Bernard Madoff leaves New York federal court on Tuesday, March 10, 2009.
Jin Lee | Bloomberg | Getty Images
Bernard Madoff, mastermind of the largest investment fraud in U.S. history, which scammed tens of thousands of clients for as much as $ 65 billion, has died, The Associated reported on Wednesday Press. He was 82 years old.
The TUSEN, citing unidentified sources, said he died of natural causes.
Madoff was serving a 150-year sentence at the Federal Prison Care Center in Butner, North Carolina, where he was being treated for what his lawyer called end-stage kidney disease.
He pleaded guilty in 2009 to a scheme that investigators said began in the early 1970s and defrauded as many as 37,000 people in 136 countries in four decades when Madoff was arrested on December 11, 2008 – after his two sons denounced him. Among the victims were famed director Steven Spielberg, actor Kevin Bacon, former New York Mets owner Fred Wilpon, Hall of Fame pitcher Sandy Koufax and Nobel Peace Prize winner Elie Weisel – and investors ordinary people, like Burt Ross, who lost $ 5 million in the scheme. .
Madoff insisted the fraud didn’t start until the early 1990s, when, he said, “the market stalled due to the onset of the recession and the Gulf War. “.
In a 2013 email to TUSEN from prison, Madoff claimed that the market disruption that triggered the Great Recession led to his scam.
“I thought it would only be a short-term trade that could be replenished once the market became receptive,” he wrote. “The rest is my tragic story of never being able to recover.”
In fact, investigators said, Madoff hasn’t executed a single transaction for his consulting clients for years. Rather than employing a so-called split-strike conversion strategy as he claimed, he simply deposited investor funds into a Chase bank account, paying new clients with funds from former clients – a system classic pyramid scheme – and providing its clients with a fake account. declaration. The investment “returns” shown on these statements – some $ 50 billion in all – were pure fiction.
The Bernard L. Madoff Investment Securities scandal has shaken investor confidence, already damaged by the financial crisis. And that has led to sweeping changes to the Securities and Exchange Commission, which has been missing fraud for years despite repeated warnings, including from independent investigator Harry Markopolos, who set out to analyze Madoff’s unlikely returns and declared them fraudulent as early as 2000.
A subsequent investigation by the agency’s Inspector General, H. David Kotz, found that rather than following clear evidence of fraud, SEC enforcement personnel decided to take the word of Madoff that his operation was legitimate.
“When Madoff provided evasive or contradictory answers to important questions in his testimony, they simply accepted his explanations as plausible,” Kotz wrote.
In June 2020, a judge rejected a request for humanitarian release, saying Madoff had committed “one of the most egregious financial crimes of all time” and that “many people are still suffering.”
Bernard Lawrence Madoff was born in Queens, New York, on April 29, 1938, son of Sylvia and Ralph Madoff, plumber turned stockbroker.
For over 50 years, Bernie Madoff was a household name on Wall Street, a great money manager who founded his own business at 22 and became non-executive chairman of the Nasdaq in 1990. He has been credited with helping develop some of the market systems and structures that moved the stock market beyond the trading floor and gave rise to modern electronic commerce.
But Madoff’s life fell apart in 2008, in the depths of the financial crisis.
Bernie Madoff leaves Manhattan Federal Court in New York, the United States, Monday, January 5, 2009.
Jin Lee | Bloomberg | Getty Images
Inundated with buyout requests from his clients, Madoff could no longer maintain the scam. On December 10, 2008, he confessed to his sons, Mark and Andrew, that the investment advisory business was a lie. Madoff had hoped to buy time to distribute hundreds of millions of dollars in bonuses to employees and then wind up the business. But Mark and Andrew, who were senior executives in the company’s business operation – which operated separately from the fraudulent advisory business – reportedly didn’t and alerted authorities there.
A day later, on December 11, 2008, the FBI raided its offices in the Lipstick Building on Third Avenue in Midtown Manhattan.
On March 12, 2009, Madoff pleaded guilty to 11 federal crimes and admitted to exploiting the largest private Ponzi scheme in history. He was sentenced three months later to the maximum sentence: 150 years in prison with a restitution of 170 billion dollars.
In court, he insisted it was his whole idea – that his family knew nothing – even though his wife, Ruth, had once kept the books, his sons were senior officers and his younger brother, Peter, was the chief compliance officer.
Andrew Madoff is seated between his girlfriend, Catherine Hooper, and his mother, Ruth Madoff, when he appeared on NBC’s “TODAY” in 2011.
Peter Kramer | NBC NewsWire | Getty Images
But a trustee appointed to hunt down funds for investors did not buy it. Irving H. Picard has sued dozens of people and entities, including members of Madoff’s family, alleging they either knew about the fraud or turned a blind eye, while raising millions of dollars into benefits.
For his eldest son Mark, the suspicion was too strong. In 2010, two years to the day after his father’s arrest, he became the third fraud-related suicide. He was 46 years old. Four years later, Andrew died of lymphoma at age 48.
Picard eventually made deals with the estates of the sons and with Ruth Madoff, who continued to deny any knowledge of the fraud and is said to be living modestly in Connecticut.
In the end, in addition to Madoff, more than a dozen individuals, including Peter Madoff, were convicted of federal crimes, but none of the others were accused of knowing about the fraud. JPMorgan Chase, Madoff’s main bank, paid the U.S. government and Madoff victims $ 2.6 billion in 2014 to address allegations that it was not maintaining adequate controls. After Chase instituted unspecified reforms, prosecutors dropped the lawsuits against the bank.
Forensic pathologists remove the body of Mark Madoff from his New York apartment on December 11, 2010.
Emmanuel Dunnand | TUSEN | Getty Images
By mid-2020, Picard had recouped more than $ 14 billion for Madoff’s clients, or about 75 cents for every dollar in principal invested, a figure normally unknown in a Ponzi scheme. From prison, Madoff has repeatedly tried to take credit for the recoveries, saying he pressured his biggest investors to return some of their money.
“These parties were well aware of the incriminating evidence I had regarding their complicit activity, and wisely proposed settlements,” he wrote in 2013.
But Picard and federal investigators said Madoff never provided them with significant help. The remorse he claimed in every message was also suspect. Upon his conviction in 2009, Madoff turned to his victims. “I’m sorry,” he said. “I know it’s not helping you.”
That was not the case.
Cheers erupted when Federal Judge Denny Chin ordered the maximum sentence for “extraordinarily bad” crimes.
Ross, a former mayor of Fort Lee, New Jersey, who testified at the hearing, told Chin, “Engage Madoff in prison for the rest of his life. May Satan develop a fourth mouth where Madoff can spend the rest of his life. eternity. “