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Bernie Madoff 2021 . who ran the world39;s largest Ponzi scheme. is dead

Madoff, Ponzi Scheme

Bernie Madoff 2021 . who ran the world39;s largest Ponzi scheme. is dead

Bernie Madoff Bernie Madoff , is world's who dead the scheme, Ponzi largest ran

Wed, 14 Apr 2021 07:00:00 -0700

Madoff, who had been on dialysis and in a wheel chair, died a "broken man," his attorney told ABC News on Wednesday

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"His health just continued to deteriorate 

The once-celebrated figure on Wall Street was sentenced to 150 years in prison.

Bernie Madoff, the disgraced former financier who ran the largest Ponzi scheme in history, has died, sources confirmed to ABC News.

The 82-year-old died of natural causes while being housed at the Federal Medical Center in Butner, North Carolina, sources said.

Madoff, who had been on dialysis and in a wheel chair, died a “broken man,” his attorney told ABC News on Wednesday.

“His health just continued to deteriorate over the past several months,” Madoff’s attorney Brandon Sample told ABC News.

“He had been in a special care unit, almost like hospice, for some time.”

He died 12 years into a 150-year prison sentence.

Madoff earned global notoriety by defrauding thousands of investors, to the tune of nearly $65 billion, using a Ponzi scheme that unraveled shortly after the Great Recession of 2008.

“It’s the end of a life that represented a remarkable breach of an astounding number of people’s trust,” said Randall Jackson, who was part of the team of federal prosecutors that prosecuted some of Madoff’s enablers and accomplices and who’s now a partner in private practice at Willkie Farr & Gallagher LLP.

“During the course of the entirety of the Madoff Securities prosecution we were certainly aware and really in awe of the depth of the deception and the depth of the harm that was orchestrated,” Jackson told ABC News on Wednesday.

“It’s really a sad reflection of what people can do in terms of a breach of trust in the business.”

Madoff’s lavish lifestyle and dramatic downfall were the subject of a 2017 HBO film called “The Wizard of Lies,” based on a book of the same title by New York Times financial journalist Diana Henriques.

Madoff was played by Robert De Niro.

Madoff also was the subject of a 2016 ABC miniseries, “Madoff,” starring Richard Dreyfuss.

Prior to the economic crash of 2008, Madoff was a celebrated figure on Wall Street as the head of the what appeared to be the wildly successful Bernard L.

Madoff Investment Securities firm.

Madoff founded the firm as a penny stock trader in 1960.

Prior to his downfall, Madoff also briefly served as chairman of the NASDAQ.

Madoff married his high school sweetheart, Ruth Madoff, in 1959.

The couple had two sons and owned lavish properties, including a Manhattan penthouse, a Palm Beach waterfront home and a Hamptons beachfront home.

Madoff’s fall from grace was swift: He was arrested in December 2008 after his family contacted investigators when he confessed to his sons that his business empire was a sham.

Bernie Madoff and Ruth Madoff attempted suicide on Christmas Eve 2008.

Ruth Madoff told CBS news in 2011 that she and her husband downed pills after their sons had contacted federal authorities, but ultimately their attempt was unsuccessful and “we woke up the next day.”

His crimes were remembered for upending the lives of thousands, heightening the agony associated with a brutal economic downturn.

Many victims said they lost everything.

One investor, who lost $1.4 billion, died by suicide in December 2008.

In March 2009, Bernie pleaded guilty to 11 federal felonies, admitting his conduct “was wrong, indeed criminal,” and in June 2009 he received a maximum sentence of 150 years.

“When I began the Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from this scheme,” Madoff told the judge at his plea hearing.

“However, this proved difficult, and ultimately impossible, and as the years went by I realized that my arrest and this day would eventually come.”

Madoff told investors that he developed a unique investment strategy, which he explained to the judge, “to falsely give the appearance to clients that I had achieved the results that I believed they expected.”

The judge, Denny Chin, told the courtroom at the time the sentencing was symbolic for a crime that displayed “extraordinary evil” and “took a staggering human toll.”

In court, Madoff said that when he started the scam, he thought he would be able to “work my way out.” He maintained that he acted alone, adding, “How do you excuse lying to brother and sons? How do you excuse lying and deceiving a wife who stood by you for 50 years and still stands by you? There is no excuse for that, and I don’t ask for forgiveness.”

Finally, he turned to face some of his victims in court.

“I’m sorry,” he said.

When Chin read the sentence, the courtroom erupted in applause.

As Madoff went to prison, tragedy soon overtook his family.

In December 2010, around the two-year anniversary of Madoff’s arrest, his son, Mark Madoff, hanged himself in his New York City apartment, The New York Times reported at the time.

Mark Madoff also was under investigation, though his father maintained that he acted alone in running the Ponzi scheme.

Bernie Madoff’s only other son, Andrew Madoff, died of cancer in 2014.

In the decade since Madoff’s arrest, Justice Department officials have worked to create a fund for his victims and have distributed more than $2.7 billion to nearly 38,000 defrauded investors as of April 2020.

The Madoff Victims Fund has received over 65,000 requests for compensation from investors in 136 countries.

DOJ officials have pledged return over $4 billion to victims via the MVF, which was amalgamated in part from civil and criminal forfeitures sought against Madoff and his co-conspirators.

After serving more than a decade behind bars, in February 2020 Bernie Madoff’s lawyers sought a “compassionate release,” saying he suffered from terminal kidney failure and other chronic conditions.

At the time, he told the Washington Post he wanted to repair his relationship with his grandchildren before he died.

“I’ve served 11 years already,” he said.

“And, quite frankly, I’ve suffered through it.”

His plea was denied.

“The pain experienced by the victims of Mr.

Madoff’s fraud is not diminished by his death, nor is our work on behalf of his victims finished,” Irving Picard, the trustee liquidating Madoff’s firm, said in a statement Wednesday.

“My legal team and I are committed to continuing to identify and recover Mr.

Madoff’s stolen funds and return them to their rightful owners.”

Lisa Baroni, one of the prosecutors who sent Bernie Madoff to prison, recalled Madoff’s sentencing as her “most memorable day in a decade as a prosecutor.”

“I can’t imagine we will see a securities fraud that is as brazen as Madoff’s and that lasted as many decades — we were able to prove that it began in the 1970s and ended with his arrest in 2008,” Baroni added.

She continued: “No one expected Madoff to serve his full 150-year sentence, but it was meant to symbolize his greed and malevolence.”

If you are struggling with thoughts of suicide or worried about a friend or loved one, help is available.

Call the National Suicide Prevention Lifeline at 1-800-273-8255 [TALK] for free confidential emotional support 24 hours a day, 7 days a week.

Even if it feels like it, you are not alone.

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Bernie Madoff Bernie Madoff

Wed, 14 Apr 2021 07:00:00 -0700

His enormous fraud left behind a devastating human toll and paper losses totaling $64

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8 billion

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His enormous fraud left behind a devastating human toll and paper losses totaling $64.8 billion.

Henriques

Bernard L.

Madoff, the one-time senior statesman of Wall Street who in 2008 became the human face of an era of financial misdeeds and missteps for running the largest and possibly most devastating Ponzi scheme in financial history, died on Wednesday in a federal prison hospital in Butner, N.C.

He was 82.

The Federal Bureau of Prisons confirmed the death, at the Federal Medical Center, part of the Butner Federal Correctional Complex.

Mr.

Madoff, who was serving a 150-year prison sentence, had asked for early release in February 2020, saying in a court filing that he had less than 18 months to live after entering the final stages of kidney disease and that he had been admitted to palliative care.

In phone interviews with The Washington Post at the time, Mr.

Madoff expressed remorse for his misdeeds, saying he had “made a terrible mistake.”

“I’m terminally ill,” he said.

“There’s no cure for my type of disease.

So, you know, I’ve served.

I’ve served 11 years already, and, quite frankly, I’ve suffered through it.”

Mr.

Madoff’s enormous fraud began among friends, relatives and country club acquaintances in Manhattan and on Long Island — a population that shared his professed interest in Jewish philanthropy — but it ultimately grew to encompass major charities like Hadassah, universities like Tufts and Yeshiva, institutional investors and wealthy families in Europe, Latin America and Asia.

Buttressed by elaborate account statements and a deep reservoir of trust from his investors and regulators, Mr.

Madoff steered his fraud scheme safely through a severe recession in the early 1990s, a global financial crisis in 1998 and the anxious aftermath of the terrorist attacks in September 2001.

But the financial meltdown that began in the mortgage market in mid-2007 and reached a climax with the failure of Lehman Brothers in September 2008 was his undoing.

Hedge funds and other institutional investors, pressured by demands from their own clients, began to take hundreds of millions of dollars from their Madoff accounts.

By December 2008, more than $12 billion had been withdrawn, and little fresh cash was coming in to cover redemptions.

Faced with ruin, Mr.

Madoff confessed to his two sons that his supposedly profitable money-management operation was actually “one big lie.” They reported his confession to law enforcement, and the next day, Dec.

11, 2008, he was arrested at his Manhattan penthouse.

The victims of his fraud, some of whom went overnight from comfortable wealth to frantic desperation, numbered in the thousands and were scattered from Palm Beach, Fla., to the Persian Gulf.

The paper losses totaled $64.8 billion, including the fictional profits he had credited to customer accounts over at least two decades.

More than money was lost.

At least two people, in despair over their losses, died by suicide.

A major Madoff investor suffered a fatal heart attack after months of contentious litigation over his role in the scheme.

Some investors lost their homes.

Others lost the trust and friendship of relatives and friends they had inadvertently steered into harm’s way.

Mr.

Madoff was not spared in these tragic aftershocks.

His older son, Mark, died by suicide in his Manhattan apartment early on the morning of Dec.

11, 2010, the second anniversary of his father’s arrest.

He was characterized by his lawyer, Martin Flumenbaum, as “an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo.” One of Mark Madoff’s last messages before his death was to Mr.

Flumenbaum: “Nobody wants to believe the truth.

Please take care of my family.”

In June 2012, Bernard Madoff’s brother, Peter, a lawyer by training, pleaded guilty to federal tax and securities fraud charges related to his role as the chief compliance officer at his older brother’s firm, but he was not accused of knowingly participating in the Ponzi scheme.

In December 2012, Peter Madoff forfeited all his personal property to the government to compensate his brother’s victims; he was sentenced to a 10-year prison term.

And on Sept.

3, 2014, Mr.

Madoff’s younger son, Andrew, died of cancer at the age of 48.

He had blamed the stress of the scandal for the return of the cancer he had fought off in 2003.

Besides the human toll, professional reputations were destroyed.

More than a dozen prominent hedge funds and money managers, including J.

Ezra Merkin and the Fairfield Greenwich Group, had to admit that they had forwarded their clients’ money to Mr.

Madoff without detecting that he was running a fraud.

Swiss private bankers, global commercial banks and major accounting firms were dragged into court by clients who had relied on them to monitor their Madoff investments.

The Securities Investor Protection Corporation, the industry-financed organization set up in 1970 to provide limited protection to brokerage customers, spent more on the Madoff bankruptcy than on all its earlier liquidations combined — and was fiercely attacked by victims, who felt they had been wrongly denied compensation.

And for the Securities and Exchange Commission, which unsuccessfully investigated more than a half-dozen credible tips about Mr.

Madoff’s fraud scheme since at least 1992, it was the most humiliating failure in its 75-year history.

Bernard Lawrence Madoff was born in Brooklyn on April 29, 1938, to Ralph and Sylvia (Muntner) Madoff, both the children of working-class immigrants from Eastern Europe.

He grew up in Laurelton, at the southern edge of Queens near what is now John F.

Kennedy International Airport.

It was in Laurelton that he met and, in 1959, married Ruth Alpern, whose father had a small but thriving accounting practice in Manhattan.

Before graduating from Hofstra University on Long Island in 1960, Mr.

Madoff had already registered his own brokerage firm with the S.E.C., Bernard L.

Madoff Investment Securities, which he founded partly with money saved from summer lifeguard duty and a lawn-sprinkler installation business that he had run in school.

After an uninspired year in law school, he devoted himself full-time to the business of trading over-the-counter stocks — an enormous market in an era when only the most seasoned American companies could win listings on the New York Stock Exchange and the smaller American Stock Exchange.

His business prospered in the boom years of the 1960s and weathered the downturns of the ’70s by catering to the expanding world of institutional investors, who were rapidly replacing retail investors as the dominant players on Wall Street.

After his brother, Peter, joined the Madoff firm in 1970, it began to build a reputation for harnessing cutting-edge computer technology to the traditional business of trading securities.

It was one of the early participants in the fledgling electronic market that ultimately became the modern Nasdaq, and was involved as an investor in several other platforms for computerized trading

Mr.

Madoff’s market leadership and his firm’s willingness to challenge Wall Street traditions made him a trusted adviser as federal regulators struggled to modernize the nation’s marketplace without jeopardizing its international stature.

By age 70, he had become an influential spokesman for the traders, the hidden gears of the marketplace.

But it later became clear that he had started engaging in questionable practices soon after he arrived on Wall Street.

By the early 1960s, Mr.

Madoff had started accepting money raised for him by his father-in-law, Saul Alpern, and two young accountants who worked in the Alpern firm.

At some point the two accountants began to sustain this flow of Madoff-bound cash through the issuance of notes that they failed to register with the S.E.C., as required by law.

The commission shut down that hidden money-management business in 1992, after Mr.

Madoff had received almost $500 million from the accountants’ clients, who believed he was investing it for them.

Regulators filed civil charges against the two accountants, forcing them to shut down their note-sale operation, but they failed to follow the money beyond Mr.

Madoff’s doorstep.

And on the S.E.C.’s order, all the money was returned to customers — with cash that Mr.

Madoff had taken from one of his largest investor’s accounts, according to testimony in federal court cases related to the fraud.

The regulators later found, however, that most of the money had almost immediately been returned to Mr.

Madoff by customers, who had become accustomed to a steady, reliable rate of return on their supposedly conservative Madoff accounts.

By then, hedge funds, pension plans and university endowments were entrusting hundreds of millions of dollars to Mr.

Madoff — despite a business operation that was cloaked in secrecy, account statements that were suspiciously antiquated and independent audits that were signed by a one-man firm in a suburban storefront office.

Financial scholars later theorized that Mr.

Madoff’s Ponzi scheme lasted so long because it had appealed more to his clients’ fears than to their greed: He promised them consistency in an increasingly volatile market, not eye-popping returns.

And he always delivered, never failing to honor a redemption request, and never falling short of the profits he had forecast.

By the 1990s, a cottage industry of hedge funds and private partnerships had grown up to serve as supposedly exclusive portals through which investors could benefit from Mr.

Madoff’s investment genius.

These funds collected billions of dollars that he used to pay promised profits to his early clients and cover withdrawals when necessary.

Meanwhile, the profits of his legitimate business — which at one time was one of the largest participants in the Nasdaq market — were being squeezed by the same technological advances he had helped bring about.

By 2005, prosecutors later said, he was subsidizing his Wall Street firm with money siphoned from his fraud victims.

But there was no sign of distress in the Madoff family lifestyle.

While not conspicuously ostentatious by Wall Street standards, the Madoffs lived well.

Besides a duplex penthouse on the Upper East Side of Manhattan, they owned a handsome beach house on Long Island, a vintage mansion in Palm Beach and an apartment near the Mediterranean in the south of France; several large powerboats; and a share in a corporate jet.

They were respected philanthropists as well, contributing to cancer research and making major gifts to Yeshiva University, where Mr.

Madoff was a trustee and the chairman of the Sy Syms School of Business.

He had also served on the boards of several Wall Street organizations, including the National Association of Securities Dealers, now known as Finra.

Never an effusive man, Mr.

Madoff became even more impassive as he and his family were caught up in the media storm that followed his arrest.

One tabloid labeled him the most hated man in New York City.

On at least one excursion to the courthouse before his guilty plea, a security consultant insisted that he wear a bulletproof vest.

Before being sentenced on June 29, 2009, in a Manhattan federal courtroom packed with spectators and victims, he read from a statement he had prepared with his defense lawyer, Ira Lee Sorkin.

“I am responsible for a great deal of suffering and pain, I understand that,” he told the court.

“I live in a tormented state now, knowing of all the pain and suffering that I have created.

I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren.”

Mr.

Madoff is survived by his wife, Ruth; his brother, Peter; his sister, Sondra M.

Wiener; and several grandchildren.

He leaves nothing of his former wealth behind.

As part of its criminal case, the government sought more than $170 billion in forfeited assets, a figure that apparently includes all the money that moved through Madoff bank accounts — for whatever purpose — during the years of the fraud.

Both Mr.

Madoff’s lawyers and the court-appointed trustee liquidating his firm said that the forfeiture amount included money flowing into the legitimate business operations of the firm as well as the billions paid out to investors as part of the Ponzi scheme.

The actual cash losses from his fraud, not counting fictional profits, were most recently estimated at between $17 billion and $20 billion — one of the largest financial frauds on record, and certainly the largest Ponzi scheme ever.

Through the bankruptcy process, some victims were able to recover all or part of the cash principal they invested with Mr.

Madoff.

Irving Picard, the court appointed trustee who has spent the last decade trying to recoup most of the money for Mr.

Madoff’s investors, has, to date, recovered $14.4 billion from lawsuits and settlements — roughly covering all the money investors gave to Mr.

Madoff.

The recovered sums, of course, do not make up for the billions that investors thought they had made over the years investing with him.

On July 14, 2009, Mr.

Madoff began serving his 150-year sentence in a medium-security facility at the Butner correctional complex, about 45 minutes northwest of Raleigh, N.C.

The victims who attended his sentencing in New York had insisted that he should pay for the devastation he had inflicted on those who had trusted him by spending the rest of his life behind bars — and he did.

Maria Cramer and Matthew Goldstein contributed reporting.

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– April 14, 2021
Madoff, Ponzi Scheme