions due the following week. And that number was just going to increase because no money was coming in. It was all outbound. So it was doomed at that point. MADOFF: I realized that I was dead. I realized that there was no way I was ever going to recover from any of this. ELAINE: He was, like, preoccupied all the time, locked in his office doing figures. And he became obsessed with his blood pressure, obsessed with it. At that stage I was just sort of in a panic about the whole thing. At the last minute, I was trying to return monies to employees there, and to friends that worked there because a lot of them had all their savings and so on. I didn't know what to do. I felt bad because how am I going to pick out which people to send it back to and you know I never sent it out. ELAINE: The boys went into his office and shut the door. And I think there were raised voices, and then they got up and Bernie said, "Call the driver." And the three of them left. So we got into my car and my driver drove two blocks to the apartment. That's when I broke down and I just told them, "I owe all this money out and I'm not going to able to recovr it and so on and so forth." You know, I was crying. Andy, I remember, took me in his arms. He just felt sorry for me at that stage. Mark was standing there just in shock. You can just picture it, I mean, one day you think your father is running this multi-billion dollar business and everything is fine and he's happy and they're happy. Then all of a sudden the world comes crashing down. They immediately left. They went to a lawyer. The lawyer said you got to turn your father in. And I never saw them again. MICHELLE: If you work on a trading desktop, what you're doing for one second before you walk out the door and clean your desk out for the day. Bernie Madoff has been arrested. After he told senior employees yesterday that his business was a giant Ponzi scheme. He tried to distribute early bonuses to employees of his firms, prompting questions by senior employees. Mr. Madoff allegedly told employees he had a couple of hundred million dollars left, wanted to distribute it before turning himself in to authorities. This all according to. ELAINE: We were stunned. I remember we all looked to each other, and we said, "It's a mistake. It's not Bernie. It's an absolute mistake." RUTH: It was very hard to imagine the Bernie they knew to be the Bernie that did this. You know, he was a guy that everybody loved and he seemed to like them. It seemed unthinkable that he could do this to people, destroy their lives that way. I still have a hard time processing it. FRANK: I guess I was leaving my office in Boston there and my phone rang. It was Harry and Harry was excited, "The guy just blew up. I knew it was a fraud the whole time. He admitted it was HARRY: Since the news broke, I have not been able to get a full night's sleep. I wake up and contemplate it in the early hours of the morning, and I always think of the terrible tragedy. (ringing) FRAN: My nephew, he called us. He said, "Uncle Steve." RICHARDS: He said, "Uncle Steve, Bernie Madoff was arrested." I put on the news and it was everywhere. BECKY: Bernard Madoff has been arrested and charged with running a $50 billion Ponzi scheme. This is one of the biggest fraud cases ever. RICHARDS: The second I heard, "Ponzi scheme," I said, "We are broke." FRAN: Wait a second. And I said, "I don't believe this." I think this is, something is wrong, and I don't believe that this really happened. And then just that whole day was like a blur because we couldn't believe it. We woke up penniless, destitute, and nowhere to get money from. MORT: He betrayed not just his friends, but his closest friends, and people who entrusted him with everything they had saved. He betrayed charities whose sole purpose with the funds they had was to do good. I think in the Bible, we call it an abomination, an act so alien to our values and our natures that it cannot be understood or explained. JEFF: Stunned investors are still wondering today if anything is left of the billions they invested with Wall Street investor Bernard Madoff. ANCHOR: Madoff confessed to running a giant Ponzi scheme. Early investors were paid unreal returns out of money from other investors. When I was arrested, I admitted that I was the one that did this and I was guilty and I didn't see any reason to go to trial, put my family through a trial because it wasn't gonna change anything. REPORTER: What's he doing? WOMAN: What? Mr. Madoff, what do you have to say for yourself? What do you have to say to the public? To your investors? MADOFF: Don't push me. KEITH (over phone): We were shocked that Judge Chin allowed him out on bail. He certainly had the means to flee and certainly the motivation to flee. REPORTER: What about all those people that lost their money? He told us, "Oh, I'm glad I was caught." No one's ever glad they're caught. But I do think he was just exhausted mentally and physically. And he just didn't flee. RUTH: It was unthinkable to me. Hate mail, phone calls, lawyers. It was just horrific. CURRY: The drama surrounding Bernie Madoff's alleged $50 billion scam has taken a tragic turn. Police say that a distinguished investor whose fund lost nearly one and a half billion dollars in the scheme has committed suicide. REPORTER: Thierry Magon de La Villehuchet was well respected, a high-powered fund manager on Madison Avenue in Manhattan. Friends say since the Madoff scandal broke, de La Villehuchet has been subdued, and it all came to a head on Monday night when he asked the office cleaning crew to leave him alone after 7:00 PM, that he had work to do overnight. RAY: Then, sometime this morning, they found the man at his desk, cuts made to his wrist with a box cutter. FRANK: I was crushed, really crushed. Thierry was a sailor and he was a hunter. He could have taken himself out any way he wanted to if he wanted to just remove himself from the pressure. The man chose the method he did, watch himself bleed to death, slowly, in my mind only, as an act of atonement. (camera shutter) REPORTER: Eleven times when asked how does he plead, Bernard Madoff said, "Guilty." TOM: The judge heard the arguments, and then immediately ruled that he should go to jail. BRAD: I'm listening to all these pundits say, "Oh, he's going away for life and he just wants to spare his family and he's gonna do the time. That's not gonna happen. The government needs him. He's the only one that can help them solve and get to the bottom of this mess. MADOFF (over phone): They immediately started to say, "Listen, if you can cooperate and you could give us information as to who else was involved, you know, that will work in your favor." I said, "I'm not going to give you information about anybody else," because quite frankly, there was nothing for me to give them about anybody else from a criminal standpoint. KEITH (over phone): About halfway through, I realized this guy is just lying. So I told my boss, "Look, you guys can finish up here. I'm going up to his office and seeing what we have." We're talking 2,000-3,000 boxes, hundreds of computers, and that's kind of when we started the case. You know, just went through document by document, trying to see what was there. REPORTER: Despite Madoff's silence, the investigation continues. BRAD: He's refusing to identify where the assets are or who his other co-conspirators are. If those questions are not answered, then the government should go after absolutely everyone that they can go after, the sons, the brother, the wife, Ruth. RUTH: I didn't know. Bernie went to great lengths to not include the family in any of this. That was his biggest regret of anything is how we were hurt. STEPHANIE: My husband knew nothing. He was in pure shock. You could see the betrayal on his face and in his body. He grew in a beard to try to disguise himself. He was physically hunched over, and he was destroyed. REPORTER: Bernie Madoff is going to learn his fate today. His sentencing hearing begins at 10:00 AM Eastern Time. RONNIE SUE: The man had created an aura of financial stability, of a guru in the market, and it was a facade and that's what I saw when he walked in the room, emptiness. REPORTER: Devoid of emotion, Madoff first spoke of his immediate family, none of whom were in attendance. "How do you excuse lying to your brother and two sons," he asked. "How do you excuse lying and deceiving a wife who stood by you for 50 years and still stands by you?" Turning toward his victims, Madoff said simply, "I am sorry. I know that doesn't help you." Calling Madoff's crimes extraordinarily evil, District Court Judge Denny Chin noted he had not received even a single note or letter in support of Madoff. Then, as Madoff stood silent, everyone was waiting for, 150 years in prison, the absolute maximum with MIRIAM: I heard the click of the handcuffs, which pleased me greatly. He was largely expressionless, as he always is. I feel at once strangely relieved and totally dissatisfied. He took away my ability to pay my rent, to eat. I'm on food stamps now. I scavenge in dumpsters. I can't buy medication. This sentence was handed to me on December 12th and I will be living out this sentence until the day I die. REPORTER: Now that Bernie Madoff is behind bars, investigators are focusing on his wife. WOMAN: She has $69 million that they do not believe is hers. AMY: As confessed swindler Bernie Madoff begins his third day behind bars, questions now about who else may have been involved in the world's biggest Ponzi scheme, and what happened to all that money? REPORTER: A complaint filed by the Massachusetts Secretary of State says Ruth Madoff transferred fifteen and a half million dollars out of an account in the weeks before the scam unraveled, including $10 million on the day Madoff confessed to their sons. Madoff's wife, Ruth, has agreed to surrender more than $80 million including her New York penthouse, but will keep more than $2.5 million cash. ROLAND: Ruth Madoff, who was in the apartment when we arrived, has vacated the residence. She has surrendered all personal property to the United States Marshals Service. We're here in the Madoff penthouse here in New York City. This is the penthouse where Bernard Madoff spent the last days of his life as a free man. Bernard Madoff's desk, this is where he did most of his work. Great breakfast nook. Marble counter-tops. Unfortunately, these were all purchased based on lies and deceit but again, we hope that dark cloud has moved on. I thought possibly she should have gone to trial on the thing so she could have kept the homes and everything. She just didn't wanna do it. She just was so devastated by the whole situation and she was embarrassed and ashamed of what I did and he said I can't possibly live in any sort of luxury when everybody else is in such bad condition. And I understood that. HARRY: That of course won't begin to cover investors' losses, but we learn tonight, Madoff's two sons may be forced to cough up some cash. REPORTER: Trustee Irving Picard is poised to file civil complaints against Madoff's two sons, Mark and Andrew, who ran their father's trading division, and Peter Madoff, Bernie's brother and the company's chief compliance officer. DAVID: My belief is yes, they knew. And the reason I believe that is they were officers of these companies and directors in certain instances in a very highly regulated environment. Both my sons, they know for a fact that the market making business, which is the business that they and my brother ran, was a successful business. And they understood that they were living off of that business. There's no secret bank account. You're not gonna find anything like that. There's no smoking gun here. KEITH (over phone): Call it what you want, conscious avoidance, willful blindness. They definitely should've known. The market making business, the so-called legitimate side, was losing money left and right for years. What was making up the difference to fund it was cash coming in from the investment advisory business, the Ponzi business. They had fake investment statements from their own personal accounts that suited their needs at the time. They're applying for loans and whatnot. Those were in their own personal offices, so to say they didn't know something was amiss is problematic at best for them. DAVID: If you were those sons, wouldn't you be embarrassed to keep that money? They should give it all back and if they don't give it all back, I think we have an obligation to go get it and take it all back. IRVING: We will pursue them as far as we can pursue them and if that leads to bankrupting them, then that's what will happen. REPORTER: Are you worried about losing your home, Mr. Madoff? STEPHANIE: He knew nothing. Every single fight was about the same thing. He said to me, "Stephanie, I don't have any clue what my father does. I just wanna know what happens if he dies, what I'm supposed to do." And Bernie would always say the same thing, "You do your job and I'll do mine." RUTH: Mark begged me to stop seeing Bernie. He was saying, "How could you? How could you see a man that's done this to his own children? All our friends whose lives were ruined." And I knew all that but I just, I just couldn't let him go. I said that I was having a really hard time abandoning him while he's under a life sentence in prison. INTERVIEWER: Uh-hmm. RUTH: I visited him four times in two years. It wasn't as if I put up a tent outside the prison and saw him daily. I had no idea of the dire effect that that had on Mark. HOLT: Another stunning and dark chapter to the Bernie Madoff saga was written today when the oldest son of the disgraced financier who first alerted police to his father's multi-billion dollar Ponzi scheme committed suicide exactly two years after his father was arrested in a massive swindle. REPORTER: Early Saturday morning, his father-in-law found Mark Madoff hanged with a dog leash in his New York City apartment. MARTY: Bernie, while I will not send you pictures of your grandchildren, there is one picture I do want you to see, what I saw when I walked into that apartment at 7:30AM in the morning. I want you to see your son's corpse hanging from a rafter, his head at a left leaning angle, looking down at you asking, "How could you do that to your son?" Who up until two years before his death had given you the greatest gift, his unconditional love for his father. RUTH: I called the prison and I got, it was a chaplain or something, and he got Bernie. I think he told him before I spoke to him. As soon as the chaplain came in to get me, I knew something happened. STEVE (over phone): Oh, God. That's how they notify you here when someone, when someone dies. STEVE (over phone): Right. Ruth must have been hysterical. She was hysterical. Was she mad too or just upset at that point? She was, I think at that time, all she was was just in shock, you know? STEVE (over phone): Yeah. And angry at me, of course. How could she not be angry at me? I destroyed our family. I didn't eat. I didn't come out of my room for days. You know, I didn't speak to anybody and so on. I cried in private because if they saw me, they probably would've put me in the suicide watch. I blame myself 100% for my son's death. I mean, you know, you know what it is to live with? I may sound okay on the phone, trust me, I'm not okay. I never will be. SAFER: Probably a majority of people can't believe that you can live with someone for 50 years and not know. RUTH: It's hard for me to believe, too. SAFER: Had you known, would you have turned him in? RUTH: I'm glad I didn't. That would have been tough but I would have left. Whether I'd turn him in or not, I don't know. STEPHANIE: All those same people out there who think that my husband killed himself because he must have known something, that couldn't be further from the truth. My husband's death was only proof of his pain. ANDREW: What he did to me, to my brother, and to my family is unforgivable. What he did to thousands of other people. Destroyed their lives. I'll never understand it. And I'll never forgive him for it and I'll never speak to him again. Peter Madoff pled guilty and he was sentenced to 10 years. Frank DiPascali, he died of cancer. So he was never sentenced. FRAN: Like my cousins in California say, "You know Fran, you're funnier now than you were, than you were before. I said, "I have new material. It's called poverty." We can't sit and cry. We've gotta pick up the pieces and move on. MADOFF (over phone): It goes off my mind all the time. I say to myself, "How could you do this? Why did you do this?" I still can't figure it out. I mean, look, I see a psychologist here once a week and probably will for the rest of my life. I mean, I can't believe that I did this. Something in me just allowed myself to do it and I, STEVE: Just opened up my book, started reading the first sentence in the paragraph when I heard what sounded like a freight train coming through my bedroom. I jumped out of the bed and then there was a thumping sound that consecutively got much faster. And with each thump I felt the rig actually shake. Then there was an initial boom. The lights went out. MIKE: And there was a huge explosion. REPORTER (over TV): The explosion rocked the rig about 10:00 Central Time, spraying flames in every direction. STEVE: Well, I saw fire from derrick leg to derrick leg. PROFESSOR: When you have oil and gas under pressure, underground, it erupts upwards. RIG WORKER: It was extremely loud. It actually started sounding like a living thing. It's the sound of escaping gas feeding the fireball incinerating the Deepwater Horizon. RIG WORKER: It's like you're almost waiting to die. There's people screaming. You feel the heat from the fire. Scared to death, I figured this is my time, I'm gonna die. REPORTER (over TV): 126 people were on board at the time of the explosion. Some jumped more than 75 feet into the ocean. CURRY: The Coast Guard is pressing its search today for 11 workers still missing. JAMES: I started to have a bad feeling when the sun came up. It got very precarious at that time. Time was running out. ♪ ♪ FRANK: Deepwater Horizon, a state of the art, semi-submersible, dynamically positioned by satellite drilling rig. And Transocean rents Deepwater Horizon to the big oil companies at about a half-million dollars a day. Now, what the oil companies use Deepwater Horizon for is to drill the wells. They come out, they drill in really challenging environments, they find the oil, sometimes they set up the production well, then they go to the next job. CHRIS: It is different than any other job. A lot of people when they first start out they try to compare it to construction, and it's a completely different thing. Being away from your family. You know, something happens you can't just leave, it, it's all weather permitting. RIG WORKER: These are our charts, and this is our tracking of hurricane Ivan. Put a mark on that piece of paper where we's at. CHRIS: Everybody out there gets kind of close, I mean as far as friendships and stuff like that. RIG WORKER: Are you gonna do some work now? CHRIS: Really I'm with them more than I am my own family most of the time. RIG WORKER: All right, there's Yancy. CHRIS: It's a little different than being home because you know it is dangerous. You never know when the cables are gonna break or, or the equipment's gonna fail. RIG WORKER: This is our subsea control panel, this is used to shut down any blowouts that come from the subsea floor. CHRIS: The guys you work with a lot of the time they do have your life in their hands. -Busted! -We're workin'! -Yeah. ALWIN: That night was an amazingly calm night. Very little wind, I mean it was just ideal. I just noted, uh, mentally that evening at sunset how, how pretty it was. I was tending to paperwork. My mate, he noticed quite a bit of mud falling through the center of the rig. I stood up to see what, see what he was talking about and I turned around and that's when I noticed the, uh, mud raining down. So, I looked up out the side window, port side of the vessel, and I seen the mud come out. When the mud comes out the top of the derrick, it's not good. RANDY: My room phone rang and the person at the other end of the, uh, line there opened up by saying, "We have a situation." He said, "We have mud going to the crown." I was just horrified. I said, "Well, do y'all have it shut in?" He said, "Jason is shutting it in now." And he said, "Randy, we need your help," and I'll never forget that. And I said, "I'll be right there." ALWIN: I contacted the Horizon bridge on the VHF radio and advised them of the mud coming down and asked them what the situation was. With tension in his voice, he immediately advised me they was having trouble with the well. ANDREA: I came up to the bridge. At that time I felt a jolt. Yancy came over and turned the CCTV over to the starboard side, and that's when I witnessed mud coming from the starboard side. CHRIS: When I woke up, I heard, like, a loud buzzing, Uh, I wasn't sure what it was and I just thought somebody was cleaning or something like that outside my room, so I just fell back asleep. MIKE: I heard a hissing noise, and, and a thump. Within seconds of that I start hearing beeping. And I'm hearing the beep, beep, beep, beep, it's, it's continuous. And I'm thinking to myself, "Okay, what, what's going on?" And I'm trying to put all this together in my head as to the thump, the hissing, and now the beeps. I hear the engines start to rev, normal operating RPMs to way above what I'd ever heard it run before. And it's continuously, steadily rising. And I knew then that we were having a problem. As I start to push back from my desk the computer monitor exploded in front of me. All the lights in my shop popped. The light bulbs themselves physically popped. Now I know we're in trouble. I reached down to grab my door, and at the, simultaneously of grabbing the handle, the engine goes to a level that is higher than I can even describe it. It's spinning so fast that... it just, it stopped spinning, (explosion) and there was a huge explosion. That explosion blew the fire door that was between me and those spaces off the hinges. RANDY: It blew me probably 20 feet against a bulkhead, against a wall. And I remember then that the lights went out. Power went out, I could hear everything deathly calm. CHRIS: Then I started trying to find my clothes in the dark. I grabbed my boots, put them on. MIKE: I couldn't see anything, I couldn't breathe, there was no oxygen. I crawled across the floor, found the opening, made my way out. Had a small pen flashlight in my pocket that I put in my mouth to try to, to see, I still couldn't see, I, I didn't know why I couldn't see, I just couldn't see anything. I made it to the next door by feel. And as I reached the next door I reached up and grabbed the handle for it, it then exploded. RANDY: My next recollection was... that I had a lot of debris on top of me. I tried two different times to get up. But whatever it was, it was a substantial weight. And I told myself, "Either you get up, or you're gonna lay here and die." MIKE: Crawling through the ECR, my arm wouldn't work, my left leg wouldn't work, I couldn't breathe, I couldn't see. I knew I had to get outside to some fresh air. I crawl across the bodies of, of at least two men. I don't know their condition. I'm trying to get them to respond, they're not responding, I assume they're dead and keep moving because I know that I'm in no condition to help them. I can barely help myself at this point. So, I was tripping and falling, trying to make my way to the outside watertight door. I get about halfway across it and I can actually start to see light, a dim light so I, I'm, assume I'm headed in the right direction and I keep going towards the light. Eventually I make my way outside. I've got my bearings, got my eyes cleaned out. There was no walkway, there were no handrails, and there was no stairwell left. The wall, the handrail, the walkway, all those things were missing. They were completely blown off the back of the rig. One more step and I would've went in the water. RANDY: So I open my cabin door, right leg was hung on something, I don't know what still, but I pulled it as hard as I could and it came free. I attempted to stand up. That was the wrong thing to do because I immediately stuck my head into smoke. And with the, uh, training that we've all had on the rig I knew to stay low. I got on my hands and knees, so I was totally disoriented. I'd lost orientation on which way the doorway was. And I remember just sitting there just trying to think which way is it. And then I felt something that felt like air, and I said to myself, that's the direction I need to go, that leads out. So, I had to crawl very slowly because that end of the living quarters was pretty well demolished, debris everywhere, but I made it to the doorway, and what I thought was air was actually methane. And I could actually feel like droplets, it was moist on the side of my face. I continued to crawl down the hallway slowly and I put my hand on a body and it was Wyman Wheeler. MIKE: There's two lifeboats there on that lifeboat deck. And from what I saw, what I heard, and what I felt, I seriously considered launching a lifeboat by myself because I knew that something really, really bad had happened and that it wasn't gonna get any better any time soon. I had an inclination that this was way worse than anyone could expect. And I thought about it for a second and I remembered that I had, you know, I have responsibilities. Yeah, I have a emergency station to go to. The problem was my emergency station no longer existed. So, I made a decision to put my lifejacket on right there, and try to make my way to the bridge, which would be my secondary muster station. I determined if I couldn't make it there, I was gonna come back and launch the lifeboat by myself. CHRIS: I'm on the fire team, so I was trying to get to my, my fire station. My main fire station is the one in the back of the rig. And I could see it and I could see that nobody was there, and there was a bunch of smoke around it. I turned around to go back to the front of the rig. And that's when I saw the flames on the derrick. And soon as I saw that I knew there was no way we were gonna put it out. We were just gonna get off of there, I was sure. That's when my panic set in. I mean, that scared me absolutely to death, right then. I've never had a feeling like that. I mean, the lifeboats were probably gone, and I didn't know, I hadn't seen anybody until this point, I didn't know if I was the only person still on the rig or what. Uh, that's all I kept thinking was, well, we're all dead. DUSTIN: I was relieved for the night. On the way home, I received a phone call. They said, "We just had an oil rig explosion, you need to come back here as soon as possible, five minutes ago." So I said, "Okay. I'm turning around right now." I said, "Just throw my, all my gear in the helicopter and I'll change en route." Just ran right to the helicopter, hopped in, and off we went. JOHN: As soon as we took off I, I put my night vision goggles down and I could see this immense glow on the horizon. It looked like I was flying to New York City. The glow was that immense and normally you, you might see a faint horizon or you see no horizon at all. And, uh, I, I told my crew, I said, "You guys, you see that light on the horizon? That's where we're going to." It sunk in right there that this is, this is real, this is the real thing. We don't know what we're gonna see when we get there but we know it's big. RANDY: The next thing I recollect is I saw, like, a beam of light, like a flashlight bouncing, and I saw that to be Stan Carden. And about that time, Jimmy Harrel came out of his room. He told me he was in the shower when the explosion happened. He had managed to find a pair of coveralls and put those on. And I said, "Jimmy, I've got Wyman down right here." So, we asked him to go to the bow and get a stretcher. We continued to remove this debris off of Wyman. I helped him up and I was gonna try to help walk him out, thinking that that might be quicker. He made a couple of steps with his arm around my shoulder and he was in pain, and then he said, "Set me down, set me down." So we set him back down and he said, "Y'all go on and save yourself." You know, and I said, "No, we're not gonna leave you, we're not gonna leave you in here." MIKE: Once I got on the bridge, I reported immediately to the captain that we have no propulsion, we have no power, and I said, "You need to understand, engine number three, for sure, has blown up. We need to abandon ship now." STEVE: I turned around, I didn't recognize who it was at the time because he was covered in blood. It was Mike Williams, Chief ET. And I asked him, "What do you mean gone?" He said, "They've blown up. They're all gone, they've blown up." Upon looking at the screen there was still nothing. No engines starting, no thrusters running, nothing. We were still a dead ship. Chris Pleasant, the subsea supervisor was standing at the BOP panel. I hollered out to Chris Pleasant, "Have you EDS'd?" He said he needed permission to EDS. Somebody on the bridge hollered out he cannot EDS without the OIM's approval. I hollered out, "Can we EDS?" He said, "Yes, EDS, EDS." When I turned back to Chris, he was in the panel pushing a button. PLEASANT: You know, I hit the EDS and I seen it go to close and I was looking through that panel trying to see what was going on. After I saw that I had no hydraulics, I had no pressure in the system that allowed those functions to work, I knew it was time to leave. STEVE: I hollered to Chris, "I need confirmation that we have EDS'd." He said yes and he pointed at a light in the panel. PLEASANT: Steve Bertone, then he turns away and he said, "I'm going to the emergency generator room," like that. And I said, "You need me to go with you." And he didn't say nothing, but I looked out that door and I said, "I ain't going." STEVE: When I left the bridge, I went to close the watertight door and Mike Williams pushed the door back and he, he said, "You're not going alone, chief." I said, "Well, come on." Paul Meinhardt, the motorman, also fell in line and we ran towards the, uh, standby generator. As I was running I looked up at the derrick, and I could see nothing but flames, because I could see no equipment, whatsoever. It was solid flames. When we walked into the, uh, standby generator room, my thinking at that point was, what remaining fuel would be in the riser would burn away, and we were gonna need power as well as fire pumps. I hit the start button. There was absolutely no turning over of the engine. At that point I said, "That's it, let's go back to the bridge. Uh, it's not gonna crank." MIKE: On our way back to the bridge is when I noticed, I believe it was lifeboat number one, had descended, and was motoring away. They had descended and disconnected from the rig. CHRIS: We went down to the life capsule deck. Everybody was panicking. Some people were trying to stay calm and do what needed to be done, like the Chief Mate, Captain. So, they were trying to get the stuff handled the way they were trained and knew how to handle it. Some people were jumping off, some people were holding people back from jumping off, they wouldn't let 'em. And then other people were screaming we've got to get out of here, we've got to get out of here. So I mean, there was a certain level of panic that everybody was in that made things a little more difficult in getting off the rig. I got in the number two lifeboat, everybody was in there hollering and screaming, you know, "We gotta go. The derrick is fixin' to fall on us." They finally got everybody in there and shut the door. Then they released the lifeboat to, down to the water. MIKE: As we were making our way down the ladder way to get to the lifeboats, lifeboat number two descended. So now there are, the two forward lifeboats are both gone, they're both unavailable. Once they go down there's no coming back up because we had no power. There was several minor explosions occurring, things are falling, you can hear stuff popping. RANDY: It seemed like an eternity, they came back with a stretcher. We were able to get Wyman on that stretcher. When we got outside of the living quarters the first thing I observed was both of the main lifeboats had already been deployed and had left. I also looked to my left and I saw Captain Curt and a few of his crew starting to deploy a life raft. And we continued down the walkway until we got to that life raft and we were able to catch the head part of the stretcher and assist getting Wyman into the life raft, and I think we actually fell, trying to, you know, get him into the life raft. But the main thing is Wyman was there. You know, he didn't get left behind. STEVE: There was a lot of explosions still going on and immense heat. All the flames and heat from the rig floor were coming down the forward part of that deck as well as all the flames and the heat from under the rig that were meeting I guess in like a vortex or something right there at the life raft. But I can remember feeling the intense heat on my knees, and I also heard screaming "We're gonna die, we're gonna die." And I honestly thought that we were gonna cook right there. MIKE: I wasn't sure that the life raft was gonna survive. There was a crowd of folks there trying to get into this small opening. There was so much heat coming up I thought for sure the life raft was gonna pop or melt and the people inside were gonna cook. REPORTER (over TV): Moments after the rig first exploded you can hear the roar. gas, feeding the fireball, ALWIN: We was approximately 100 meters out. I gave the command to launch shortly after we've seen the first three guys jump off the rig. AL: I knew this was big, I've never seen flames that gigantic before, that huge. This was like seeing hell on earth. STEVE: The next thing I knew the life raft was descending. When we touched the water I heard somebody holler out, where are the paddles? I jumped out of the life raft, Chad Murray jumped out, was right behind me, and grabbed hold of the rope on the side of that life raft and started swimming, trying to pull the life raft away. I was swimming on my side, looking up at the rig. I would say 25, 30 feet above me there was a tremendous amount of smoke billowing out from under the rig. YANCY: I asked the captain what about us. And he said I don't know about you, but I'm going to jump. So he actually jumped first. I waited for a minute because when I looked over the life raft was basically right underneath me. So I waited for a minute so it could actually move out the way and, uh, I jumped. When I resurfaced I had the life raft was like 10 or 15 feet away from me. So I swam to the life raft, and I seen the captain and a few other guys that were on the outside of the life raft. STEVE: As we're swimming trying to pull this life raft away from the rig I got to a point where I could see the helideck. I witnessed an individual running at full speed across the helideck, when he jumped off the end of the helideck he was still running. Just before he splashed into the water he was actually looking over at us. MIKE: In our training, they teach you to reach your hand around your life jacket, take one step off, look straight ahead, cross your legs, and fall. The problem with that is there's now a life raft down there at the bottom. Maybe 90 feet, 100 feet. It's a long ways. So I took off running and I jumped. I cleared the life raft by a pretty good ways. Once I hit the water, when I came back up I couldn't see anything again, because now I've got a new set of problems. Oil, hydraulic fluid, gasoline, diesel, whatever it is that's floating on the water is now burning my entire body. I'm now covered in this sludge. I don't know what it is, it's burning I can't hardly breathe, but I could feel the heat from the fire underneath the vessel. At that point I started back stroking with the one arm and one leg that would work. Until I remember feeling no pain, I remember feeling no heat, and thinking that that was it, I had died. Sometime later, something apparently woke me back up, a pop, or explosion, something. And I remember feeling the heat again, starting to feel the pain come back, thinking I've gotta swim, I've gotta swim and I started swimming again. Then I heard something in the distance, I heard "Over here, over here." I was thinking to myself what in the world can that be? Whatever it is I'm gonna go to it and just started swimming as hard as I could to get to it. And then I felt something start lifting me out of the water. A small orange rescue craft had grabbed me, and flipped me over into the boat. At that point the guy said there's a raft in the water. We proceeded to go towards the rig. Now we're close enough that I can feel the heat, I'm starting to feel the heat again, and I see the life raft and it's literally still under the rig. And I can see people outside of it. We get up to 'em, throw 'em a line, they get tied on. YANCY: Then the fast rescue boat pulled us to the starboard side of the Bankston. The Bankston crew was throwing down Jacobs ladders to the lifeboats, to where people inside can get up on deck. I seen Carl, the rig operator, he was taking muster. I asked him how many people we were missing. Come to find out it was 11. JOHN: We're flying as close as a half mile, to a quarter of a mile, circling the rig, looking for survivors in the water. We smelled the smoke, we smelled the oil, the fumes. We felt the heat through the cockpit, we felt it in the helicopters, you know, through the windshields. It really hits home and strikes you that hey, we're flying at 300 feet and the flames are higher than we are, probably up to 500 feet. AL: I was looking into this burning hulk of metal and it was like looking into the face of the devil. It was, it was like a living thing. YANCY: They already had boats that were putting water on the rig. I don't know where they came from. They came out the wood work. They were there in no time. The Coast Guard helicopters were flying around. AL: We were hovering about half a mile to the East of the burning rig. Initially we got the word that we were to pick up a critically wounded victim so then we lowered our rescue swimmer to the Damon Bankston. COAST GUARD: Moving out swimmer, moving out swimmer. JOHN: The rescue swimmer, he's basically our paramedic, he's our assigned EMT, so he's the guy who knows the first aid. COAST GUARD: Roger, hold position I'mma bring him down. Swimmer's just below the rail. Halfway down, 40 right, 40. Okay swimmers on deck. STEVE: When the Coast Guard arrived, the rescue swimmer, he came in and he asked who's the critical. Buddy Trahan was the worst. And at that point they brought in a gurney. I stepped to the backside of the bed to assist in getting Buddy on the gurney. As I rolled him he was screaming and hollering that his leg was hurt real bad, he had a severe laceration on his leg. He also had a twisted and mangled lower-calf, his fingernails were gone, he had a hole in the side of his neck. And I looked back and Buddy's back was burnt from belt to head. Once we got him on the gurney they took him out. DUSTIN: We went to carry him out after we strapped him in and the supply boat was full of big containers, so you really had no clear path to the back of the boat. So we were like, "How are we gonna get this guy out?" We actually had to lift him up over these containers and got him hoisted up to the helicopter. AL: It's hard when you're departing a scene like that, to know that there's still 11 people missing. Our mission was to return to base with a critically injured victim, but it still felt bad to leave the scene. But that was the task we were given. JESSICA: It began with a powerful explosion, a column of flames shooting into the night sky over the Gulf of Mexico. The oil rig still burning and could topple into the water at any moment. MARY: The source of that fire is predominantly coming from the well head itself. It's crude oil that is leeching from this wellhead. And as long as that crude is leeching we're gonna continue to see that fire. YANCY: After the helicopter left, and it was like, with the wounded, it was like everything just kind of like fell in place. Finally able to start calming down. CHRIS: And we sat there pretty much watched the rig burn for six or seven hours. That's something I'll never forget. The images just burned in my head, I'll never forget. Knowing that, after we took the muster and stuff we figured out, you know, we were missing 11 guys. And, most of us, we assumed they were, they were on the rig, we didn't know, and that was pretty tough not knowing. DUSTIN: I went home that morning and turned on the news and then you find out well there's still 11 people missing, it's like "Oh." It's like, "Man, I hope they made, I just hope they made it off." CURRY: In the news, the Coast Guard is pressing its search today for 11 workers still missing on a burning oil drilling platform off the coast of Louisiana. Fireboats are struggling to put out flames triggered by the explosion on Tuesday night. CHRIS: When we left from the rig, we rode for probably a good four hours to another platform. The guys on that platform, they…

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