Stand by your MadoffMarch 2, 2012: 5:00 AM ET
Catherine Hooper moved in with her boyfriend, Andrew Madoff, three days before his father confessed to the fraud that shook the world. She stuck around. Now Catherine and Andrew are building a business together.
FORTUNE -- Inside the Manhattan apartment of Catherine Hooper and Andrew Madoff, there is a spare bedroom containing items one might need in case disaster strikes. Titanium flashlights, solar battery chargers, and duct tape line one shelf. Pocket-size radiation detectors, potassium iodide tablets, and energy bars fill another. On a bed are anti-radiation suits. "We do not put these on our website," Hooper says as she unfolds a child-size suit with battery pack and air pump. The notion of a child coated with radioactive dust is too harrowing even for the doom-fearing customers of Black Umbrella, Hooper's emergency-preparedness company. She and Madoff are building the business off of "a fundamental awareness of how vulnerable we are," she says.
Yes, the resonance here is jolting, given the direction of Hooper's life. She was just another well-bred, social-climbing New Yorker with a good gig in the fashion industry when she moved in with her boyfriend, Andrew Madoff, in December 2008. That was three days before Bernie Madoff was arrested for operating the biggest Ponzi scheme in history. Hooper stayed around for the ensuing drama: When her intended father-in-law pleaded guilty and went to prison for life, she consoled Andrew, her fiancé. When Andrew's older brother, Mark -- his only sibling and his partner in the trading arm of their father's firm -- committed suicide exactly two years after Bernie's arrest, Hooper helped Andrew hone his own survival skills. "Resilient people are those who have a plan," Hooper says.
"Since everything happened" -- the phrase she and Andrew use to describe their lives post-scandal -- Hooper has become part of the Madoff family and even a manager of its public affairs. She encouraged Andrew -- who persuaded his mother, Ruth -- to speak publicly for the first time about the scandal last fall. If you watched them on CBS's 60 Minutes or NBC's Today, where Bernie's wife and son declared that they had no clue that the man they loved was a crook, you probably wondered, What is the truth? And who is the porcelain-skinned brunette standing by her man throughout the TV interrogations?
Hooper is, first of all, the CEO of Andrew Madoff's personal-renewal program. "Black Umbrella is my full-time job," he says proudly. He works 50 to 60 hours a week as director of operations at the company, which is 100% owned by Hooper. He doesn't take a salary; they agreed it wouldn't look right while claimants wait to receive pieces of their life savings that disappeared in the $65 billion Madoff scam. "A lot of people out there think he should never make a penny for the rest of his life and give up all he's earned since his bar mitzvah," says Hooper, 39, about her fiancé. It's not easy to feel sympathy for Andrew, 45, when he says, "I'm a Madoff victim too." But his statement, which he delivers with emotional coldness, is, by a certain measure, true.
While she works to rescue her boyfriend and his career, Hooper is also making a play on the zeitgeist: the notion that the world is less predictable and more dangerous than it used to be. "New York City is the third most likely major city, after Miami and New Orleans, to be devastated by a hurricane," says Hooper. Black Umbrella's clients pay $750 to $2,000 for services to help them survive hurricanes, floods, earthquakes, dirty bombs, even nuclear war.
Hooper launched Black Umbrella in 2009, and it's definitely not the next Facebook. She employs 11 people and generated less than $500,000 in 2011 revenue. But the business is growing. After she and Madoff found that customers wanted supplies, not just services, they began selling thermal clothing, bottled water, and all that gear in the spare bedroom -- and the average ticket multiplied. "I think emergency preparedness is in the same position today as fitness was before Jack LaLanne," says Hooper in all seriousness.
A girl can dream. Hooper grew up in tiny Glens Falls, N.Y., and was raised by a divorced mother who had her at age 20. Nikki DeCenzo did whatever it took -- operated a bookstore café, drove a Mister Softee ice cream truck, donned a hardhat and did construction -- to provide for Catherine. "You should never count on a man to take care of you," she told her daughter.
Catherine graduated from Bryn Mawr, married a currency trader named Tom Hooper, got bored by suburban life on Philadelphia's Main Line, divorced, and set her sights on owning a business. After Hurricane Katrina uprooted Hooper's friends in New Orleans, she started emergency planning for herself. "I discovered how difficult it was, and I recognized a business opportunity."
Black Umbrella was born, on paper, in 2005, but Hooper got distracted right away. She had moved to New York City, discovered a passion for fly-fishing, and taken a job at Urban Angler, an upscale fishing store in Manhattan's Flatiron district. Hooper ran the store's back end -- managed the inventory, oversaw the accounting -- and went on fly-fishing expeditions around the world. She wrote for Fish & Fly magazine and appeared on its cover in a bikini. She fell in love with the store's founder, appropriately named Jon Fisher; the couple had a daughter. Hooper loved Urban Angler so much that she bought a piece of it. Among its other well-heeled investors were former Treasury Secretary Robert Rubin and Andrew Madoff.
Madoff was smitten the moment he met Hooper. "Besides being quite beautiful," he says, "she knew everything about the business of fishing." But it wasn't love at first sight for her. "A financial lughead" is how she initially described Madoff to her friends. She saw Madoff as another arrogant, know-it-all Wall Streeter. Only after she learned personal details -- he studied piano, he had survived cancer, he had separated from his wife of 16 years and had two daughters -- did she start to fall for Bernie Madoff's son.
"Want some eggs?" Andrew asks as I park myself on a stool at the kitchen counter in the couple's Upper East Side apartment. It's 7:30 a.m., and Catherine and I have just finished a 6 a.m. spin class at Flywheel. Five-foot-one and barely 100 pounds, she was the fastest, hardest-pumping cyclist in the class. The couple's apartment is modest -- they bought their Formica dining-room table on Craigslist -- since his father's crimes could still bankrupt Andrew. Irving Picard, the court-appointed trustee working to compensate the Madoff victims, has sued the family for more than $226 million received from Madoff Securities over the years. Until those claims are settled, Andrew, who had earned $3 million annually in his heyday, is required to get the trustee's approval for any spending, beyond ordinary living expenses, over $500. So if Andrew and Catherine want to buy a new sofa, she pays.
Hooper, who sometimes calls Andrew "my husband," isn't legally part of the Madoff family. But she, too, faces financial problems stemming from the scandal. After splitting with Fisher and quitting Urban Angler, she started working at fashion house Christian Dior. (She and Andrew sold their Urban Angler stakes; they are owners of Abel Automatics, a high-end fishing-reel company.) Her Dior job was a mixture of consulting, event planning, and wearing fancy outfits to A-list parties around town. You can imagine the fuss when her fiancé's father was found out to be the world's biggest con man. She quit Christian Dior and dusted off the idea for Black Umbrella.
Today Hooper seems to enjoy, on some level, being a character in the Madoff disaster -- and surviving. Pulling up her color-coded Google calendar from December 2008, she tells me that early that month, an astrologer friend had warned her that something terrible was about to happen. Hooper typed DANGER! in capital letters on the Dec. 10 box on her calendar. That turned out to be the day when Bernie Madoff told Ruth and his two sons that his investment fund was "a giant Ponzi scheme." Arriving home to the apartment where he had just moved with Catherine, Andrew walked straight to the bedroom and lay on the bed for four hours before he told Hooper that he had just reported his father to the authorities. "I basically told her to leave," Madoff says, recalling the moment. "I said, 'Get as far away from me as possible.'
"She didn't blink," he says.
Hooper insists she didn't blink at the time -- but later she questioned her sanity in staying with Andrew. The psychiatrist she visited asked her, "Do you trust him? Do you believe him?" She recalls: "I told him, 'Absolutely, I do.' He told me, 'You're signing on for a lot of heartbreak. But if you can weather it, you're going to have a bond with someone that will be pretty incredible.'"
Only Andrew Madoff knows whether he is telling the truth that he didn't know that his father was a crook. Regardless, he says he takes comfort in his new gig at Black Umbrella. "The notion of being prepared for unexpected events is something I could relate to," he says, stating the obvious. "I love being involved in a business where we're helping people. That's not what you do on Wall Street."
As for Hooper, she got flak for accepting money to do a book about the Madoff family drama. Truth and Consequences: Life Inside the Madoff Family came out last fall. Hooper won't say how much money she received for helping author Laurie Sandell, giving her access to her calendar and diaries. "I have to sing for my supper," says Hooper, noting that she is supporting a 6-year-old daughter. The scandal turned out to be "a double-edged sword" for her business, she says. Publicity around the book, including the 60 Minutes segment, drew attention to Black Umbrella and attracted a few new customers. At the same time, she says, "I've gotten hate mail saying, 'I hope you burn in hell.'"
Besides running Black Umbrella, Hooper is involved in a group called Quantified Self. This is a collection of Type A's who schedule and measure everything they do. On her color-coded Google calendar, Hooper plots her exercise time (green), work (yellow), time with Andrew (orange), and time with friends (pink). She relies on Livestrong.com, cyclist Lance Armstrong's website, to track calories and the nutritional content of everything she eats.
Andrew Madoff's theory about his fiancé's extreme scheduling: "It comes from a desire for certainty and stability," he says. "It's a way of creating certainty." Madoff recalls that when he learned he had cancer -- a usually deadly type of lymphoma -- in 2003 and feared he would die at 35, he, too, "grasped for every measure of control." About Hooper, he adds: "We are totally simpatico."
Hooper and Madoff plan to marry as soon as the lawsuits are settled -- whenever that may be. Madoff has "no sense of the time frame," he says. Meanwhile, Hooper has plenty on her schedule and big dreams to fulfill. "You can't let someone else write your epitaph," she says.
This article is from the March 19, 2012 issue of Fortune.