The main brain of the largest investment fraud in the nation was 82

Bernard Madoff, mastermind of the largest investor fraud in U.S. history, snatched tens of thousands of customers for up to $ 65 billion, died early Wednesday, The Associated Press reported. He was 82 years old.

Madoff died at the Federal Medical Center in Butner, North Carolina, apparently from natural causes, the AP reported, citing an unidentified person familiar with the matter. April 29 would have turned 83 years old.

Madoff was serving a 150-year sentence in prison, where he had been treated for what his lawyer called terminal kidney disease.

In 2009 he pleaded guilty to a scheme that investigators said began in the early 1970s and defrauded up to 37,000 people in 136 countries over four decades when Madoff was arrested on December 11, 2008, after that his two sons should take care of him. Among the victims were famed director Steven Spielberg, actor Kevin Bacon, former New York Mets owner Fred Wilpon, Hall of Fame pitcher Sandy Koufax and Nobel Peace Prize winner Elie Weisel, and common investors. , like Burt Ross, who lost $ 5 million. .

Madoff insisted the fraud did not begin until the early 1990s, when, he said, “the market stagnated due to the onset of the recession and the Gulf War.”

In a 2013 email to CNBC from prison, Madoff claimed that the market breakup that started the Great Recession caused his scam.

“I thought this would be just a short-term trade that could be offset once the market became receptive,” he wrote. “The rest is my tragic story of never being able to recover.”

In fact, according to investigators, Madoff did not run any operations for his consulting clients for years. Instead of using the so-called split strike conversion strategy as he claimed, he simply deposited investors ’funds in a Chase bank account, paying new customers with previous customer funds (a classic pyramid scheme) and providing his customers with a fake account. statement. The “returns on investment” that appear in these statements (a total of about $ 50 billion) were pure fiction.

The Bernard L. Madoff Investment Securities scandal shattered investor confidence, which was already damaged by the financial crisis. And it brought about radical changes to the Securities and Exchange Commission, which lost the fraud for years despite repeated warnings, including those from independent investigator Harry Markopolos, who set out to analyze Madoff’s unlikely investments and declared them fraudulent already. in 2000.

In a subsequent investigation by the agency’s inspector general, H. David Kotz, it was found that, instead of following clear evidence of fraud, SEC agents decided to take Madoff’s word that his operation it was legitimate.

“When Madoff provided evasive or contradictory answers to important questions in the testimony, they simply accepted his explanations as plausible,” Kotz wrote.

Last June, a judge denied a compassionate release request and said Madoff committed “one of the most egregious financial crimes of all time” and that “there are still many people who suffer.”

Bernard Lawrence Madoff was born in Queens, New York, on April 29, 1938, the son of Sylvia and Ralph Madoff, a plumber who became a stockbroker.

For more than 50 years, Bernie Madoff was recognized on Wall Street, a large money manager who founded his own company at age 22 and became a non-executive chairman of the Nasdaq in 1990. The aid was attributed to development of some market systems and structures that moved the stock market beyond the trading base and led to modern e-commerce.

But Madoff’s life fell in 2008, during the depths of the financial crisis.

Flooded with rescue requests from his clients, Madoff was unable to continue the scam. On December 10, 2008, he confessed to his sons, Mark and Andrew, that the investment advisory business was a lie. Madoff hoped to gain time by distributing hundreds of millions of dollars in bonuses to employees and then ending the signing. But Mark and Andrew, who were senior executives in the firm’s business operation – operating separately from the fraudulent advisory business – would have none and alerted local authorities.

A day later, on December 11, 2008, the FBI attacked its offices in the lipstick building on Midtown Manhattan Third Avenue.

On March 12, 2009, Madoff pleaded guilty to 11 federal offenses and admitted to operating the largest private Ponzi scheme in history. Three months later he was sentenced to the maximum sentence: 150 years in prison with a restitution of $ 170 billion.

In court, he insisted that his whole idea was that his family knew nothing, even though once his wife, Ruth, had kept the books, his children were senior officers and his younger brother, Peter, was the head of compliance.

But a trustee appointed to track funds for investors did not buy it. Irving H. Picard sued dozens of people and entities, including Madoff’s relatives, alleging they knew about the fraud or turned a blind eye while making millions of dollars in profits.

For the eldest son Mark, the suspicion was too great. In 2010, two years after the day his father was arrested, he became the third suicide-related suicide. Four years later, Andrew died of lymphoma at the age of 48.

Picard eventually came to settlements with his children’s estates and with Ruth Madoff, who has continued to deny any knowledge of the fraud and apparently lives modestly in Connecticut.

In the end, in addition to Madoff, more than a dozen individuals, including Peter Madoff, were convicted of federal crimes, but none of the others were charged with knowing fraud. JPMorgan Chase, Madoff’s main bank, paid $ 2.6 billion to the U.S. government and Madoff victims in 2014 to settle allegations that it did not maintain proper controls. After Chase instituted some unspecified reforms, prosecutors dropped the charges against the bank.

By mid-2020, Picard had recovered more than $ 14 billion for Madoff’s customers, or about $ 75 for every dollar of capital invested, a figure typically unheard of in a Ponzi scheme. From prison, Madoff repeatedly tried to take over the recoveries, claiming he was pressuring his senior investors to return some of their money.

“Those parties were well aware of the incriminating evidence he possessed about his complicit activity and prudently filed agreements,” he wrote in 2013.

But Picard and federal investigators said Madoff never provided them with any significant help. The remorse he asserted in all the messages was also suspicious. In his 2009 sentence, Madoff addressed his victims. “I’m sorry,” he said. “I know that doesn’t help you.”

It was not like that.

The youths erupted when federal Judge Denny Chin ordered the maximum penalty for “extraordinarily bad” crimes.

Ross, a former mayor of Fort Lee, New Jersey, who testified at the hearing, told Chin, “He commits Madoff to prison for the rest of his life. Let Satan grow a fourth mouth where Madoff can spend the rest of his life. ‘eternity’.