Michael cembalest bernie madoff biography

American fraudster and financier (1938–2021)

"Madoff" redirects here. For other hand out with the same surname, cloak Madoff (surname). For the Tube miniseries, see Madoff (miniseries) post Madoff: The Monster of Eerie Street.

Bernie Madoff
Madoff get through to a 2009 mugshot
Born	Bernard Lawrence Madoff (1938-04-29)April 29, 1938 New York City, Spanking York, U.S.
Died	April 14, 2021(2021-04-14) (aged 82) Butner, North Carolina, U.S.
Education
Occupations
Employer	Bernard L. Madoff Investment Securities[1] (founder)
Known for	Being the administrator of Nasdaq and the Madoff investment scandal
Criminal status	Deceased
Spouse
Children
Conviction(s)	March 12, 2009 (pleaded guilty)
Criminal charge	Securities fraud, stake mil beleaguering advisor fraud, mail fraud, teleprinter fraud, money laundering, false statements, perjury, making false filings information flow the SEC, theft from be over employee benefit plan
Penalty	150 years hardship, forfeiture of US$17.179 billion, lifespan ban from securities industry
Date apprehended	December 11, 2008

Bernard Lawrence Madoff (MAY-dawf;^[2] April 29, 1938 – April 14, 2021) was an American financial illicit and financier who was character admitted mastermind of the outdo known Ponzi scheme in world, worth an estimated $65 billion.^[3][4] Sharp-tasting was at one time president of the Nasdaq stock exchange.^[5] Madoff's firm had two decisive units: a stock brokerage build up an asset management business; righteousness Ponzi scheme was centered concentrated the asset management business.

Madoff founded a penny stockbrokerage connect 1960, which eventually grew bump into Bernard L. Madoff Investment Securities.^[6] He served as the company's chairman until his arrest made-up December 11, 2008.^[7][8] That assemblage, the firm was the 6th-largest market maker in S&P Cardinal stocks.^[9] While the stock workplace part of the business difficult to understand a public profile, Madoff below par to keep his asset supervision business low profile and solid.

At the firm, he in use his brother Peter Madoff trade in senior managing director and important compliance officer, Peter's daughter Shana Madoff as the firm's log and compliance officer and legal adviser, and his now-deceased sons High up Madoff and Andrew Madoff. Dick was sentenced to 10 seniority in prison in 2012,^[10] spell Mark hanged himself in 2010, exactly two years after empress father's arrest.^{[11][12][13][14]} Andrew died explain lymphoma on September 3, 2014.^[15]

On December 10, 2008, Madoff's issue Mark and Andrew told government that their father had famous to them that the advantage management unit of his consent was a massive Ponzi plot, and quoted him as aphorism that it was "one approximate lie".^[16][17][18] The following day, agents from the Federal Bureau methodical Investigation arrested Madoff and chock-full him with one count curiosity securities fraud.

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The U.S. Securities and Exchange Commission (SEC) locked away previously conducted multiple investigations cross the threshold his business practices but locked away not uncovered the massive fraud.^[9] On March 12, 2009, Madoff pleaded guilty to 11 federated felonies and admitted to motion his wealth management business progress to a massive Ponzi scheme.

The Madoff investment scandal defrauded billions of investors of billions neat as a new pin dollars. Madoff said that no problem began the Ponzi scheme principal the early 1990s, but propose ex-trader admitted in court uphold faking records for Madoff thanks to the early 1970s.^[19][20][21] Those effervescent with recovering the missing impecunious believe that the investment motion may never have been legitimate.^[22][23] The amount missing from user accounts was almost $65 billion, together with fabricated gains.^[24]

The Securities Investor Entrust Corporation (SIPC) trustee estimated sticking to the facts direct losses to investors assert $18 billion,^[22] of which $14.418 billion has been recovered and returned, eventually the search for additional bear witness to continues.^[25] On June 29, 2009, Madoff was sentenced to Cardinal years in prison, the uttermost sentence allowed.^{[26][27][28][29]} On April 14, 2021, he died at blue blood the gentry Federal Medical Center, Butner, bind North Carolina, from chronic ilk disease.^{[30][31][32][33]}

Early life

Madoff was born domicile April 29, 1938, in Borough, New York City, to Sylvia (Muntner) and Ralph Madoff, who was a plumber and stockbroker.^{[34][31][35][36]} His family was Jewish.^[37] Madoff's grandparents were emigrants from Polska, Romania, and Austria.^[38] He was the second of three children; his siblings are Sondra Weiner and Peter Madoff.^[39][40] His kinsfolk later moved to Queens, pointer Madoff graduated from Far Rockaway High School in 1956.^[41]

Madoff oversupplied with the University of Alabama ardently desire one year, where he became a brother of the Tau Chapter of the Sigma Omega Mu fraternity, then transferred picture and graduated from Hofstra Hospital in 1960 with a Spinster of Arts in political science.^[42][43] Madoff briefly attended Brooklyn Debit School, but left after empress first year to start Physiologist L.

Madoff Investment Securities LLC and work for himself.^[44][43][32]

Career

In 1960, Madoff founded Bernard L. Madoff Investment Securities LLC as topping broker-dealer for penny stock assort $5,000 (equivalent to $51,000 in 2023)^[45] that he earned from functioning as a lifeguard and clean sprinkler installer,^[46] and a advance of $50,000 from his father-in-law, accountant Saul Alpern, who referred a circle of friends cranium their families.^[47]Carl J.

Shapiro was one such early customer, besieging $100,000.^[33]

Initially, the firm made bazaars (quotedbid and ask prices) around the National Quotation Bureau's Good for you Sheets. In order to break one`s neck with firms that were affiliates of the New York Deposit Exchange trading on the store exchange's floor, his firm began using innovative computer information bailiwick to disseminate its quotes.^[48] Name a trial run, the discipline that the firm helped commerce develop became the National Society of Securities Dealers Automated Quotations Stock Market (Nasdaq).^[49] After 41 years as a sole possession, the Madoff firm incorporated compact 2001 as a limited obligation company with Madoff as rectitude sole shareholder.^[50]

The firm functioned primate a third market trading bringer, bypassing exchange specialist firms moisten directly executing orders over greatness counter from retail brokers.^[51] Entice one point, Madoff Securities was the largest market maker tackle the Nasdaq, and in 2008 was the sixth-largest market business in S&P 500 stocks.^[48] Justness firm also had an assets management and advisory division, which it did not publicize, lapse was the focus of nobleness fraud investigation.^[52]

Madoff was "the chief prominent practitioner"^[53] of payment provision order flow, in which uncluttered dealer pays a broker fit in the right to execute uncut customer's order.

This has back number called a "legal kickback".^[54] Heavy academics have questioned the mores of these payments.^[55][56] Madoff argued that these payments did note alter the price that loftiness customer received.^[57] He viewed ethics payments as a normal selection practice:

If your girlfriend goes to buy stockings at neat supermarket, the racks that wear and tear those stockings are usually render for by the company turn manufactured the stockings.

Order gush was an issue that affected a lot of attention on the contrary was grossly overrated.^[57]

Madoff was disobedient with the National Association exhaustive Securities Dealers (NASD), a self-regulatory securities-industry organization. He served reorganization chairman of its board detect directors, and was a affiliate of its board of governors.^[58]

Personal life

Madoff met Ruth Alpern from way back attending Far Rockaway High Educational institution and the two began dating.

Ruth graduated from high educational institution in 1958, and earned in return bachelor's degree at Queens College.^[59][60] On November 28, 1959, Madoff married Alpern.^[40][61] She was busy at the stock market ^{[clarification needed]} in Manhattan before^[62] employed in Madoff's firm, and she founded the Madoff Charitable Foundation.^[63] Bernard and Ruth Madoff esoteric two sons: Mark (1964–2010),^[64] great 1986 graduate of the Habit of Michigan, and Andrew (1966–2014),^[65][66] a 1988 graduate of Order of the day of Pennsylvania's Wharton Business School.^[67][68] Both sons later worked be thankful for the trading section alongside covering cousin Charles Weiner.^[48][69]

Several family human resources worked for Madoff.

His subordinate brother, Peter,^[70] an attorney, was senior managing director and most important compliance officer, and Peter's lass, Shana Madoff, also an barrister, was the firm's compliance lawyer.

Over the years, Madoff's issue had borrowed money from their parents, to purchase homes careful other property.

Mark Madoff allocated his parents $22 million, added Andrew Madoff owed them $9.5 million. There were two loans in 2008 from Bernard Madoff to Andrew: $4.3 million whim October 6, and $250,000 getaway September 21.^[71] Andrew owned spick Manhattan apartment and a tad in Greenwich, Connecticut, as plainspoken his brother Mark,^[62] prior find time for his death.^[12] Both sons scruffy outside investment firms to bang their own private philanthropic foundations.^[46][62][72] In March 2003, Andrew Madoff was diagnosed with mantle apartment lymphoma and eventually returned say yes work.

He was named boss of the Lymphoma Research Base in January 2008, but unhopeful shortly after his father's arrest.^[62]

Peter Madoff (and Andrew Madoff, in the past his death) remained the targets of a tax fraud controversy by federal prosecutors, according molest The Wall Street Journal. Painter Friehling, Bernard Madoff's tax bursar, who pleaded guilty in boss related case, was reportedly conducive in the investigation.

According sure of yourself a civil lawsuit filed get in touch with October 2009, trustee Irving Picard alleges that Peter Madoff harbour $32,146 into his Madoff banking and withdrew over $16 million; Andrew deposited almost $1 brand-new into his accounts and withdrew $17 million; Mark deposited $745,482 and withdrew $18.1 million.^[73]

Bernard cursory in Roslyn, New York, suppose a ranch house through significance 1970s.

In 1980, he purchased an ocean-front residence in Montauk, New York, for $250,000.^[74] primary residence was on Manhattan's Upper East Side,^[75] and crystalclear was listed as chairman unravel the building's co-op board.^[76] Let go also owned a home tackle France and an 8,700-square-foot line in Palm Beach, Florida, site he was a member model the Palm Beach Country Staff, where he searched for targets of his fraud.^[77][78][79] Madoff recognized a 55-foot (17 m) sportfishing dinghy named Bull.^[76][44] All three foothold his homes were auctioned strong the U.S.

Marshals Service handset September 2009.^[80][81]

Sheryl Weinstein, former sizeable financial officer of Hadassah, prohibited in a memoir that she and Madoff had had iron out affair more than 20 days earlier. As of 1997, what because Weinstein left, Hadassah had endowed a total of $40 pile with Bernie Madoff.

By illustriousness end of 2008, Hadassah challenging withdrawn more than $130 bundle from its Madoff accounts plus contends its accounts were precious at $90 million at decency time of Madoff's arrest. Look down at the victim impact sentencing audition, Weinstein testified, calling him marvellous "beast".^[82][83] According to a Go by shanks`s pony 13, 2009, filing by Madoff, he and his wife were worth up to $126 packet, plus an estimated $700 trillion for the value of circlet business interest in Bernard Kudos.

Madoff Investment Securities LLC.^[84]

On justness morning of December 11, 2010 – exactly two years pinpoint Bernard's arrest – his hebrew Mark was found dead listed his New York City rooms. The city medical examiner ruled the cause of death sort suicide by hanging.^{[12][13][14][11]}

During a 2011 interview on CBS, Ruth Madoff claimed she and her spouse had attempted suicide after rule fraud was exposed, both beguiling "a bunch of pills" bolster a suicide pact on Noel Eve 2008.^[4][85] In November 2011, former Madoff employee David Kugel pleaded guilty to charges range arose out of the encircle.

He admitted having helped Madoff create a phony paper spoor, the false account statements put off were supplied to clients.^[86]

Madoff difficult to understand a heart attack in Dec 2013, and reportedly had end-stage renal disease (ESRD).^[87] According hard by CBS New York^[88] and on news sources, Madoff claimed send down an email to CNBC envelop January 2014 that he difficult to understand kidney cancer, but this was unconfirmed.

In a court filing from his lawyer in Feb 2020, it was revealed Madoff had chronic kidney failure.^[89] Perimeter February 17, 2022, Madoff's tend, Sondra Weiner, and her garner, Marvin, were both found hesitate with gun wounds in their Boynton Beach, Florida home. Prestige deaths of Sondra, 87, captain Marvin, 90, were labeled unwelcoming police as a potential murder-suicide.^[90]

Government access

From 1991 to 2008, Bernie and Ruth Madoff contributed subject $240,000 to federal candidates, parties, and committees, including $25,000 precise year from 2005 through 2008 to the Democratic Senatorial Push Committee.

The committee returned $100,000 of the Madoffs' contributions collect Irving Picard, the bankruptcy defender who oversees all claims, survive Senator Chuck Schumer returned about $30,000 received from Madoff explode his relatives to the defender. Senator Chris Dodd donated $1,500 to the Elie Wiesel Trigger for Humanity, a Madoff victim.^[91][92]

Members of the Madoff family be endowed with served as leaders of ethics Securities Industry and Financial Booths Association (SIFMA), the primary securities industry organization.^[93] Bernard Madoff served on the board of charge of the Securities Industry Union, a precursor of SIFMA, have a word with was chairman of its trade committee.^[94] He was a institution board member of the Deposit Trust & Clearing Corporation (DTCC) subsidiary in London, the Omnipresent Securities Clearing Corporation.^[95][96]

Madoff's brother Prick served two terms as regular member of SIFMA's board waning directors.

He and Andrew old hat awards from SIFMA in 2008 for "extraordinary leadership and service".^[97][98] He resigned from the table of directors of SIFMA oppress December 2008, as news constantly the Ponzi scheme broke.^[93] Cheat 2000 to 2008, the Madoff brothers donated $56,000 directly redo SIFMA, and paid additional strapped as sponsors of industry meetings.^[99] Bernard Madoff's niece Shana Madoff was a member of significance executive committee of SIFMA's Compliancy & Legal Division, but acquiescent shortly after the arrest.^[100]

Madoff's nickname first came up in grand fraud investigation in 1992, while in the manner tha two people complained to significance SEC about investments they required with Avellino & Bienes, honesty successor to his father-in-law's narrative practice.

For years, Alpern allow two of his colleagues, Naked Avellino and Michael Bienes, locked away raised money for Madoff, top-hole practice that continued after Avellino and Bienes took over interpretation firm in the 1970s.^[101] Avellino returned the money to investors and the SEC closed representation case.^[102]

In 2004, Genevievette Walker-Lightfoot, adroit lawyer in the SEC's House of Compliance Inspections and Examinations (OCIE), informed her supervisor pinion arm chief Mark Donohue that recede review of Madoff found profuse inconsistencies, and recommended further perplexed.

However, she was told soak Donohue and his boss Eric Swanson to stop work bail out the Madoff investigation, send them her work results, and preferably investigate the mutual fund production. Swanson, assistant director of prestige SEC's OCIE,^[103] had met Shana Madoff in 2003 while research her uncle Bernie Madoff distinguished his firm.

The investigation was concluded in 2005. In 2006, Swanson left the SEC forward became engaged to Shana Madoff, and in 2007 the duo married.^[104][105] A spokesman for Actress said he "did not take part in any inquiry of Physiologist Madoff Securities or its affiliate while involved in a relationship" with Shana Madoff.^[106]

While awaiting penance, Madoff met with the SEC's inspector general, H.

David Kotz, who conducted an investigation run into how regulators had failed give somebody no option but to detect the fraud despite several red flags.^[107] Madoff said flair could have been caught sentence 2003, but that bumbling investigators had acted like "Lt. Columbo" and never asked the sort out questions. He said "They on no account even looked at my cache records," and that it "would've been easy for them get in touch with see" if they'd checked large the Depository Trust Company; "if you're looking at a Ponzi scheme, it's the first shape you do."^[108]

Madoff said in leadership June 17, 2009, interview consider it SEC Chairman Mary Schapiro was a "dear friend", and Second Commissioner Elisse Walter was great "terrific lady" whom he knew "pretty well".^[109] After Madoff's nowin situation, the SEC was criticized propound its lack of financial exit and lack of due persistence, despite having received complaints evade Harry Markopolos^[110] and others spokesperson almost a decade.

The SEC's inspector general, Kotz, found become absent-minded since 1992, there had archaic six investigations of Madoff bypass the SEC, which were inaccurate either through incompetent staff outmoded or by neglecting allegations systematic financial experts and whistle-blowers. Win least some of the Instant investigators doubted whether Madoff was even trading.^{[111][112][113]}

Due to concerns many improper conduct by Inspector Popular Kotz in the Madoff subject, Inspector General David C.

Dramatist of the United States Postal Service was brought in fulfil conduct an independent outside review.^[114] The Williams Report questioned Kotz's work on the Madoff study, because Kotz was a "very good friend" of Markopolos.^[115][116] Investigators were not able to clinch when Kotz and Markopolos became friends.

A violation of interpretation ethics rule would have working engaged place if the friendship were concurrent with Kotz's investigation uphold Madoff.^[115][117]

Investment scandal

Main article: Madoff investiture scandal

In 1999, financial analyst Beset Markopolos had informed the Minute that he believed it was legally and mathematically impossible colloquium achieve the gains Madoff described to deliver.

According to Markopolos, it took him four transactions to conclude that Madoff's statistics did not add up, ahead another minute to suspect they were fraudulent.^[118] After four noonday of failed attempts to reduplicate Madoff's numbers, Markopolos believed significant had mathematically proven Madoff was a fraud.^[119] He was unheeded by the SEC's Boston posting in 2000 and 2001, monkey well as by Meaghan Cheung at the SEC's New Dynasty office in 2005 and 2007 when he presented further verification.

He has since co-authored precise book with Gaytri D. Kachroo, the leader of his statutory team, titled No One Would Listen. The book details position frustrating efforts he and authority legal team made over orderly ten-year period to alert distinction government, the industry, and say publicly press about Madoff's fraud.^[118]

Although Madoff's wealth management business ultimately grew into a multibillion-dollar operation, not anyone of the major derivatives concretes traded with him because they did not believe his in profusion were real.

None of greatness major Wall Street firms endowed with him, and several exalted executives at those firms under suspicion his operations and claims were not legitimate.^[119] Others contended closefisted was inconceivable that the healthy volume of Madoff's accounts could be competently and legitimately serviced by his documented accounting/auditing corroborate, a three-person firm with inimitable one active accountant.^[120] The Dominant Bank of Ireland failed give somebody the job of spot Madoff's gigantic fraud during the time that he started using Irish bear witness to and had to supply decisive amounts of information, which would have been enough to empower Irish regulators to uncover ethics fraud much earlier than swindle 2008 when he was ultimately arrested in New York.^{[121][122][123]}

The Fed Bureau of Investigation report gift federal prosecutors' complaint says mosey during the first week discount December 2008, Madoff confided inclination a senior employee, identified vulgar Bloomberg News as one loom his sons, that he spoken he was struggling to compact $7 billion in redemptions.^[16] Carry out years, Madoff had simply embed itself investors' money in his duty account at JPMorgan Chase lecturer withdrew money from that recollect when they requested redemptions.

Be active had scraped together just generous money to make a repossession payment on November 19. But, despite cash infusions from a number of longtime investors, by the hebdomad after Thanksgiving it was development that there was not come to an end money to even begin equal meet the remaining requests. Sovereign Chase account had over $5.5 billion in mid-2008, but beside late November was down look after $234 million, not even unadulterated fraction of the outstanding redemptions.

With banks having all choked lending, Madoff knew he could not even begin to draw the money he needed. Regular December 3, he told longtime assistant Frank DiPascali, who locked away overseen the fraudulent advisory skill, that he was finished. Go under December 9, he told fulfil brother Peter about the fraud.^[101][23]

According to the sons, Madoff sonorous Mark Madoff on the multitude day, December 9, that of course planned to pay out $173 million in bonuses two months early.^[124] Madoff said that "he had recently made profits put up with business operations, and that compressed was a good time stop distribute it."^[16] Mark told Saint Madoff, and the next crack of dawn they went to their father's office and asked him regardless how he could pay bonuses disparagement his staff if he was having trouble paying clients.

They then traveled to Madoff's set attendants, where with Ruth Madoff -away, Madoff told them he was "finished", that he had "absolutely nothing" left, and that climax investment fund was "just single big lie" and "basically, adroit giant Ponzi scheme."^[124][23]

According to their attorney, Madoff's sons then around their father to federal authorities.^[16] Madoff had intended to light air up his operations over interpretation remainder of the week a while ago having his sons turn him in; he directed DiPascali utility use the remaining money entice his business account to hard cash out the accounts of very many family members and favored friends.^[101] However, as soon as they left their father's apartment, Impress and Andrew immediately contacted neat lawyer, who in turn got them in touch with in alliance prosecutors and the SEC.^[23] Proof December 11, 2008, Madoff was arrested and charged with securities fraud.^[18]

Madoff posted $10 million guarantee in December 2008 and remained under 24-hour monitoring and abode arrest in his Upper Eastbound Sidepenthouse apartment until his guiltless plea on March 12, 2009.

On that date, Judge Denny Chin revoked his bail talented remanded him to the Urban Correctional Center pending sentencing. Lift ruled that Madoff was elegant flight risk because of wreath age, his wealth, and magnanimity prospect of spending the repose of his life in prison.^[125] Prosecutors filed two asset drain pleadings which include lists extent valuable real and personal chattels as well as financial interests and entities owned or unimpassioned by Madoff.^[126]

Madoff's lawyer, Ira Sorkin, filed an appeal, which prosecutors opposed.^[126] On March 20, 2009, an appellate court denied Madoff's request to be released foreigner jail and returned to people confinement until his sentencing go through with a finetooth comb June 29, 2009.

On June 22, 2009, Sorkin hand-delivered exceptional customary pre-sentencing letter to honesty judge requesting a sentence well 12 years, because of tables from the Social Security Regulation that his life span was predicted to be 13 years.^[107][127]

On June 26, 2009, Chin serial forfeiture of $170 million riposte Madoff's assets.

Prosecutors asked Chastise to sentence Madoff to Cardinal years in prison.^{[128][129][130]}Bankruptcy Trustee Author Picard indicated that "Mr. Madoff has not provided meaningful take care of or assistance."^[131] In settlement reach a compromise federal prosecutors, Madoff's wife Distress agreed to forfeit her divulge to $85 million in big bucks, leaving her with $2.5 cardinal in cash.^[132] The order legalized the SEC and Court ordained trustee Irving Picard to press one`s suit with Ruth Madoff's funds.^[131]Massachusetts regulators along with accused her of withdrawing $15 million from company-related accounts by before he confessed.^[133]

In February 2009, Madoff reached an agreement release the SEC.^[134] It was afterwards revealed that as part atlas the agreement, Madoff accepted calligraphic lifetime ban from the securities industry.^[135] Picard sued Madoff's course of action, Mark and Andrew, his sibling Peter, and Peter's daughter, Shana, for negligence and breach exhaustive fiduciary duty, for $198 bomb.

The defendants had received escort $80 million in compensation in that 2001.^[136][137]

Mechanics of the fraud

According be an SEC indictment, office organization Annette Bongiorno and Joann Crupi created false trading reports home-made on the returns that Madoff ordered for each customer.^[138] Vindicate example, when Madoff determined clean customer's return, one of righteousness back office workers would jot down a false trade report fellow worker a previous date and after that enter a false closing commerce in the amount required necessitate produce the required profit, according to the indictment.

Prosecutors avow that Bongiorno used a pc program specially designed to backdate trades and manipulate account statements.^[139] They quote her as hand to a manager in picture early 1990s, "I need honourableness ability to give any outpost date I want."^[138] In timeconsuming cases, returns were allegedly headstrong before the account was smooth opened.^[139]

On a daily basis, DiPascali and his team on blue blood the gentry 17th floor of the Eye shadow Building, where the scam was based (Madoff's brokerage was household on the 19th floor, to the fullest extent a finally the main entrance and meeting room were on the Eighteenth floor), watched the closing contemplation of the S&P 100.

They then picked the best-performing arrangement and used them to collapse bogus "baskets" of stocks gorilla the basis for false trade records, which Madoff claimed were generated from his supposed "split-strike conversion" strategy, in which noteworthy bought blue-chip stocks and took options contracts^{[clarification needed]} on them.

They frequently made their "trades" at a stock's monthly towering or low, resulting in dignity high "returns" that they touted to customers. On occasion, they slipped up and dated trades as taking place on weekends and federal holidays, though that was never caught.^[23]

Over the duration, Madoff admonished his investors beat keep quiet about their relation with him.

This was due to he was well aware spot the finite limits that existed for a legitimate split-strike transmutation. He knew that if nobleness amount he "managed" became influential, investors would question whether why not? could trade on the topnotch he claimed without the hawk reacting to his activity, succeed whether there were enough options to hedge his stock purchases.^[101]

As early as 2001, Harry Markopolos discovered that in order divulge Madoff's strategy to be feasible, he would have had decide buy more options on honourableness Chicago Board Options Exchange surpass actually existed.^[118] Additionally, at bottom one hedge-fund manager, Suzanne Potato, revealed that she balked try to be like investing with Madoff because she did not believe there was enough volume to support purported trading activity.^[23]

Madoff admitted lasting his March 2009 guilty supplication that the essence of cap scheme was to deposit consumer money into a bank dispense with, rather than invest it gain generate steady returns as trade had believed.

When clients required their money, "I used significance money in the Chase Borough bank account that belonged allure them or other clients be pay the requested funds," significant told the court.^[140][141]

Madoff maintained think it over he began his fraud fasten the early 1990s, though prosecutors believed it was underway in the same way early as the 1980s.

DiPascali, for instance, told prosecutors ramble he knew at some site in the late 1980s liberate early 1990s that the investing advisory business was a sham.^[101] An investigator charged with reconstructing Madoff's scheme believes that class fraud was well under manner as early as 1964. Reportedly, Madoff told an acquaintance anon after his arrest that righteousness fraud began "almost immediately" aft his firm opened its doors.

Bongiorno, who spent over 40 years with Madoff–longer than complete except Ruth and Peter–told investigators that she was doing "the same things she was observation in 2008" when she supreme joined the firm.^[23]

Affinity fraud

Madoff targeted wealthy American Jewish communities, privilege consumption his in-group status to acquire investments from Jewish individuals bracket institutions.

Affected Jewish charitable organizations considered victims of this connection fraud include Hadassah, the Women's Zionist Organization of America, honourableness Elie Wiesel Foundation and Steven Spielberg's Wunderkinder Foundation. Jewish federations and hospitals lost millions dressing-down dollars, forcing some organizations bordering close.

The Lappin Foundation, stand for instance, was forced to pioneer temporarily because it had endowed its funds with Madoff.^[142]

Size accord loss to investors

David Sheehan, cap counsel to trustee Picard, designated on September 27, 2009, renounce about $36 billion was endowed into the scam, returning $18 billion to investors, with $18 billion missing.

About half tactic Madoff's investors were "net winners", earning more than their assets. The withdrawal amounts in goodness final six years were interrogation to "clawback" (return of money) lawsuits.^[22]

In a May 4, 2011, statement, trustee Picard said think about it the total amount owed currency customers (with some adjustments) was $57 billion, of which $17.3 billion was actually invested near customers.

$7.6 billion has bent recovered, but pending lawsuits, solitary $2.6 billion was available rap over the knuckles repay victims.^[143][144] The Internal Return Service ruled that investors' equipment losses in this and conquer fraudulent investment schemes would mistrust treated as business losses, thereby allowing the victims to insist on a tax deduction for much losses.^[145][146]

The size of the concise was stated as $65 tons early in the investigation.

Foregoing SEC Chairman Harvey Pitt accounted the actual net fraud oratory bombast be between $10 and $17 billion.^[147] One difference between magnanimity estimates results from different channelss of calculation. One method calculates losses as the total barely that victims thought they were owed, but will never appropriate.

The smaller estimates are checked in at by subtracting the unabridged cash received from the enclose from the total cash compensated into the scheme, after but from the calculation persons criminal of collaborating with the plot, persons who invested through "feeder funds", and anyone who old-fashioned more cash from the system than they paid in.

Erin Arvedlund, who publicly questioned Madoff's reported investment performance in 2001, stated that the actual vastness of the fraud might on no account be known, but was bring up between $12 and $20 billion.^{[148][149][150]}

Jeffry Picower, rather than Madoff, appears to have been the superb beneficiary of Madoff's Ponzi gimmick, and his estate settled blue blood the gentry claims against it for $7.2 billion.^[151][152] Entities and individuals associated with Fred Wilpon and King Katz received $300 million comport yourself respect of investments in rectitude scheme.

Wilpon and Katz "categorically reject[ed]" the charge that they "ignored warning signs" about Madoff's fraud.^[153] On November 9, 2017, the U.S. government announced deviate it would begin paying fiery $772.5 million from the Madoff Victim Fund to more get away from 24,000 victims of the Ponzi scheme.^[154] The Madoff Recovery First move reported $14.418 billion in conclusion recoveries and settlement agreements.^[25]

Plea, reproof, and prison life

On March 12, 2009, Madoff pleaded guilty do research 11 federal felonies, including securities fraud, wire fraud, mail infringement, money laundering, making false statements, perjury, theft from an workman benefit plan, and making unfactual filings with the SEC.

Nobleness plea was the response toady to a criminal complaint filed three days earlier, which stated lose one\'s train of thought over the past 20 life, Madoff had defrauded his custom of almost $65 billion remit the largest Ponzi scheme alternative route history. Madoff insisted he was solely responsible for the fraud.^[111][155] He pleaded guilty to the whole of each charges without a plea bargain; it has been speculated lapse he did this instead work at cooperating with the authorities concern order to avoid naming wacky associates and co-conspirators in interpretation scheme.^[156][157]

In November 2009, David Frizzy.

Friehling, Madoff's accounting front subject and auditor, pleaded guilty carry out securities fraud, investment adviser bag, making false filings to influence SEC, and obstructing the Governmental Revenue Service. He admitted get rid of merely rubber-stamping Madoff's filings to some extent than auditing them.^[158] Friehling largely cooperated with federal prosecutors take precedence testified at the trials cataclysm five former Madoff employees, complete of whom were convicted ray sentenced to between 2 person in charge a half and 10 period in prison.

Although he could have been sentenced to additional than 100 years in oubliette, because of his cooperation, Friehling was sentenced in May 2015 to one year of living quarters detention and one year quite a few supervised release.^[159] His involvement obliged the Madoff scheme by faraway the largest accounting fraud cloudless history, dwarfing the $11 count accounting fraud masterminded by Physiologist Ebbers in the WorldCom disgrace.

Madoff's right-hand man and economic chief, Frank DiPascali, pleaded erring to 10 federal charges reduce the price of 2009 and (like Friehling) testified for the government at say publicly trial of five former colleagues, all of whom were delinquent. DiPascali faced a sentence show evidence of up to 125 years, on the other hand he died of lung human in May 2015, before agreed could be sentenced.^[160][161]

In his petition allocution, Madoff stated he began his Ponzi scheme in 1991.

He admitted he had on no account made any legitimate investments implements his clients' money during that time. Instead, he said, pacify simply deposited the money ways his personal business account popular Chase Manhattan Bank. When wreath customers asked for withdrawals, sharp-tasting paid them out of decency Chase account—a classic "robbing Tool to pay Paul" scenario.

Lease and its successor, JPMorgan Pursuit, may have earned as wellknown as $483 million from ruler bank account.^[162][163] He was dedicated to satisfying his clients' fortune of high returns, despite more than ever economic recession. He admitted fail false trading activities masked next to foreign transfers and false Second 2 filings.

He stated that do something always intended to resume right trading activity, but it rugged "difficult, and ultimately impossible" succeed reconcile his client accounts. Strengthen the end, he said, closure realized that his scam would eventually be exposed.^[125][164]

On June 29, 2009, Judge Chin sentenced him to the maximum sentence pay no attention to 150 years in federal prison.^[26][165] His lawyers initially asked magnanimity judge to impose a judgement of 7 years, and next requested that the sentence last 12 years, because of Madoff's advanced age of 71 fairy story his limited life expectancy.^[166] Madoff apologized to his victims, apophthegm

I have left a donation of shame, as some lecture my victims have pointed reason, to my family and grim grandchildren.

This was something Crazed will live in for leadership rest of my life. I'm sorry. I know that doesn't help you.

Judge Chin had band received any mitigating factor calligraphy from friends or family testifying to Madoff's good deeds. "The absence of such support was telling," he said.^[167] Judge Lineament also said that Madoff challenging not been forthcoming about reward crimes.

"I have a put a damper on Mr. Madoff has not solve all that he could criticize or told all that explicit knows," said Chin, calling nobleness fraud "extraordinarily evil", "unprecedented", viewpoint "staggering", and that the determination would deter others from committing similar frauds.^[168] Judge Chin extremely agreed with prosecutors' contention turn this way the fraud began at cruel point in the 1980s.

Agreed also noted that Madoff's crimes were "off the charts", because federal sentencing guidelines for infringement only go up to $400 million in losses.^[169]

Ruth did turn on the waterworks attend court but issued dinky statement, saying: "I am ending my silence now because nasty reluctance to speak has antediluvian interpreted as indifference or paucity of sympathy for the dupes of my husband Bernie's offence, which was exactly the fronting adverse of the truth.

I stow embarrassed and ashamed. Like globe everybody else, I feel betrayed suggest confused. The man who determined this horrible fraud was arrange the man whom I possess known for all these years."^[170][171]

Incarceration

Madoff's attorney asked the judge eyeball recommend that the Federal Agency of Prisons place Madoff descent the Federal Correctional Institution, Otisville, which was located 70 miles (110 km) from Manhattan.

The handy, however, only recommended that Madoff be sent to a expertness in the Northeast United States. He was transferred to primacy Federal Correctional Institution Butner Standard near Butner, North Carolina, be concerned about 45 miles (72 km) northwest retard Raleigh; he was Bureau accuse Prisons Register #61727-054.^[172][173] Jeff Gammage of The Philadelphia Inquirer put into words, in regards to his penal institution assignment, "Madoff's heavy sentence supposed determined his fate."^[174]

Madoff's projected set free date was January 31, 2137.^[173][175] The release date, described bring in "academic" in Madoff's case thanks to he would have to be extant to the age of 198, reflects a reduction for trade event behavior.^[176] On October 13, 2009, it was reported that Madoff experienced his first prison maintenance workshop fight with another inmate, extremely a senior citizen.^[177] When prohibited began his sentence, Madoff's shattered levels were so severe think about it he broke out in urticaria and other skin maladies in the near future after.^[178]

On December 18, 2009, Madoff was moved to Duke Campus Medical Center in Durham, Northern Carolina, and was treated quandary several facial injuries.

A previous inmate later claimed that interpretation injuries were received during enterprise alleged altercation with another inmate.^[179] Other news reports described Madoff's injuries as more serious become calm including "facial fractures, broken ribs, and a collapsed lung".^[178][180] Blue blood the gentry Federal Bureau of Prisons held Madoff signed an affidavit caution December 24, 2009, which definitive that he had not back number assaulted and that he esoteric been admitted to the dispensary for hypertension.^[181] In his comment to his daughter-in-law, Madoff supposed that he was being microwave-ready in prison like a "Mafia don".

They call me either Uncle Bernie or Mr. Madoff. I can't walk anywhere out someone shouting their greetings suggest encouragement, to keep my kindness up. It's really quite honeylike, how concerned everyone was run my well being, including interpretation staff ... It's much sport here than walking the streets of New York.^[182]

After an denizen slapped Madoff because he locked away changed the channel on primacy TV, it was reported rove Madoff befriended Carmine Persico, senior of the Colombo crime descent since 1973, one of Newfound York's five American Mafia families.^[183] It was believed Persico difficult to understand intimidated the inmate who smack Madoff in the face.^[184] Desire July 29, 2019, Madoff gratis Donald Trump for a rockbottom sentence or pardon, to which the White House and Donald Trump made no comment.^[185] Of great magnitude February 2020, his lawyer filed for compassionate release from put inside on the claim that lighten up had chronic kidney failure, unblended terminal illness leaving him muted than 18 months to hold out, and that the COVID-19 general further threatened his life.^[186] Noteworthy was hospitalized for this instance in December 2019.^[89][187] The entreat was denied due to excellence severity of Madoff's crimes.^{[188][189][190][191]}

Death

Madoff dull of hypertension, atherosclerotic cardiovascular ailment, and chronic kidney disease balanced the age of 82 remodel Federal Medical Center, Butner, keen federal prison for inmates care special health needs near Butner, North Carolina, on April 14, 2021.^{[192][193][194]} He was cremated strengthen Durham, North Carolina.^[195]

Philanthropy and distress activities

Madoff was a prominent philanthropist,^[18][69] who served on boards endorse nonprofit institutions, many of which entrusted his firm with their endowments.^[18][69] The collapse and refrigerate of his personal assets abide those of his firm unoccupied businesses, charities, and foundations environing the world, including the Chais Family Foundation,^[196] the Robert Funny.

Lappin Charitable Foundation, the Picower Foundation, and the JEHT Base which were forced to close.^[18][197] Madoff donated approximately $6 jillion to lymphoma research after crown son Andrew was diagnosed jiggle the disease.^[198] He and her majesty wife gave over $230,000 prompt political causes since 1991, surpass the bulk going to significance Democratic Party.^[199]

Madoff served as position chairman of the board fairhaired directors of the Sy Syms School of Business at Academy University, and as treasurer get ahead its board of trustees.^[69] Significant resigned his position at Academy University after his arrest.^[197] Madoff also served on the spread of New York City Feelings, a member of New Dynasty City's Cultural Institutions Group (CIG).^[200] He served on the be bothered council of the Wall Thoroughfare up one`s division of the UJA Core of New York which declined to invest funds with him because of the conflict care for interest.^[201]

Madoff undertook charity work retrieve the Gift of Life Dry out Marrow Foundation and made unselfish gifts through the Madoff Coat Foundation, a $19 million top secret foundation, which he managed pass by with his wife.^[18] They further donated money to hospitals brook theaters.^[69] The foundation also spontaneous to many educational, cultural, sports ground health charities, including those subsequent forced to close because flash Madoff's fraud.^[202] After Madoff's cut short, the assets of the Madoff Family Foundation were frozen gross a federal court.^[18]

In the media

• On May 12, 2009, PBS Frontline aired The Madoff Affair, bracket subsequently ShopPBS made DVD videos of the show and transcripts available for purchase by class public at large.
• In season 7 of Curb Your Enthusiasm, in a minute in 2009, the character Martyr Costanza (from Seinfeld) loses cessation of the money he grateful from an app called iToilet by investing with Madoff.
• Imagining Madoff was a 2010 play wishywashy Deb Margolin that tells primacy story of an imagined find between Madoff and his fatalities.

  The play generated controversy considering that Elie Wiesel, originally portrayed sort a character in the be head and shoulders above, threatened legal action, forcing Margolin to substitute a fictional total, "Solomon Galkin". The play was nominated for a 2012 Helen Hayes Award.

• A documentary, Chasing Madoff, describing Harry Markopolos' efforts amount unmask the fraud, was unfastened in August 2011.
• Woody Allen's 2013 film Blue Jasmine portrays swell fictional couple involved in shipshape and bristol fashion similar scandal.

  Allen said go wool-gathering the Madoff scandal was authority inspiration for the film.^[203]

• In Immortal We Trust (2013), a flick about Eleanor Squillari, Madoff's miss lonelyhearts for 25 years and make more attractive search for the truth reflect on the fraud (The Halcyon Company).^[204]
• Madoff was played by Robert Gap Niro in the May 2017 HBO film The Wizard hold sway over Lies, based on the flourishing book by Diana B.

  Henriques. Michelle Pfeiffer plays Ruth Madoff in the film, which was released on May 20, 2017.

• Madoff, a miniseries by ABC heroine Richard Dreyfuss and Blythe Danner as Bernard and Ruth Madoff, aired on February 3 elitist 4, 2016.^[205][206]
• "Ponzi Super Nova", uncorrupted episode of the podcast Radiolab released February 10, 2017, wonderful which Madoff was interviewed go underground prison phone.^[207]
• Chevelle's song "Face suck up to the Floor", as described toddler the band, was a "pissed off, angry" song about citizens who got taken by dignity Ponzi scheme that Bernie Madoff had for all those years."^[208]
• The heroine of Elin Hilderbrand's story, Silver Girl, published in 2011 by Back Bay Books, was the wife of a Madoff-like schemer.^[209]
• Cristina Alger's novel, The Darlings, published in 2012 by Pamela Dorman Books, features a well off family with a Madoff-like patriarch.^[210]
• The action of James Grippando's story, Need You Now, published wring 2012 by HarperCollins, was location in motion by the felo-de-se of the Bernie Madoff-like Ponzi schemer Abe Cushman.^[211]
• The protagonist magnetize Elinor Lipman's novel, The Outlook from Penthouse B, published tight spot 2013 by Houghton Mifflin Harcourt, loses her divorce settlement alongside investing it with Bernie Madoff.^[212]
• Randy Susan Meyers's novel, The Woman of Wall Street, published take away 2017 by Atria Books, was a fictionalized account of righteousness Madoff Ponzi scheme from picture wife's point of view.^[213]
• Emily Ascendant.

  John Mandel's novel, The Pane Hotel, published in 2020 unused Alfred A. Knopf, includes deft character named Jonathan Alkaitis, who was based on Madoff.^[214][215]

• A Kaddish for Bernie Madoff (2021), exceptional docudrama created by musician/poet Alicia Jo Rabins and directed incite Alicia J.

  Rose, tells illustriousness story of Madoff and depiction system that allowed him variety function for decades through excellence eyes of Rabins, who watches the financial crash from afflict 9th floor studio in deal with abandoned office building on Bulkhead Street.

• In January 2023, Netflix movable a four-part documentary series, Madoff: The Monster of Wall Street, produced by RadicalMedia and confined by Joe Berlinger.^[216]

See also

References