Bernard Madoff, who perpetrated the biggest investor fraud in U.S. history, has died in prison at age 82.
Bernie Madoff defrauded investors of nearly $20 billion U.S. in the largest Ponzi scheme ever uncovered by U.S. regulators. He died at the Butner Federal Correctional Complex in Butner, North Carolina, where he had been serving a 150-year sentence since 2009. He requested compassionate early release, citing end-stage kidney disease, in February 2020 but the request was denied.
Like Charles Ponzi, whose 1920 con earned him a place in the annals of crime, Madoff delivered great returns to his clients, when in fact he was paying existing investors with money from new ones.
However, unlike Ponzi, who soared and fell in one year, Madoff achieved a level of respect among finance professionals and was actually Chairman of the NASDAQ stock exchange from 1990 through 1993. He kept his Ponzi scheme going for at least 15 years.
His thousands of clients entrusted him with more than $19 billion U.S. in principal and were led to believe, through fake statements and trade confirmations, that they had almost $65 billion U.S. among them in their accounts. The trustee appointed to unwind the accounts recovered more than $14.4 billion U.S. to partially reimburse clients who lost money.
Madoff’s investors included the rich and powerful, people such as Fred Wilpon, majority owner of the New York Mets; husband-and-wife actors Kevin Bacon and Kyra Sedgwick; director Steven Spielberg and Holocaust survivor Elie Wiesel.
The fraud collapsed in December 2008, when plunging equity markets prompted clients to seek more withdrawals than Madoff could accommodate. His sons Andrew and Mark notified the Federal Bureau of Investigation (FBI) that their father had confessed to them.
Madoff pleaded guilty in March 2009 to fraud, money laundering, perjury and theft. In court, and in later interviews from prison, he insisted that he had run a genuine investment business for many years before finding himself unable to maintain the generous returns his clients had come to expect. Prosecutors said the fraud began in the 1980s.
The oldest of Madoff’s two sons, Mark Madoff, who had been head of sales at the firm his father ran, killed himself on December 11, 2010, the second anniversary of his father’s arrest. In September 2014, Madoff’s younger son, Andrew, died of cancer. The son’s deaths was the final straw for Madoff’s wife, Ruth, who broke off all communications with her imprisoned husband.
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