Bernard Madoff, the mastermind of the largest investment fraud in US history, which ripped off tens of thousands of clients worth a whopping $ 65 billion, died Wednesday. He was 82.
His death at the Federal Medical Center in Butner, North Carolina was confirmed by the federal Bureau of Prisons.
Madoff apparently died of natural causes, the AP previously reported, citing an unidentified person familiar with the case. He would have turned 83 on April 29.
Madoff served a 150-year sentence in prison, where he had been treated for what his lawyer called end-stage kidney disease.
He pleaded guilty to a plan in 2009 that researchers said began in the early 1970s and cheated as many as 37,000 people in 136 countries in 40 years by the time Madoff was arrested on December 11, 2008 – after his two sons had turned him in. Victims included 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 regular investors, like Burt Ross, who donated $ 5 million lost in the plan.
Madoff insisted that the fraud did not start until the early 1990s, when, he said, “the market came to a standstill as a result of the outbreak of the recession and the Gulf War.”
In a 2013 email to CNBC from prison, Madoff claimed that the breakthrough in the marketplace that started the Great Recession led to his scam.
“I thought this was only going to be a short-term trade that could be made up once the market became receptive,” he wrote. “The rest is my tragic history of never being able to recover.”
According to researchers, Madoff has not executed a single transaction for his advisory clients for years. Instead of using a so-called split-strike conversion strategy, as he claimed, he simply deposited investors’ money into a Chase bank account, paying off new customers with money from previous customers – a classic pyramid scheme – and his customers a forged account worried. statement. The “return” of the investment on those statements – some $ 50 billion in all – was pure fiction.
The Bernard L. Madoff Investment Securities scandal has shattered investor confidence, already damaged by the financial crisis. And it led to sweeping changes at the Securities and Exchange Commission, which missed the fraud for years despite repeated warnings, including from independent researcher Harry Markopolos, who wanted to analyze Madoff’s unlikely returns and declared them fraudulent as early as 2000.
A later investigation by the inspector general of the agency, H. David Kotz, found that instead of following up on clear evidence of fraud, SEC enforcers decided to believe Madoff’s word that his operation was legitimate.
“When Madoff gave evasive or contradictory answers to important questions in the testimony, they simply accepted his statements as plausible,” Kotz wrote.
Last June, a judge rejected a request for compassionate release, saying that Madoff had committed “one of the most blatant 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, to Sylvia and Ralph Madoff, a plumber turned stockbroker.
Bernie Madoff was famous on Wall Street for over 50 years, a big money executive who founded his own company at the age of 22 and became a non-executive chairman of the Nasdaq in 1990. He was credited with helping develop some of the systems and market structures that moved the stock market beyond the trading floor and gave rise to modern, electronic trading.
But Madoff’s life collapsed in 2008, during the depths of the financial crisis.
Bernie Madoff is leaving Manhattan Federal Court in New York, USA, on Monday, January 5, 2009.
Jin Lee | Bloomberg | Getty images
Inundated with buyback requests from his customers, Madoff could no longer keep the scam going. On December 10, 2008, he confessed to his sons, Mark and Andrew, that the investment advisory business was all a lie. Madoff had hoped to buy some time to distribute hundreds of millions of dollars in bonuses to employees and then liquidate the company. But Mark and Andrew, who were senior managers in the company’s trading activities – operating independently of the fraudulent advisory activities – would have none of it and warned the authorities on the ground.
A day later, on December 11, 2008, the FBI raided his office 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. Three months later, he was sentenced to the maximum sentence: 150 years in prison with restitution of $ 170 billion.
In court, he insisted it was all his 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 chief compliance officer.
Andrew Madoff sits between his girlfriend, Catherine Hooper, and his mother, Ruth Madoff, as he appeared on NBC’s “TODAY” show in 2011.
Peter Kramer | NBC NewsWire | Getty images
But a trustee appointed to track down funds for investors didn’t buy it. Irving H. Picard sued dozens of people and entities, including Madoff’s relatives, who claimed they knew about the fraud or turned a blind eye, while retaining millions of dollars in benefits.
The suspicion was too great for eldest son Mark. In 2010, two years after his father’s arrest, he became the third suicide in connection with the fraud. He was 46. Four years later, Andrew died of lymphoma at the age of 48.
Picard eventually reached settlements with the sons’ estates, and with Ruth Madoff, who continued to deny any knowledge of the fraud and reportedly lives 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 charged with knowing about the fraud. JPMorgan Chase, Madoff’s home bank, paid $ 2.6 billion to the U.S. government and Madoff’s victims in 2014 to settle allegations that it was not enforcing proper scrutiny. After Chase pushed through some unspecified reforms, prosecutors dropped charges against the bank.
Medical examiners remove Mark Madoff’s body from his New York apartment on December 11, 2010.
Emmanuel Dunnand | AFP | Getty images
By mid-2020, Picard had recovered more than $ 14 billion for Madoff’s clients, or about 75 cents for every dollar invested in principal, a figure normally unheard of in a Ponzi plan. From prison, Madoff repeatedly tried to take credit for the recoveries, claiming that he pressured his largest investors to return some of their money.
“Those parties were well aware of the incriminating evidence I had of their complicit activity and wisely came up with settlements,” he wrote in 2013.
But Picard and federal investigators said Madoff never provided them with any meaningful help. The remorse he claimed in every message was also suspicious. In his 2009 conviction, Madoff turned to his victims. “I’m sorry,” he said. “I know that won’t help you.”
It didn’t.
Cheers erupted as federal judge Denny Chin ordered the maximum penalty for “extremely bad” crimes.
Ross, a former mayor of Fort Lee, New Jersey, who testified at the hearing, told Chin, “Put Madoff in prison for the rest of his life. May Satan grow a fourth mouth where Madoff can spend the rest of eternity. . “