Bernie Madoff Dies At 82
Bernie Madoff engineered the biggest Ponzi scheme in history. He was the financial director. He was eighty-two.
He died on Wednesday, confirmed to be serving a 150-year sentence at the Federal Medical Center in Butner, N.C.
As a fund manager Madoff defrauded tens of trillions of dollars from thousands of investors for almost two decades. His plan eradicated the savings of families, charities, local governments and college funding and at the time of his trial of 2009 he was so despised that he wore a bulletin evidence jacket from and to the Court.
Long before his name became synonymous with deception, it was kept on Wall Street in high regard.
He regularly had excellent returns from his brokerage, Bernard L. Madoff Investment Securities LLC and his customers – many in the Jewish community – included celebrities and rich philanthropists, as well as ordinary citizens.
Madoff’s reputation has been strengthened since the scheme came to light by his lush lifestyle with a yacht and properties in Palm Beach, the Hamptons and the southern part of France. The former chairman of NASDAQ described himself not only as a fantastic businessman, but also as a moral upright.
Financial reporter Diana Henriques, who wrote a book on the case, characterised Madoff’s scheme as manipulating not the greed of investors, but their fear in a Fresh Air interview in 2011.
“During several years of Madoff fraud, even in some of the most famous mutual funds, investors could make a lot more money,” she said. “But in return for the quality of Madoff’s returns, they were able to give up those bigger returns. He made them feel safe. He made them feel safe. Both of them felt they took a conservative decision.”
Madoff actually runs what prosecutors later characterized as the biggest Ponzi scheme in history and rewards old investors with new money.
Ron Stein, a non-profit organisation representing Madoff victims, said Madoff used their money simply as a “checking account,” spending nothing or in some cases very little.
In 2009, Madoff confessed to the scheme. He said in a statement that in the early 1990s he started false accounts because he felt obliged to meet the needs of his customers.
Bernie Madoff, Financier Behind Notorious Ponzi Scheme
“When I started the Ponzi scheme, I thought it would end shortly and I and my customers could be removed from the scheme,” he said. “However, that was hard and eventually unlikely, and I knew over the years that my arrest and this day were inevitable.”
Instead of saving, Madoff said he deposited client funds in the Chase Manhattan Bank account and borrowed from that account to repay those who requested redemptions. He said that he had used many tactics over the years to conceal this, including the filing of false financial statements with the Securities and Exchange Commission and cables between the United States and the United Kingdom in order to establish the impression of securities transactions.
During the financial crisis of 2008, the scheme failed and could no longer draw new investors and so many people needed capital at once. Madoff admitted to his wife and sons and that December was arrested by the FBI.
In 2009, at the age of 71, he pleaded guilty to 11 felony charges. These included fraud in shares, investment advisor fraud, mail fraud, cable fraud, laundering and perjury. The sum prosecution said “flowed into the main account to carry out the Ponzi scheme” and ordered assets worth more than $170 billion to be forfeited.
In 2009, U.S. Judge Denny Chin sentenced Madoff to 150 years in jail, a decision he said sent a “extraordinarily evil message of his crimes and that this kind of system corruption is not just a bloodless, paper criminal, but rather a shocking felony.”
Hundreds of victims wrote before the court to explain the devastating effects of their losses, Chin said, and after the scheme had been exposed, two investors died of suicide.
As NPR stated during the trial, Madoff did not display any emotion during the evidence of 9 victims, but offered his family apologies to those affected, stating that for the rest of my life he will “deal with this agony, this torment.”
Similarly, the effect has been enduring and life-changing for many of his victims.
One of the people who gave testimony at court was Miriam Siegman, who claimed she lost all of her pension and savings.
“He’s sent off and we’re sentenced to life. That’s an awful phrase, “At the time, she told NPR. “It’s a phrase of wrath, embarrassment and incapacity to take care of myself in my old age.”
One survivor told NPR in 2018 that he was planning to retire when he heard that his nest egg and his elderly mother had left and that for ten more years he had to go back to work. Another spoke of severely reducing expenditure and considering suicide, citing his fear of “old and poor in America.”
The influence was also felt on the family of Madoff. Some of his family members worked in his firm and claimed not to be aware of the fraud before public scrutiny. His son, Mark, who insisted for a long time on not playing any part in the scheme, died in 2010 from suicide. After a conviction, his wife, once a common character in society, became solitary and said that “the man who committed this terrible fraud was not the man I knew for all these years.”
“Bernie lived with guilt and remorse for his crimes until his death,” Brandon Sample, the attorney of Madoff, said in a statement on Wednesday. “While Bernie was convicted of crimes, he was still a father and a husband, to describe who he was. He was an intellectual and a soft spoken person. Bernie wasn’t fine by all way. But there is no guy.”
Last February, Sample submitted a motion for compassionate release stating, with a lifespan of fewer than 18 months, that Madoff was suffering from renal failure and other chronic conditions. Chin, a U.S. circuit judge now, refused the application.
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