Rise and fall of America’s biggest Ponzi conman Bernie Madoff

Bernie Madoff, the man behind the biggest and most devastating Ponzi scheme in history that robbed tens of thousands of victims worldwide of $65 billion, went from a high-flying Wall Street financier to living out his dying days in a North Carolina prison.

For decades, Madoff – a former chairman of the Nasdaq stock market – enjoyed an image as a self-made financial guru whose good fortune defied market fluctuations. He attracted a devoted legion of investment clients from Florida retirees to the rich and famous including director Steven Spielberg, actor Kevin Bacon and former New York Mets owner Fred Wilpon. 

But it all came crashing down in 2008 after his investment advisory business was exposed as a multibillion-dollar Ponzi scheme that eradicated people’s fortunes – both rich and poor – and destroyed charities and foundations worldwide.

Madoff became so hated he had to wear a bulletproof vest to court after admitting to his crimes. 

His death on Wednesday, while serving a 150 year prison sentence at Butner Federal Correctional Complex, brings an end to his scandal-plagued life that saw a very steep rise and tragic fall. 

The epic downfall from his financial fraud not only destroyed the lives of his 37,000 victims but also that of his own family, including his two sons who ended up turning their father over to the authorities. 

For decades, Bernie Madoff – a former chairman of the Nasdaq stock market – enjoyed an image as a self-made financial guru whose good fortune defied market fluctuations. But it all came crashing down in 2008 after his investment advisory business was exposed as a multibillion-dollar Ponzi scheme that eradicated people’s fortunes – both rich and poor

One of his sons, Mark, killed himself on the second anniversary of his father’s arrest in 2010. Madoff’s other son, Andrew, died from cancer at age 48. His wife Ruth is still alive and has since vanished to Greenwich, Connecticut.

Madoff, who was born in 1938 in a lower-middle-class Jewish neighborhood in Queens, New York, became a legend in the financial world regarding the story of his rise to prominence. His father, Ralph, was a stockbroker and plumber and his grandparents had emigrated to the US from Eastern Europe. 

He and his brother Peter set off for Wall Street in 1960 with a few thousand dollars saved from working as a lifeguard and installing sprinklers.  

Madoff studied political science and then law before starting Bernard L. Madoff Investment Securities. By 1980, his firm occupied three floors of a midtown Manhattan high-rise. 

Initially, he – along with his brother – ran a business as middlemen between the buyers and sellers of penny stocks. His wife Ruth ran the books and his sons, once adults, went on to become executives. 

Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission on the system. Madoff served as the chair of NASDAQ three times in the 90s. 

But what the SEC never found out was that behind the scenes, in a separate office kept under lock and key, Madoff was secretly spinning a web of phantom wealth by using cash from new investors to pay returns to old ones. 

Authorities say that over the years, at least $13 billion was invested with Madoff. An old IBM computer cranked out monthly statements showing steady double-digit returns, even during market downturns. 

As of late 2008, before his arrest, the statements claimed investor accounts totaled $65 billion. 

The ugly truth: No securities were ever bought or sold. 

VICTIM: Kevin Bacon

VICTIM: Kevin Bacon

VICTIM: Steven Spielberg

VICTIM: Steven Spielberg

He attracted a devoted legion of investment clients from Florida retirees to the rich and famous including director Steven Spielberg (right), actor Kevin Bacon (left) and former New York Mets owner Fred Wilpon

VICTIM: Former New York Mets owner Fred Wilpon

VICTIM: Former New York Mets owner Fred Wilpon

VICTIM: Nobel Peace Prize winner and Holocaust survivor Elie Wiesel

VICTIM: Nobel Peace Prize winner and Holocaust survivor Elie Wiesel

Among his victims was Nobel Peace Prize winner and Holocaust survivor Elie Wiesel (right) and former New York Mets owner Fred Wilpon (left)

His clients, who included celebrities like famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax, said they had no idea.

Among them was Nobel Peace Prize winner and Holocaust survivor Elie Wiesel, who recalled meeting Madoff years earlier at a dinner where they talked about history, education and Jewish philosophy – not money.

Madoff ‘made a very good impression,’ Wiesel said during a 2009 panel discussion on the scandal. Wiesel admitted that he bought into ‘a myth that he created around him that everything was so special, so unique, that it had to be secret.’ 

Like many of his clients, Madoff and his wife enjoyed a lavish lifestyle. 

They had a $7 million Manhattan apartment, an $11 million estate in Palm Beach, Florida and a $4 million home on the tip of Long Island. They also had another home in the south of France, private jets and a yacht.

But it all came crashing down in the winter of 2008 with a dramatic confession at Madoff’s 12th-floor apartment on the Upper East Side. 

In a meeting with his sons, he confided that his business was ‘all just one big lie’ and that there was no money. 

They ignored his pleas to give him 24 hours to get the family’s affairs in order and turned him in the following day. A lawyer for the family contacted regulators, who alerted the federal prosecutors and the FBI. 

Madoff was in a bathrobe when two FBI agents arrived at his door unannounced on a December morning. He invited them in, then confessed after being asked ‘if there’s an innocent explanation,’ a criminal complaint said. 

Madoff responded: ‘There is no innocent explanation.’ 

He admitted he had finally been forced to come clean because all of his clients asked for redemption as a result of the 2008 financial crisis. 

Like many of his clients, Madoff and his wife Ruth enjoyed a lavish lifestyle. They had a $7 million Manhattan apartment, an $11 million estate in Palm Beach, Florida and a $4 million home on the tip of Long Island. They also had another home in the south of France, private jets and a yacht

Like many of his clients, Madoff and his wife Ruth enjoyed a lavish lifestyle. They had a $7 million Manhattan apartment, an $11 million estate in Palm Beach, Florida and a $4 million home on the tip of Long Island. They also had another home in the south of France, private jets and a yacht

Like many of his clients, Madoff and his wife Ruth enjoyed a lavish lifestyle. They had a $7 million Manhattan apartment, an $11 million estate in Palm Beach, Florida and a $4 million home on the tip of Long Island. They also had another home in the south of France, private jets and a yacht

Madoff with his two sons, Mark (left) and Andrew (center) in 2001, in the Hamptons. Mark and Andrew both worked with their father. Mark killed himself on the second anniversary of Madoff's arrest in December 2010, while Andrew died of lymphoma in 2014

Madoff with his two sons, Mark (left) and Andrew (center) in 2001, in the Hamptons. Mark and Andrew both worked with their father. Mark killed himself on the second anniversary of Madoff's arrest in December 2010, while Andrew died of lymphoma in 2014

Madoff with his two sons, Mark (left) and Andrew (center) in 2001, in the Hamptons. Mark and Andrew both worked with their father. Mark killed himself on the second anniversary of Madoff’s arrest in December 2010, while Andrew died of lymphoma in 2014

In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a midtown Manhattan high-rise. Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission on the system

In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a midtown Manhattan high-rise. Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission on the system

In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a midtown Manhattan high-rise. Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission on the system

As he had from the start, Madoff insisted in his plea that he acted alone – something the FBI never believed. 

As agents scoured records for evidence of a broader conspiracy and cultivated Madoff’s chief financial officer, Frank DiPascali, as a cooperator, the scandal turned Madoff into a pariah, evaporated life fortunes and wiped out charities.

It also pushed some investors to commit suicide. 

New York hedge fund executive Charles Murphy, whose fund lost $50 million in Madoff’s scheme, jumped from the 24th floor of the Sofitel New York Hotel in 2017. 

French financier Rene-Thierry Magon de la Villehuchet killed himself in Manhattan in 2008 after losing more than $1 billion in the Ponzi scheme.

A trustee was later appointed to recover funds from Madoff’s scheme – sometimes by suing hedge funds and other large investors who came out ahead – and divvying up those proceeds to victims. 

The search for Madoff’s assets ‘has unearthed a labyrinth of interrelated international funds, institutions and entities of almost unparalleled complexity and breadth,’ the trustee, Irving Picard, said in a 2009 report. 

The report said the trustee has located assets and businesses ‘of interest’ in 11 places: Great Britain, Ireland, France, Luxembourg, Switzerland, Spain, Gibraltar, Bermuda, the British Virgin Islands, the Cayman Islands, the Bahamas. More than 15,400 claims against Madoff were filed. 

Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was ‘deeply sorry and ashamed.’

After several months living under house arrest at his $7 million Manhattan penthouse apartment, he was led off to jail in handcuffs to scattered applause from angry investors in the courtroom at his sentencing in June 2009.

‘He stole from the rich. He stole from the poor. He stole from the in between. He had no values,’ former investor Tom Fitzmaurice told the judge at the sentencing. ‘He cheated his victims out of their money so he and his wife… could live a life of luxury beyond belief.’ 

One view of the sprawling Madoff penthouse in Manhattan on East 64th Street. It was sold in 2014 for $14.5million

One view of the sprawling Madoff penthouse in Manhattan on East 64th Street. It was sold in 2014 for $14.5million

One view of the sprawling Madoff penthouse in Manhattan on East 64th Street. It was sold in 2014 for $14.5million 

The Madoff’s palatial beachfront property in Montauk, Long Island. It was one of many homes the family owned 

The Madoffs also had property in Palm Beach, Florida, that was paid for with other people's money

The Madoffs also had property in Palm Beach, Florida, that was paid for with other people's money

The Madoffs also had property in Palm Beach, Florida, that was paid for with other people’s money

During the hearing, wrathful former clients stood to demand the maximum punishment. Madoff himself spoke in a monotone for about 10 minutes. At various times, he referred to his monumental fraud as a ‘problem,’ ‘an error of judgment’ and ‘a tragic mistake.’

He claimed he and his wife were tormented, saying she ‘cries herself to sleep every night, knowing all the pain and suffering I have caused.’

‘That’s something I live with, as well,’ he said.

Afterward, Ruth Madoff – often a target of victims’ scorn since her husband’s arrest – broke her silence that same day by issuing a statement claiming that she, too, had been misled by her high school sweetheart.

‘I am embarrassed and ashamed,’ she said. ‘Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.’

In a subsequent 60 Minutes interview, Ruth claimed she and her husband had tried to kill themselves on Christmas Eve 2008 after he was released on bond, saying they swallowed a large number of pills because they ‘couldn’t go on any more’.  

About a dozen Madoff employees and associates were charged in the federal case. Five went on trial in late 2013 and watched DiPascali take the witness stand as the government´s star witness.

DiPascali recounted for jurors how just before the scheme was exposed, Madoff called him into his office.

‘He’d been staring out the window the all day,’ DiPascali testified. ‘He turned to me and he said, crying, ‘I’m at the end of my rope… Don’t you get it? The whole goddamn thing is a fraud.”

New York hedge fund executive Charles Murphy, whose fund lost $50 million in Madoff's scheme, jumped from the 24th floor of the Sofitel New York Hotel in 2017

New York hedge fund executive Charles Murphy, whose fund lost $50 million in Madoff's scheme, jumped from the 24th floor of the Sofitel New York Hotel in 2017

French financier Rene-Thierry Magon de la Villehuchet killed himself in Manhattan in 2008 after losing more than $1 billion in the Ponzi scheme

French financier Rene-Thierry Magon de la Villehuchet killed himself in Manhattan in 2008 after losing more than $1 billion in the Ponzi scheme

New York hedge fund executive Charles Murphy, whose fund lost $50 million in Madoff’s scheme, jumped from the 24th floor of the Sofitel New York Hotel in 2017. French financier Rene-Thierry Magon de la Villehuchet killed himself in Manhattan in 2008 after losing more than $1 billion in the Ponzi scheme

In addition to the tens of thousands of victims, the Madoff family also took a severe financial hit: A judge issued a $171 billion forfeiture order in June 2009 stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife, Ruth, had claimed were hers. The order left her with $2.5 million.

Ruth has always maintained that she knew nothing of the fraud, despite doing the company books. 

The scandal also exacted a personal toll on the family: His son Mark committed suicide in 2010, Madoff´s brother, Peter, who helped run the business, was sentenced to 10 years in prison in 2012, despite claims he was in the dark about his brother´s misdeeds. 

Mark’s widow later blamed her father-in-law, telling ABC: ‘He couldn’t get out, he was so betrayed and so hurt by Bernie.

‘I hate Bernie Madoff. If I saw Bernie Madoff right now, I would tell him that I hold him fully responsible for killing my husband, and I’d spit in his face.’ 

Madoff’s other son, Andrew, died from cancer at age 48. 

Last year, Madoff’s asked a judge for compassionate release from prison claiming he was dying from kidney disease.

His attorneys said at the time that he had less than 18 months to live, was in a wheelchair and required round-the-clock care. 

He was denied by a judge who said he’d committed ‘one of the most egregious financial crimes’ in US history. 

Link hienalouca.com

Advertising:

Tips to Find Low Priced Luxury Holiday Package Deals Fast

For most families, it has already been a common practice to spend the Holiday season in a foreign location. This is caused by the aviation market changes which have given a lot of benefits for people who travel a lot. Airfares going to different tourist destinations are becoming more inexpensive. What does this mean? If there is a perfect time to purchase luxury holiday package deals, now it the right time! Based on the market trend nowadays, you can save both money and time when you go for a luxury holiday. There are countless offers that combine travel and accommodation in one package which is a lot cheaper than getting separate deals. Aside from that, it is also risky to individually book the services that you need for the vacation. You might end up missing out on some important details of the trip. Unlike when you take advantage of luxury holiday package deals, you can be sure that everything is organized meticulously and according to what you really need. Nonetheless, you would still need to carefully select the package that would fit your needs. Review the following tips in getting packages that are reasonably priced. · Normally, luxury tour packages include accommodation, flight travel and transportation to individual tourist destinations. It would be best to choose the complete package so you won’t have to worry about other vacation elements. In addition to that, these are the packages that have the biggest discounts. · You can get big mark down prices, if you will purchase more packages. It is not a bad idea to share the wonderful moment with your loved ones. By doing so, you would not only enjoy, you will also save more money. You can even use your savings for other activities on your vacation. · It would be best to know how much you are willing to pay for the luxury tour packages. You can already work around your budget. You have to stick to your budget. If not, you might end up spending a lot and you will be left with less money for your vacation. · Prices may vary depending on the destination of the tour. You can do a research about places that are attractive yet inexpensive. There are thousands of destinations and you just have to choose wisely. · There are packages that include recreational activities. This means that you are paying for all the activities when you purchase these packages. The right thing to do is to make sure that the activities that are included would be the ones that you really enjoy. There is no sense in paying for activities that will not really make your vacation memorable. If you are going with friends, you should also consider their preferences so that you can be sure that everyone will enjoy the trip. There are other ways on how you can be sure that you are getting the best deal for your luxury holiday vacation. No matter how you choose to do it, you have to get adequate information about the packages. This will help you determine whether it is worth the price.

(Total views: 63 Time, 1 visits per day)

Leave a Reply