Bernie Madoff, largely known as the operator behind the largest Ponzi scheme in history, dies in prison aged 82.
According to an unnamed source in the Associated Press, Madoff, the man who pleaded guilty to devising the scheme, died from natural causes in a federal prison in North Carolina.
In 2020, Madoff’s lawyers attempted to get him released from prison in the middle of the global Covid-19 pandemic, but to no avail.
A one-time non-executive chairman of the NASDAQ stock exchange, Madoff was responsible for the largest fraud scheme in US history, once estimated to be worth $64.8bn. Since then, a court-appointed trustee has found more than $13bn of around $17.5bn that investors put into Madoff’s scheme.
What did Bernie Madoff do?
Bernie Madoff dies and leaves behind one the greatest financial scandals in history. In 1960, Bernard L. Madoff Investment Securities LLC was a penny stock trading company with $5,000 ($42,000 with inflation) under its belt.
In 1992, Madoff was described as “one of the masters of the off-exchange ‘third market’ and the bane of the New York Stock Exchange” by the Wall Street Journal.
It was very much a family business with his brother Peter as chief compliance officer, his niece Shana as compliance attorney, and his sons, Mark and Andrew, working in the trading section.
A respected and fairly exclusive firm, it became very popular. However, in 1999, financial analyst Harry Markopolos informed the SEC that he believed it was legally and mathematically impossible to achieve the returns and capital that Madoff was telling clients he was getting.
This came to a head on December 11 2008, in the middle of the global financial crisis, as federal authorities arrested Madoff.
On March 12 2009, Madoff pleaded guilty to 11 federal crimes and admitted to operating the largest private Ponzi scheme in history. Following that, he was sentenced to 150 years in prison with restitution of $170bn.
According to his original federal charges, Madoff said that his firm had liabilities of over $50bn and some estimated the fraud to be $64.8bn.
However, Markopolos estimated that at least $35bn of the money Madoff claimed to have stolen never existed and may have just been empty brags to clients.
Many were victims of the fraud scheme, including actors Kevin Bacon and John Malkovich, broadcaster Larry King, and Dreamworks executive Jeffrey Katzenberg.