Bernie Madoff, the financier who pleaded guilty to orchestrating the largest Ponzi scheme in history, died Wednesday in a federal prison, the Federal Bureau of Prisons confirmed to CBS News. Madoff, 82, died at the Federal Medical Center in Butner, North Carolina, the office said in a statement.
The office said the cause of Madoff’s death would be determined by a coroner.
Last year, Madoff’s lawyers filed lawsuits to try to get him out of jail into the COVID-19 pandemic, saying he suffered from end-stage kidney disease and other chronic medical conditions. The request was rejected.
Madoff has acknowledged that he has invested thousands of clients in billions of dollars in investments over the decades.
A court-appointed attorney has recovered more than $ 13 billion from about $ 17.5 billion that investors have put into Madoff’s business. At the time of Madoff’s arrest, false account statements told customers that they had holdings worth $ 60 billion.
For decades, Madoff enjoyed an image as a self-made financial guru, whose touch Midas defied market fluctuations. Former chairman of the Nasdaq stock market, he has attracted a devoted legion of investment clients – from Florida retirees to celebrities such as famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax.
But his investment advisory business was exposed in 2008 as a multi-billion dollar Ponzi scheme that destroyed people’s fortunes and destroyed charities and foundations. He became so ugly that he had to wear a bulletproof vest in court.
Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was “deeply ill and ashamed.”
Mario Tama / Getty Images
After several months of life under house arrest at his $ 7 million Manhattan penthouse apartment, he was handcuffed to jail for clapping by angry investors in the courtroom.
“He stole from the rich. He stole from the poor. He stole from the middle. He had no values,” former investor Tom Fitzmaurice told the sentencing judge. “He cheated his victims with their money so that he and his wife … could live a luxurious life beyond faith.”
U.S. District Judge Denny Chin did not show mercy, sentencing Madoff to a maximum of 150 years in prison.
“The message here is that Mr Madoff’s crimes were extraordinarily bad and that this kind of irresponsible manipulation of the system is not just a bloodless financial crime that takes place only on paper, but instead … one that takes a toll. amazing human, “Chin said.
The Madoffs also suffered a severe financial blow: a judge issued a $ 171 billion confiscation order in June 2009, depriving Madoff of all his personal property, including real estate, investment and $ 80 million. millions of dollars in assets that his wife, Ruth, claimed to be hers. The order left him $ 2.5 million.
The scandal also had a personal effect on the family: one of his sons, Mark, committed suicide on the second anniversary of his father’s arrest in 2010. And Madoff’s brother, Peter, who helped run the business, was sentenced to 10 years in prison in 2012, despite claims to be in the dark about his brother’s misdeeds.
Madoff’s other son, Andrew, died of cancer at the age of 48. Ruth is still alive.
Madoff was sent to do what was a life sentence at the Butner Federal Correctional Complex, about 45 miles northwest of Raleigh, North Carolina. A federal prison website listed the probable date of his release on November 11, 2139.
Madoff was born in 1938 in a middle-class Jewish neighborhood in Queens. In the financial world, the story of his growth on the spot – how he left for Wall Street with Peter in 1960, with a few thousand dollars saved from lifeguard work and the installation of sprinklers – has become a legend.
“There were two kids fighting in Queens. They worked hard,” said Thomas Morling, who worked closely with the Madoff brothers in the mid-1980s to create and operate computers that made their company a reliable leader in transactions. off-floor.
“When Peter or Bernie said something they were going to do, their word was their connection,” Morling said in a 2008 interview.
In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a Manhattan building. There, together with his brother and later with two sons, he ran a legitimate business as intermediaries between buyers and sellers of shares.
Madoff raised his profile using his expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission. But what the agency never found out was that behind the scenes, in a separate, locked office, Madoff was secretly spinning a ghostly cloth using cash from new investors to pay profits to the old ones.
Authorities say at least $ 13 billion has been invested with Madoff over the years. An old IBM computer has released monthly snippets showing steady double-digit returns, even during market recessions. At the end of 2008, statements claimed that investors’ accounts totaled $ 65 billion.
The ugly truth: securities have never been bought or sold. Madoff’s chief financial officer, Frank DiPascali, said in a 2009 guilty plea that the statements detailing the trades were “all false.”
His clients, many Jews like Madoff and Jewish charities, said they did not know. Among them were the Nobel Peace Prize winner and the Holocaust survivor. Elie Wiesel, who remembered meeting Madoff years earlier at a dinner where they talked about Jewish history, education, and philosophy — not about money.
Madoff “made a very good impression,” Wiesel said in a 2009 discussion of the scandal. Wiesel admitted that he bought “a myth that he created around him that everything was so special, so unique, that it had to be kept secret.”
Like many of his clients, Madoff and his wife enjoyed a generous lifestyle. They had a $ 7 million apartment in Manhattan, a $ 11 million property in Palm Beach, Florida, and a $ 4 million house on the top of Long Island. There was another house in the south of France, private jets and a yacht.
It all collapsed in the winter of 2008, with a dramatic confession at Madoff’s 12th-floor apartment on the Upper East Side. In a meeting with his sons, he confessed that his business was “just a big lie.”
After the meeting, a family lawyer contacted regulators, who alerted federal prosecutors and the FBI. Madoff was in a bathrobe when two FBI agents arrived at his door unannounced one December morning. He invited them to enter, then confessed after being asked “if there is an innocent explanation”, it is said in a criminal complaint.
Madoff replied, “There is no innocent explanation.”
As he did from the beginning, Madoff insisted in his plea that he be acting alone – something the FBI never believed. As agents searched records for a larger conspiracy and cultivated DiPascali as a cooperator, the scandal turned Madoff into a pariah, evaporated his fortunes, wiped out charities, and apparently pushed some investors to death. by suicide.
An administrator has been appointed to recover the funds – sometimes through legal action from hedge funds and other large investors who have come forward – and to share these revenues with the victims. The search for Madoff’s assets “has unearthed a maze of international funds, institutions and interdependent entities of almost unparalleled complexity and breadth,” administrator Irving Picard said in a 2009 report.
The report said the manager located assets and businesses of “interest” in 11 locations: the United Kingdom, Ireland, France, Luxembourg, Switzerland, Spain, Gibraltar, Bermuda, the British Virgin Islands, the Cayman Islands, the Bahamas. More than 15,400 lawsuits have been filed against Madoff.
When Madoff was convicted in June 2009, former angry customers demanded the maximum sentence. Madoff himself spoke in a monotone for about 10 minutes. At various times, he referred to his monumental fraud as a “problem”, a “misjudgment” and a “tragic mistake”.
He claimed that he and his wife were tortured, saying that “she cries alone to sleep every night, knowing all the pain and suffering I have caused.”
“That’s what I live for,” he said.
Later, Ruth Madoff – often the target of the contempt of victims of her husband’s arrest – broke her silence the same day by issuing a statement claiming that she too had been misled by her high school sweetheart.
“I’m embarrassed and ashamed,” she said. “Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man I have known for all these years.”
About a dozen Madoff employees and associates have been charged in the federal case. Five were tried at the end of 2013 and followed DiPascali, taking the witness as the government’s star witness.
DiPascali told jurors that just before the scheme was exposed, Madoff called him to his office.
“He had been looking out the window all day,” DiPascali said. “He turned to me and said, ‘I’m at the end of my rope … Don’t you understand? It’s all hell.’
Eventually, that fraud brought a new meaning to the “Ponzi scheme,” named after Charles Ponzi, who was convicted of mail fraud after giving thousands of people for just $ 10 million between 1919 and 1920.
“Charles Ponzi is now a footnote,” said Anthony Sabino, a white-collar defense attorney. – Now there are Madoff schemes.