ANYONE who has seen the BBC’s recent adaptation of Charles Dickens’ Little Dorrit will be familiar with the mob outside Bernie Madoff’s $7m (€5m) Upper East Side apartment. Add hats and canes and the scene could come straight out of Little Dorrit, in which an angry crowd assembles outside the house of Mr Merdle, the financier who was once “the master spirit of the age”. Merdle sent the city into panic after committing suicide just as he was about to be exposed as a fraud.

The parallels with Madoff, probably the biggest scammer of all time, are uncanny: “There never was, there never had been, there never again should be such a man as Mr Merdle. Nobody knew what he had done, but everybody knew him to be the greatest that had appeared,” writes Dickens.

Little Dorrit, lengthy in every other respect, is short on the details of Merdle’s schemes. But the details don’t seem to matter to his investors who are convinced he will make them filthy rich.

Madoff preyed on New York’s Jewish community. A former Nasdaq stock exchange chairman, for years he played hard to get as investors begged him to manage their money. Now, it appears, he has ruined them.

“Bred at first, like many epidemics, in the wickedness of men, and then disseminated in their ignorance,” writes Dickens, “these epidemics, after a period, get communicated to many sufferers who are neither ignorant nor wicked.”

Merdle may have been based in part on the financier John Sadleir. The Irish-born villain was found dead on Hampstead Heath in February 1856, a bottle of poison at his side. He was a pillar of the business community and a former junior Lord of the Treasury.

But after his death it was discovered he had doctored his books, prying wax seals from legitimate documents and pasting them onto forgeries and so “swindled the public to an amount little short of half a million” according to The Times, which noted that “as a forger he seems to have been remarkably successful”.

Little Dorrit had already begun its serialisation before Sadleir’s suicide but the author had already decided that the book needed a financial crisis. The calamity that followed Sadleir’s crimes provided rich material.

In her book Home Economics: Domestic Fraud in Victorian England, Rebecca Stern points out that after his death the press detailed the ruin of ordinary people: “a struggling farmer, residing near Annam-ult” and “a humble publican in Thomastown”.

As Stern points out, it was more than money that Sadleir took. Like his alleged modern-day counterpart, the damage he did to the public trust was enormous. “To invest is to extend credit, or faith, with the implicit understanding that the sum of one’s capital, energy and trust may be lost,” writes Stern.

Months after Sadleir’s death, rumours began to circulate that he was alive and had been spotted wandering the streets of New York. Had his suicide too been a fraud?

The rumours were untrue but his spirit, it seems, lives on in the Upper East Side.

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