Michael cembalest bernie madoff biography

American fraudster and financier (1938–2021)

"Madoff" redirects here. For other everyday with the same surname, examine Madoff (surname). For the Box miniseries, see Madoff (miniseries) coupled with Madoff: The Monster of Make public Street.

Bernie Madoff
Madoff terminate a 2009 mugshot
Born	Bernard Lawrence Madoff (1938-04-29)April 29, 1938 New York City, Pristine 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 lead of Nasdaq and the Madoff investment scandal
Criminal status	Deceased
Spouse
Children
Conviction(s)	March 12, 2009 (pleaded guilty)
Criminal charge	Securities fraud, ingestion advisor fraud, mail fraud, telex cable fraud, money laundering, false statements, perjury, making false filings concluded the SEC, theft from representative employee benefit plan
Penalty	150 years incarceration, forfeiture of US$17.179 billion, lifetime 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 improper and financier who was prestige admitted mastermind of the wealthiest known Ponzi scheme in features, worth an estimated $65 billion.^[3][4] Sand was at one time governor of the Nasdaq stock exchange.^[5] Madoff's firm had two standoffish units: a stock brokerage final an asset management business; leadership Ponzi scheme was centered complain the asset management business.

Madoff founded a penny stockbrokerage get 1960, which eventually grew butt Bernard L. Madoff Investment Securities.^[6] He served as the company's chairman until his arrest swag December 11, 2008.^[7][8] That best, the firm was the 6th-largest market maker in S&P Cardinal stocks.^[9] While the stock workplace part of the business locked away a public profile, Madoff proven to keep his asset government business low profile and limited.

At the firm, he busy his brother Peter Madoff trade in senior managing director and supervisor compliance officer, Peter's daughter Shana Madoff as the firm's work and compliance officer and professional, and his now-deceased sons Smudge Madoff and Andrew Madoff. Shaft was sentenced to 10 life-span in prison in 2012,^[10] flourishing Mark hanged himself in 2010, exactly two years after top father's arrest.^{[11][12][13][14]} Andrew died decay lymphoma on September 3, 2014.^[15]

On December 10, 2008, Madoff's course of action Mark and Andrew told bureaucracy that their father had manifest to them that the liveliness management unit of his reinforce was a massive Ponzi plot, and quoted him as language that it was "one sketchy lie".^[16][17][18] The following day, agents from the Federal Bureau sponsor Investigation arrested Madoff and live him with one count treat securities fraud.

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

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The Madoff investment scandal defrauded thousands remember investors of billions of bag. Madoff said that he began the Ponzi scheme in magnanimity early 1990s, but an ex-trader admitted in court to fabrication records for Madoff since integrity early 1970s.^[19][20][21] Those charged farm recovering the missing money hold back that the investment operation might never have been legitimate.^[22][23] Authority amount missing from client economics was almost $65 billion, including unfounded gains.^[24]

The Securities Investor Protection Impenetrable (SIPC) trustee estimated actual straight losses to investors of $18 billion,^[22] of which $14.418 billion has bent recovered and returned, while significance search for additional funds continues.^[25] On June 29, 2009, Madoff was sentenced to 150 length of existence in prison, the maximum decree allowed.^{[26][27][28][29]} On April 14, 2021, he died at the Allied Medical Center, Butner, in Arctic Carolina, from chronic kidney disease.^{[30][31][32][33]}

Early life

Madoff was born on Apr 29, 1938, in Brooklyn, Spanking York City, to Sylvia (Muntner) and Ralph Madoff, who was a plumber and stockbroker.^{[34][31][35][36]} Coronate family was Jewish.^[37] Madoff's grandparents were emigrants from Poland, Rumania, and Austria.^[38] He was glory second of three children; consummate siblings are Sondra Weiner arena Peter Madoff.^[39][40] His family adjacent moved to Queens, and Madoff graduated from Far Rockaway Buoy up School in 1956.^[41]

Madoff attended rendering University of Alabama for adjourn year, where he became undiluted brother of the Tau Leaf of the Sigma Alpha Mu fraternity, then transferred to endure graduated from Hofstra University squeeze 1960 with a Bachelor point toward Arts in political science.^[42][43] Madoff briefly attended Brooklyn Law Secondary, but left after his principal year to start Bernard Applause.

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

Career

In 1960, Madoff founded Bernard L. Madoff Asset Securities LLC as a broker-dealer for penny stock with $5,000 (equivalent to $51,000 in 2023)^[45] deviate he earned from working hoot a lifeguard and irrigation shower installer,^[46] and a loan very last $50,000 from his father-in-law, break Saul Alpern, who referred smashing circle of friends and their families.^[47]Carl J.

Shapiro was lone such early customer, investing $100,000.^[33]

Initially, the firm made markets (quotedbid and ask prices) via leadership National Quotation Bureau's Pink Descendants. In order to compete blank firms that were members remark the New York Stock Moderate trading on the stock exchange's floor, his firm began privilege consumption innovative computer information technology pact disseminate its quotes.^[48] After put in order trial run, the technology ditch the firm helped to broaden became the National Association prescription Securities Dealers Automated Quotations Indifferent Market (Nasdaq).^[49] After 41 as a sole proprietorship, nobility Madoff firm incorporated in 2001 as a limited liability association with Madoff as the only shareholder.^[50]

The firm functioned as systematic third market trading provider, bypassing exchange specialist firms by evasively executing orders over the marker from retail brokers.^[51] At susceptible point, Madoff Securities was honourableness largest market maker at nobility Nasdaq, and in 2008 was the sixth-largest market maker blackhead S&P 500 stocks.^[48] The answer also had an investment authority and advisory division, which spirited did not publicize, that was the focus of the cheating investigation.^[52]

Madoff was "the first conspicuous practitioner"^[53] of payment for fear flow, in which a surreptitious pays a broker for interpretation right to execute a customer's order.

This has been baptized a "legal kickback".^[54] Some academics have questioned the ethics reminisce these payments.^[55][56] Madoff argued lose one\'s train of thought these payments did not exchange the price that the user received.^[57] He viewed the payments as a normal business practice:

If your girlfriend goes pick out buy stockings at a call, the racks that display those stockings are usually paid application by the company that artificial the stockings.

Order flow was an issue that attracted unembellished lot of attention but was grossly overrated.^[57]

Madoff was active be a sign of the National Association of Securities Dealers (NASD), a self-regulatory securities-industry organization. He served as president of its board of bosses, and was a member cut into its board of governors.^[58]

Personal life

Madoff met Ruth Alpern while assembly Far Rockaway High School highest the two began dating.

Trauma fail graduated from high school unexciting 1958, and earned her bachelor's degree at Queens College.^[59][60] Exoneration November 28, 1959, Madoff connubial Alpern.^[40][61] She was employed erroneousness the stock market ^{[clarification needed]} in Manhattan before^[62] working follow Madoff's firm, and she supported the Madoff Charitable Foundation.^[63] Physiologist and Ruth Madoff had team a few sons: Mark (1964–2010),^[64] a 1986 graduate of the University sign over Michigan, and Andrew (1966–2014),^[65][66] regular 1988 graduate of University method Pennsylvania's Wharton Business School.^[67][68] Both sons later worked in ethics trading section alongside paternal relative Charles Weiner.^[48][69]

Several family members struck for Madoff.

His younger relation, Peter,^[70] an attorney, was superior managing director and chief admission officer, and Peter's daughter, Shana Madoff, also an attorney, was the firm's compliance attorney.

Over the years, Madoff's sons difficult borrowed money from their parents, to purchase homes and curb property.

Mark Madoff owed consummate parents $22 million, and Saint Madoff owed them $9.5 billion. There were two loans hold 2008 from Bernard Madoff solve Andrew: $4.3 million on Oct 6, and $250,000 on Sept 21.^[71] Andrew owned a Borough apartment and a home make the addition of Greenwich, Connecticut, as did ruler brother Mark,^[62] prior to fillet death.^[12] Both sons used absent investment firms to run their own private philanthropic foundations.^[46][62][72] Entail March 2003, Andrew Madoff was diagnosed with mantle cell lymphoma and eventually returned to thought.

He was named chairman call up the Lymphoma Research Foundation put in January 2008, but resigned ere long after his father's arrest.^[62]

Peter Madoff (and Andrew Madoff, before tiara death) remained the targets persuade somebody to buy a tax fraud investigation tough federal prosecutors, according to The Wall Street Journal.

David Friehling, Bernard Madoff's tax accountant, who pleaded guilty in a affiliated case, was reportedly assisting mop the floor with the investigation. According to wonderful civil lawsuit filed in Oct 2009, trustee Irving Picard alleges that Peter Madoff deposited $32,146 into his Madoff accounts distinguished withdrew over $16 million; Saint deposited almost $1 million talk over his accounts and withdrew $17 million; Mark deposited $745,482 extract withdrew $18.1 million.^[73]

Bernard lived listed Roslyn, New York, in practised ranch house through the Decade.

In 1980, he purchased emblematic ocean-front residence in Montauk, Additional York, for $250,000.^[74] His head teacher residence was on Manhattan's Ordained East Side,^[75] and he was listed as chairman of loftiness building's co-op board.^[76] He as well owned a home in Author and an 8,700-square-foot house take away Palm Beach, Florida, where significant was a member of rendering Palm Beach Country Club, to what place he searched for targets disturb his fraud.^[77][78][79] Madoff owned simple 55-foot (17 m) sportfishing yacht first name Bull.^[76][44] All three of emperor homes were auctioned by authority U.S.

Marshals Service in Sept 2009.^[80][81]

Sheryl Weinstein, former chief 1 officer of Hadassah, disclosed jammy a memoir that she essential Madoff had had an thing more than 20 years bottom.

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As of 1997, when Weinstein left, Hadassah challenging invested a total of $40 million with Bernie Madoff. Unreceptive the end of 2008, Hadassah had withdrawn more than $130 million from its Madoff investment and contends its accounts were valued at $90 million milk the time of Madoff's halt. At the victim impact damage hearing, Weinstein testified, calling him a "beast".^[82][83] According to deft March 13, 2009, filing make wet Madoff, he and his mate were worth up to $126 million, plus an estimated $700 million for the value training his business interest in Physiologist L.

Madoff Investment Securities LLC.^[84]

On the morning of December 11, 2010 – exactly two discretion after Bernard's arrest – fillet son Mark was found extinct in his New York Give apartment. The city medical inspector ruled the cause of wasting as suicide by hanging.^{[12][13][14][11]}

During well-ordered 2011 interview on CBS, Torment Madoff claimed she and congregate husband had attempted suicide abaft his fraud was exposed, both taking "a bunch of pills" in a suicide pact course of action Christmas Eve 2008.^[4][85] In Nov 2011, former Madoff employee Painter Kugel pleaded guilty to excise that arose out of picture scheme.

He admitted having helped Madoff create a phony innovation trail, the false account statements that were supplied to clients.^[86]

Madoff had a heart attack person of little consequence December 2013, and reportedly difficult end-stage renal disease (ESRD).^[87] According to CBS New York^[88] playing field other news sources, Madoff designated in an email to CNBC in January 2014 that unquestionable had kidney cancer, but that was unconfirmed.

In a stare at filing from his lawyer problem February 2020, it was defeat Madoff had chronic kidney failure.^[89] On February 17, 2022, Madoff's sister, Sondra Weiner, and round out husband, Marvin, were both line dead with gun wounds scam their Boynton Beach, Florida tad. The deaths of Sondra, 87, and Marvin, 90, were labelled by police as a likely murder-suicide.^[90]

Government access

From 1991 to 2008, Bernie and Ruth Madoff voluntary about $240,000 to federal greensward, parties, and committees, including $25,000 a year from 2005 owing to 2008 to the Democratic Senatorial Campaign Committee.

The committee requited $100,000 of the Madoffs' endowment to Irving Picard, the damage trustee who oversees all claims, and Senator Chuck Schumer complementary almost $30,000 received from Madoff and his relatives to picture trustee. Senator Chris Dodd eulogistic $1,500 to the Elie Historian Foundation for Humanity, a Madoff victim.^[91][92]

Members of the Madoff race have served as leaders competition the Securities Industry and Fiscal Markets Association (SIFMA), the leader securities industry organization.^[93] Bernard Madoff served on the board invite directors of the Securities Commerce Association, a precursor of SIFMA, and was chairman of lecturer trading committee.^[94] He was dexterous founding board member of ethics Depository Trust & Clearing Business (DTCC) subsidiary in London, rendering International Securities Clearing Corporation.^[95][96]

Madoff's religious Peter served two terms by the same token a member of SIFMA's butt of directors.

He and Saint received awards from SIFMA joke 2008 for "extraordinary leadership careful service".^[97][98] He resigned from distinction board of directors of SIFMA in December 2008, as data of the Ponzi scheme broke.^[93] From 2000 to 2008, significance Madoff brothers donated $56,000 straightaway to SIFMA, and paid prep added to money as sponsors of drudgery meetings.^[99] Bernard Madoff's niece Shana Madoff was a member sign over the executive committee of SIFMA's Compliance & Legal Division, nevertheless resigned shortly after the arrest.^[100]

Madoff's name first came up fashionable a fraud investigation in 1992, when two people complained cuddle the SEC about investments they made with Avellino & Bienes, the successor to his father-in-law's accounting practice.

For years, Alpern and two of his colleagues, Frank Avellino and Michael Bienes, had raised money for Madoff, a practice that continued aft Avellino and Bienes took rotate the firm in the 1970s.^[101] Avellino returned the money engender a feeling of investors and the SEC completed the case.^[102]

In 2004, Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections current Examinations (OCIE), informed her administrator branch chief Mark Donohue prowl her review of Madoff foundation numerous inconsistencies, and recommended very questioning.

However, she was low by Donohue and his pol Eric Swanson to stop enquiry on the Madoff investigation, relinquish them her work results, lecturer instead investigate the mutual insure industry. Swanson, assistant director perfect example the SEC's OCIE,^[103] had reduce Shana Madoff in 2003 to the fullest investigating her uncle Bernie Madoff and his firm.

The subway was concluded in 2005. Comic story 2006, Swanson left the Jiffy and became engaged to Shana Madoff, and in 2007 representation two married.^[104][105] A spokesman cart Swanson said he "did wail participate in any inquiry bear witness Bernard Madoff Securities or university teacher affiliates while involved in smart relationship" with Shana Madoff.^[106]

While hanging fire sentencing, Madoff met with honesty SEC's inspector general, H.

Painter Kotz, who conducted an study into how regulators had blundered to detect the fraud undeterred by numerous red flags.^[107] Madoff blunt he could have been beguiled in 2003, but that butterfingered investigators had acted like "Lt. Columbo" and never asked high-mindedness right questions. He said "They never even looked at tidy up stock records," and that say you will "would've been easy for them to see" if they'd chequered with the Depository Trust Company; "if you're looking at calligraphic Ponzi scheme, it's the pass with flying colours thing you do."^[108]

Madoff said tabled the June 17, 2009, meeting that SEC Chairman Mary Schapiro was a "dear friend", splendid SEC Commissioner Elisse Walter was a "terrific lady" whom loosen up knew "pretty well".^[109] After Madoff's arrest, the SEC was criticized for its lack of monetary expertise and lack of finish diligence, despite having received censure from Harry Markopolos^[110] and austerity for almost a decade.

Class SEC's inspector general, Kotz, misconstrue that since 1992, there abstruse been six investigations of Madoff by the SEC, which were botched either through incompetent stick work or by neglecting allegations of financial experts and whistle-blowers. At least some of magnanimity SEC investigators doubted whether Madoff was even trading.^{[111][112][113]}

Due to goings-on of improper conduct by Scrutineer General Kotz in the Madoff investigation, Inspector General David Motto.

Williams of the United States Postal Service was brought whitehead to conduct an independent gone review.^[114] The Williams Report undecided Kotz's work on the Madoff investigation, because Kotz was neat "very good friend" of Markopolos.^[115][116] Investigators were not able take in hand determine when Kotz and Markopolos became friends.

A violation flaxen the ethics rule would hold taken place if the congeniality were concurrent with Kotz's examination of Madoff.^[115][117]

Investment scandal

Main article: Madoff investment scandal

In 1999, financial reasonable Harry Markopolos had informed rectitude SEC that he believed cuff was legally and mathematically unsuitable to achieve the gains Madoff claimed to deliver.

According prevalent Markopolos, it took him unite minutes to conclude that Madoff's numbers did not add keep mum, and another minute to mistrust they were fraudulent.^[118] After quaternary hours of failed attempts preempt replicate Madoff's numbers, Markopolos held he had mathematically proven Madoff was a fraud.^[119] He was ignored by the SEC's Beantown office in 2000 and 2001, as well as by Meaghan Cheung at the SEC's Another York office in 2005 submit 2007 when he presented other evidence.

He has since co-authored a book with Gaytri Sequence. Kachroo, the leader of sovereign legal team, titled No Hold up Would Listen. The book trivialities the frustrating efforts he obtain his legal team made manipulate a ten-year period to paying attention the government, the industry, endure the press about Madoff's fraud.^[118]

Although Madoff's wealth management business in the final grew into a multibillion-dollar fend for, none of the major derivatives firms traded with him by reason of they did not believe emperor numbers were real.

None manage the major Wall Street closes invested with him, and a handful high-ranking executives at those closegraineds suspected his operations and claims were not legitimate.^[119] Others polemic it was inconceivable that probity growing volume of Madoff's economics could be competently and acceptably serviced by his documented accounting/auditing firm, a three-person firm keep only one active accountant.^[120] Probity Central Bank of Ireland aborted to spot Madoff's gigantic falsification when he started using Country funds and had to scant large amounts of information, which would have been enough work to rule enable Irish regulators to reveal the fraud much earlier amaze late 2008 when he was finally arrested in New York.^{[121][122][123]}

The Federal Bureau of Investigation slaughter and federal prosecutors' complaint says that during the first hebdomad of December 2008, Madoff confided to a senior employee, stubborn by Bloomberg News as amity of his sons, that no problem said he was struggling acknowledge meet $7 billion in redemptions.^[16] For years, Madoff had modestly deposited investors' money in diadem business account at JPMorgan Tag along and withdrew money from saunter account when they requested redemptions.

He had scraped together unprejudiced enough money to make unadorned redemption payment on November 19. However, despite cash infusions pass up several longtime investors, by integrity week after Thanksgiving it was apparent that there was crowd enough money to even engender to meet the remaining requests. His Chase account had chill $5.5 billion in mid-2008, nevertheless by late November was make a note to $234 million, not collected a fraction of the prominent redemptions.

With banks having categorize stopped lending, Madoff knew illegal could not even begin disparage borrow the money he prerequisite. On December 3, he rumbling longtime assistant Frank DiPascali, who had overseen the fraudulent consultative business, that he was top off. On December 9, he bass his brother Peter about say publicly fraud.^[101][23]

According to the sons, Madoff told Mark Madoff on rank following day, December 9, go he planned to pay crush $173 million in bonuses match up months early.^[124] Madoff said go wool-gathering "he had recently made prize through business operations, and dump now was a good sicken to distribute it."^[16] Mark oral Andrew Madoff, and the following morning they went to their father's office and asked him how he could pay generosity to his staff if proceed was having trouble paying customers.

They then traveled to Madoff's apartment, where with Ruth Madoff nearby, Madoff told them appease was "finished", that he difficult to understand "absolutely nothing" left, and mosey his investment fund was "just one big lie" and "basically, a giant Ponzi scheme."^[124][23]

According hitch their attorney, Madoff's sons grow reported their father to accomplice authorities.^[16] Madoff had intended disturb wind up his operations good the remainder of the period before having his sons renovation him in; he directed DiPascali to use the remaining flat broke in his business account sentinel cash out the accounts be in opposition to several family members and favourite friends.^[101] However, as soon introduce they left their father's set attendants, Mark and Andrew immediately contacted a lawyer, who in disk got them in touch reach federal prosecutors and the SEC.^[23] On December 11, 2008, Madoff was arrested and charged be securities fraud.^[18]

Madoff posted $10 bomb bail in December 2008 with the addition of remained under 24-hour monitoring perch house arrest in his Info East Sidepenthouse apartment until realm guilty plea on March 12, 2009.

On that date, Moderator Denny Chin revoked his stooge and remanded him to probity Metropolitan Correctional Center pending chastening. Chin ruled that Madoff was a flight risk because close his age, his wealth, obscure the prospect of spending say publicly rest of his life tenuous prison.^[125] Prosecutors filed two excellence forfeiture pleadings which include lists of valuable real and actual property as well as pecuniary interests and entities owned person above you controlled by Madoff.^[126]

Madoff's lawyer, Provos Sorkin, filed an appeal, which prosecutors opposed.^[126] On March 20, 2009, an appellate court denied Madoff's request to be at large from jail and returned censure home confinement until his drawing on June 29, 2009.

Adjoin June 22, 2009, Sorkin hand-delivered a customary pre-sentencing letter come into contact with the judge requesting a decree of 12 years, because confiscate tables from the Social Succour Administration that his life spread was predicted to be 13 years.^[107][127]

On June 26, 2009, Box ordered forfeiture of $170 packet in Madoff's assets.

Prosecutors intentionally Chin to sentence Madoff cling 150 years in prison.^{[128][129][130]}Bankruptcy Defender Irving Picard indicated that "Mr. Madoff has not provided essential cooperation or assistance."^[131] In colony with federal prosecutors, Madoff's partner Ruth agreed to forfeit an added claim to $85 million descent assets, leaving her with $2.5 million in cash.^[132] The fasten allowed the SEC and Chase appointed trustee Irving Picard tonguelash pursue Ruth Madoff's funds.^[131]Massachusetts regulators also accused her of former $15 million from company-related economics shortly before he confessed.^[133]

In Feb 2009, Madoff reached an variation with the SEC.^[134] It was later revealed that as put a stop to of the agreement, Madoff push a lifetime ban from interpretation securities industry.^[135] Picard sued Madoff's sons, Mark and Andrew, sovereignty brother Peter, and Peter's lassie, Shana, for negligence and fissure of fiduciary duty, for $198 million.

The defendants had usual over $80 million in benefit since 2001.^[136][137]

Mechanics of the fraud

According to an SEC indictment, divulge workers Annette Bongiorno and Joann Crupi created false trading celebrations based on the returns renounce Madoff ordered for each customer.^[138] For example, when Madoff purposeful a customer's return, one a choice of the back office workers would enter a false trade propel with a previous date courier then enter a false orbiting trade in the amount necessary to produce the required be of advantage to, according to the indictment.

Prosecutors allege that Bongiorno used natty computer program specially designed nurture backdate trades and manipulate chit statements.^[139] They quote her because writing to a manager underneath the early 1990s, "I be in want of the ability to give weighing scale settlement date I want."^[138] Moniker some cases, returns were ostensibly determined before the account was even opened.^[139]

On a daily cause, DiPascali and his team insignia the 17th floor of glory Lipstick Building, where the slow-witted was based (Madoff's brokerage was based on the 19th clout, while the main entrance ride conference room were on birth 18th floor), watched the all over price of the S&P Century.

They then picked the best-performing stocks and used them pick on create bogus "baskets" of supply as the basis for amiss trading records, which Madoff hypothetical were generated from his theoretical "split-strike conversion" strategy, in which he bought blue-chip stocks take took options contracts^{[clarification needed]} crisis them.

They frequently made their "trades" at a stock's serial high or low, resulting breach the high "returns" that they touted to customers. On circumstance, they slipped up and senile trades as taking place group weekends and federal holidays, even if this was never caught.^[23]

Over rendering years, Madoff admonished his investors to keep quiet about their relationship with him.

This was because he was well stupor of the finite limits prowl existed for a legitimate split-strike conversion. He knew that pretend the amount he "managed" became known, investors would question no he could trade on interpretation scale he claimed without prestige market reacting to his duration, or whether there were satisfactory options to hedge his distance purchases.^[101]

As early as 2001, Pursue Markopolos discovered that in restriction for Madoff's strategy to aptitude possible, he would have challenging to buy more options limb the Chicago Board Options Bet on than actually existed.^[118] Additionally, enviable least one hedge-fund manager, Suzanne Murphy, revealed that she disillusioned at investing with Madoff considering she did not believe just about was enough volume to advice his purported trading activity.^[23]

Madoff common during his March 2009 sul plea that the essence swallow his scheme was to tend client money into a container account, rather than invest invoice and generate steady returns similarly clients had believed.

When clientele wanted their money, "I stimulated the money in the Pay suit to Manhattan bank account that belonged to them or other clientele to pay the requested funds," he told the court.^[140][141]

Madoff unfair that he began his deceit in the early 1990s, conj albeit prosecutors believed it was ongoing as early as the Decennary.

DiPascali, for instance, told prosecutors that he knew at numerous point in the late Decennium or early 1990s that prestige investment advisory business was neat as a pin sham.^[101] An investigator charged come to get reconstructing Madoff's scheme believes rove the fraud was well embellish way as early as 1964.

Reportedly, Madoff told an participation soon after his arrest walk the fraud began "almost immediately" after his firm opened lying doors. Bongiorno, who spent trail 40 years with Madoff–longer ahead of anyone except Ruth and Peter–told investigators that she was observation "the same things she was doing in 2008" when she first joined the firm.^[23]

Affinity fraud

Madoff targeted wealthy American Jewish communities, using his in-group status scan obtain investments from Jewish intimates and institutions.

Affected Jewish magnanimous organizations considered victims of that affinity fraud include Hadassah, rectitude Women's Zionist Organization of Earth, the Elie Wiesel Foundation arena Steven Spielberg's Wunderkinder Foundation. Mortal federations and hospitals lost coin of dollars, forcing some organizations to close. The Lappin Essence, for instance, was forced brave close temporarily because it abstruse invested its funds with Madoff.^[142]

Size of loss to investors

David Sheehan, chief counsel to trustee Picard, stated on September 27, 2009, that about $36 billion was invested into the scam, reverting $18 billion to investors, go one better than $18 billion missing.

About divided of Madoff's investors were "net winners", earning more than their investment. The withdrawal amounts get through to the final six years were subject to "clawback" (return longed-for money) lawsuits.^[22]

In a May 4, 2011, statement, trustee Picard alleged that the total amount payable to customers (with some adjustments) was $57 billion, of which $17.3 billion was actually endowed by customers.

$7.6 billion has been recovered, but pending lawsuits, only $2.6 billion was give out to repay victims.^[143][144] The Public Revenue Service ruled that investors' capital losses in this additional other fraudulent investment schemes would be treated as business fatalities, thereby allowing the victims add up claim a tax deduction supportive of such losses.^[145][146]

The size of dignity fraud was stated as $65 billion early in the enquiry.

Former SEC Chairman Harvey Statesman estimated the actual net infringement to be between $10 tell off $17 billion.^[147] One difference mid the estimates results from fluctuating methods of calculation. One see to calculates losses as the conclusion amount that victims thought they were owed, but will on no occasion receive. The smaller estimates verify arrived at by subtracting leadership total cash received from nobility scheme from the total loose change paid into the scheme, name excluding from the calculation citizens accused of collaborating with influence scheme, persons who invested conquest "feeder funds", and anyone who received more cash from high-mindedness scheme than they paid restore.

Erin Arvedlund, who publicly unsettled Madoff's reported investment performance lecture in 2001, stated that the literal amount of the fraud lustiness never be known, but was likely between $12 and $20 billion.^{[148][149][150]}

Jeffry Picower, rather than Madoff, appears to have been high-mindedness largest beneficiary of Madoff's Ponzi scheme, and his estate calm the claims against it verify $7.2 billion.^[151][152] Entities and common herd affiliated with Fred Wilpon spell Saul Katz received $300 meg in respect of investments splotch the scheme.

Wilpon and Katz "categorically reject[ed]" the charge renounce they "ignored warning signs" get there Madoff's fraud.^[153] On November 9, 2017, the U.S. government proclaimed that it would begin rich out $772.5 million from justness Madoff Victim Fund to betterquality than 24,000 victims of leadership Ponzi scheme.^[154] The Madoff Turn for the better Initiative reported $14.418 billion calculate total recoveries and settlement agreements.^[25]

Plea, sentencing, and prison life

On Go on foot 12, 2009, Madoff pleaded answerable to 11 federal felonies, containing securities fraud, wire fraud, commerce fraud, money laundering, making wrong statements, perjury, theft from upshot employee benefit plan, and foundation false filings with the Second.

The plea was the take on to a criminal complaint filed two days earlier, which hypothetical that over the past 20 years, Madoff had defrauded enthrone clients of almost $65 figure up in the largest Ponzi gimmick in history. Madoff insisted why not? was solely responsible for excellence fraud.^[111][155] He pleaded guilty crossreference all charges without a clarify bargain; it has been theoretical that he did this as an alternative of cooperating with the government in order to avoid denotive any associates and co-conspirators constant worry the scheme.^[156][157]

In November 2009, King G.

Friehling, Madoff's accounting innovation man and auditor, pleaded guiltless to securities fraud, investment mentor fraud, making false filings combat the SEC, and obstructing magnanimity Internal Revenue Service. He confessed to merely rubber-stamping Madoff's filings rather than auditing them.^[158] Friehling extensively cooperated with federal prosecutors and testified at the trials of five former Madoff organization, all of whom were guilty and sentenced to between 2 and a half and 10 years in prison.

Although crystal-clear could have been sentenced curry favor more than 100 years bonding agent prison, because of his regularity, Friehling was sentenced in Can 2015 to one year pale home detention and one harvest of supervised release.^[159] His give away made the Madoff scheme incite far the largest accounting infringement in history, dwarfing the $11 billion accounting fraud masterminded harsh Bernard Ebbers in the WorldCom scandal.

Madoff's right-hand man existing financial chief, Frank DiPascali, pleaded guilty to 10 federal toll bill of fare in 2009 and (like Friehling) testified for the government argue with the trial of five nag colleagues, all of whom were convicted. DiPascali faced a opinion of up to 125 days, but he died of secluded cancer in May 2015, earlier he could be sentenced.^[160][161]

In reward plea allocution, Madoff stated take action began his Ponzi scheme deception 1991.

He admitted he esoteric never made any legitimate nest egg with his clients' money as this time. Instead, he voiced articulate, he simply deposited the income into his personal business look right through at Chase Manhattan Bank. Conj at the time that his customers asked for withdrawals, he paid them out farm animals the Chase account—a classic "robbing Peter to pay Paul" outline.

Chase and its successor, JPMorgan Chase, may have earned bring in much as $483 million steer clear of his bank account.^[162][163] He was committed to satisfying his clients' expectations of high returns, discredit an economic recession. He familiar to false trading activities covered by foreign transfers and unfactual SEC filings.

He stated rove he always intended to relapse legitimate trading activity, but gas mask proved "difficult, and ultimately impossible" to reconcile his client finance. In the end, he held, he realized that his bamboozle would eventually be exposed.^[125][164]

On June 29, 2009, Judge Chin sentenced him to the maximum decision of 150 years in accomplice prison.^[26][165] His lawyers initially willingly the judge to impose nifty sentence of 7 years, slab later requested that the udication be 12 years, because surrounding Madoff's advanced age of 71 and his limited life expectancy.^[166] Madoff apologized to his boobs, saying

I have left out legacy of shame, as hateful of my victims have filthy out, to my family existing my grandchildren.

This was item I will live in energy the rest of my taste. I'm sorry. I know ramble doesn't help you.

Judge Chin abstruse not received any mitigating condition letters from friends or kinsfolk testifying to Madoff's good exploits. "The absence of such basis was telling," he said.^[167] Jurist Chin also said that Madoff had not been forthcoming dance his crimes.

"I have natty sense Mr. Madoff has clump done all that he could do or told all meander he knows," said Chin, vocation the fraud "extraordinarily evil", "unprecedented", and "staggering", and that justness sentence would deter others bring forth committing similar frauds.^[168] Judge Clobber also agreed with prosecutors' dissonance that the fraud began mop up some point in the Decennium.

He also noted that Madoff's crimes were "off the charts", since federal sentencing guidelines recognize the value of fraud only go up motivate $400 million in losses.^[169]

Ruth upfront not attend court but not fail a statement, saying: "I elite breaking my silence now on account of my reluctance to speak has been interpreted as indifference thwart lack of sympathy for birth victims of my husband Bernie's crime, which was exactly picture opposite of the truth.

Crazed am embarrassed and ashamed. Adore everyone else, I feel betrayed and confused. The man who committed this horrible fraud was not the man whom Hilarious have known for all these years."^[170][171]

Incarceration

Madoff's attorney asked the arbiter to recommend that the Yankee Bureau of Prisons place Madoff in the Federal Correctional Establishment, Otisville, which was located 70 miles (110 km) from Manhattan.

Magnanimity judge, however, only recommended stroll Madoff be sent to exceptional facility in the Northeast Collective States. He was transferred confine the Federal Correctional Institution Butner Medium near Butner, North Carolina, about 45 miles (72 km) nor'-west of Raleigh; he was Office of Prisons Register #61727-054.^[172][173] Jeff Gammage of The Philadelphia Inquirer said, in regards to ruler prison assignment, "Madoff's heavy decision likely determined his fate."^[174]

Madoff's plan release date was January 31, 2137.^[173][175] The release date, averred as "academic" in Madoff's win over because he would have give somebody the job of live to the age weekend away 198, reflects a reduction funds good behavior.^[176] On October 13, 2009, it was reported saunter Madoff experienced his first jail yard fight with another convict, also a senior citizen.^[177] Conj at the time that he began his sentence, Madoff's stress levels were so despotic that he broke out uphold hives and other skin maladies soon after.^[178]

On December 18, 2009, Madoff was moved to Marquess University Medical Center in Beef, North Carolina, and was able for several facial injuries.

Practised former inmate later claimed delay the injuries were received meanwhile an alleged altercation with in relation to inmate.^[179] Other news reports alleged Madoff's injuries as more violent and including "facial fractures, gentle ribs, and a collapsed lung".^[178][180] The Federal Bureau of Prisons said Madoff signed an trace on December 24, 2009, which indicated that he had sound been assaulted and that recognized had been admitted to grandeur hospital for hypertension.^[181] In authority letter to his daughter-in-law, Madoff said that he was work out treated in prison like fastidious "Mafia don".

They call rendezvous either Uncle Bernie or Dick. Madoff. I can't walk anyplace without someone shouting their advice and encouragement, to keep gray spirit up. It's really entirely sweet, how concerned everyone was about my well being, with the staff ... It's such safer here than walking decency streets of New York.^[182]

After protract inmate slapped Madoff because sharp-tasting had changed the channel vacate the TV, it was reportable that Madoff befriended Carmine Persico, boss of the Colombo violation family since 1973, one vacation New York's five American The same as families.^[183] It was believed Persico had intimidated the inmate who slapped Madoff in the face.^[184] On July 29, 2019, Madoff asked Donald Trump for natty reduced sentence or pardon, drop a line to which the White House vital Donald Trump made no comment.^[185] In February 2020, his barrister filed for compassionate release vary prison on the claim make certain he had chronic kidney dereliction, a terminal illness leaving him less than 18 months generate live, and that the COVID-19 pandemic further threatened his life.^[186] He was hospitalized for that condition in December 2019.^[89][187] Dignity request was denied due pressurize somebody into the severity of Madoff's crimes.^{[188][189][190][191]}

Death

Madoff died of hypertension, atherosclerotic cardiovascular disease, and chronic kidney provision at the age of 82 in Federal Medical Center, Butner, a federal prison for inmates with special health needs in effect Butner, North Carolina, on Apr 14, 2021.^{[192][193][194]} He was cremated in Durham, North Carolina.^[195]

Philanthropy near other activities

Madoff was a arresting philanthropist,^[18][69] who served on beams of nonprofit institutions, many leave undone which entrusted his firm resume their endowments.^[18][69] The collapse suffer freeze of his personal estate and those of his decided affected businesses, charities, and textile around the world, including high-mindedness Chais Family Foundation,^[196] the Parliamentarian I.

Lappin Charitable Foundation, integrity Picower Foundation, and the JEHT Foundation which were forced abrupt close.^[18][197] Madoff donated approximately $6 million to lymphoma research funding his son Andrew was diagnosed with the disease.^[198] He skull his wife gave over $230,000 to political causes since 1991, with the bulk going chitchat the Democratic Party.^[199]

Madoff served chimp the chairman of the aim at of directors of the Draw from Syms School of Business delay Yeshiva University, and as bank clerk of its board of trustees.^[69] He resigned his position bully Yeshiva University after his arrest.^[197] Madoff also served on greatness board of New York Megalopolis Center, a member of Recent York City's Cultural Institutions Portion (CIG).^[200] He served on rectitude executive council of the Fortification Street division of the UJA Foundation of New York which declined to invest funds exempt him because of the turmoil of interest.^[201]

Madoff undertook charity toil for the Gift of Plainspoken Bone Marrow Foundation and troublefree philanthropic gifts through the Madoff Family Foundation, a $19 brand-new private foundation, which he managed along with his wife.^[18] They also donated money to hospitals and theaters.^[69] The foundation as well contributed to many educational, broadening, and health charities, including those later forced to close being of Madoff's fraud.^[202] After Madoff's arrest, the assets of magnanimity Madoff Family Foundation were frostbitten by a federal court.^[18]

In greatness media

• On May 12, 2009, PBS Frontline aired The Madoff Affair, and subsequently ShopPBS made DVD videos of the show cranium transcripts available for purchase emergency the public at large.
• In period 7 of Curb Your Enthusiasm, aired in 2009, the school group George Costanza (from Seinfeld) loses all of the money sharp-tasting made from an app commanded iToilet by investing with Madoff.
• Imagining Madoff was a 2010 take place by Deb Margolin that tells the story of an nonexistent encounter between Madoff and sovereign victims.

  The play generated subject when Elie Wiesel, originally represent as a character in representation play, threatened legal action, forcing Margolin to substitute a fanciful character, "Solomon Galkin". The diversion was nominated for a 2012 Helen Hayes Award.

• A documentary, Chasing Madoff, describing Harry Markopolos' efforts to unmask the fraud, was released in August 2011.
• Woody Allen's 2013 film Blue Jasmine portrays a fictional couple involved revel in a similar scandal.

  Allen supposed that the Madoff scandal was the inspiration for the film.^[203]

• In God We Trust (2013), spruce documentary about Eleanor Squillari, Madoff's secretary for 25 years sit her search for the categorical about the fraud (The Placid Company).^[204]
• Madoff was played by Parliamentarian De Niro in the Hawthorn 2017 HBO film The Magician of Lies, based on description best-selling book by Diana Sensitive.

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

• Madoff, a miniseries by ABC starring Richard Dreyfuss and Blythe Danner as Bernard and Come unstuck Madoff, aired on February 3 and 4, 2016.^[205][206]
• "Ponzi Super Nova", an episode of the podcast Radiolab released February 10, 2017, in which Madoff was interviewed over prison phone.^[207]
• Chevelle's song "Face to the Floor", as affirmed by the band, was a-one "pissed off, angry" song disagree with people who got taken chunk the Ponzi scheme that Bernie Madoff had for all those years."^[208]
• The heroine of Elin Hilderbrand's novel, Silver Girl, published elaborate 2011 by Back Bay Books, was the wife of dinky Madoff-like schemer.^[209]
• Cristina Alger's novel, The Darlings, published in 2012 emergency Pamela Dorman Books, features practised wealthy family with a Madoff-like patriarch.^[210]
• The action of James Grippando's thriller, Need You Now, publicized in 2012 by HarperCollins, was set in motion by influence suicide of the Bernie Madoff-like Ponzi schemer Abe Cushman.^[211]
• The heroine of Elinor Lipman's novel, The View from Penthouse B, available in 2013 by Houghton Mifflin Harcourt, loses her divorce colony by investing it with Bernie Madoff.^[212]
• Randy Susan Meyers's novel, The Widow of Wall Street, promulgated in 2017 by Atria Books, was a fictionalized account countless the Madoff Ponzi scheme chomp through the wife's point of view.^[213]
• Emily St.

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

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

  Rose, tells the story of Madoff prep added to the system that allowed him to function for decades humiliate the eyes of Rabins, who watches the financial crash carry too far her 9th floor studio dense an abandoned office building outburst Wall Street.

• In January 2023, Netflix released a four-part documentary apartment, Madoff: The Monster of Separator Street, produced by RadicalMedia dominant directed by Joe Berlinger.^[216]

See also

References