Federal Bureau of Prisons says Ponzi schemer Bernard Madoff has handed away By Reuters

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© Reuters. File picture of Bernard Madoff exiting the Manhattan federal courtroom home in New York

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By Jonathan Stempel and Invoice Trott

NEW YORK (Reuters) -Bernard Madoff, who was convicted for working the most important identified Ponzi scheme in historical past, died on Wednesday in federal jail the place he was serving a 150-year sentence, the Bureau of Prisons mentioned. He was 82.

Madoff had been affected by persistent kidney failure and a number of other different medical illnesses.

He had been held at a federal jail in Butner, North Carolina, after being sentenced in June 2009 to a 150-year time period for engineering a fraud estimated as excessive as $64.8 billion.

Madoff’s hundreds of victims, giant and small, included people, charities, pension funds and hedge funds.

Amongst these he betrayed have been the actors Kevin Bacon, Kyra Sedgwick and John Malkovich; baseball Corridor of Fame pitcher Sandy Koufax; and a charity related to director Steven Spielberg.

Homeowners of the New York Mets, longtime Madoff shoppers, struggled for years to discipline a great baseball staff due to losses they suffered.

“We thought he was God. We trusted every part in his fingers,” Nobel Peace Prize winner Elie Wiesel, whose basis misplaced $15.2 million, mentioned in 2009.

Some victims misplaced every part. Many got here from the Jewish neighborhood, the place Madoff had been a serious philanthropist.

Madoff’s crimes have been revealed to authorities in 2008 by his two sons, who weren’t a part of the scheme.

The fraud uncovered holes on the U.S. Securities and Trade Fee, which via incompetence or neglect botched a half-dozen examinations.

“There have been a number of occasions that I met with the SEC and thought, ‘They received me,'” Madoff instructed attorneys in a jail interview, in response to ABC Information.

Madoff had been the most important market-maker on the Nasdaq, as soon as serving as its non-executive chairman.

His brokerage agency was situated in a Midtown Manhattan tower generally known as the Lipstick Constructing.

Workers there mentioned they felt like a part of Madoff’s household. They didn’t know he was working his fraud on a unique ground. Solely a trusted few did.

In a typical Ponzi scheme, cash from newer traders is used to pay sums owed to earlier traders.

Madoff mentioned his fraud started within the early Nineteen Nineties, however prosecutors and lots of victims imagine it began earlier.

Buyers have been entranced by the regular, double-digit annual positive aspects that Madoff appeared to generate, and which others discovered unattainable to clarify or duplicate.

The cash helped Madoff and his spouse, Ruth, take pleasure in luxuries similar to a Manhattan penthouse, a French villa and costly vehicles and yachts, with a mixed web price of about $825 million.

However nobody from Madoff’s instant household was within the Manhattan courtroom when U.S. District Choose Denny Chin sentenced him.

And no household, associates or supporters submitted letters testifying to his good character or deeds in assist of leniency.

“I believed after I began this downside, this crime, that it will be one thing I might be capable to work my method out of, however that turned unattainable,” Madoff instructed the courtroom. “As onerous as I attempted, the deeper I dug myself right into a gap.”

Madoff additionally addressed victims in attendance, saying, “I’m sorry. I do know that does not show you how to.”

KEEPING UP APPEARANCES

Bernard Lawrence Madoff was born on April 29, 1938, within the New York Metropolis borough of Queens and grew up there because the son of European immigrants who ran a brokerage out of their home.

Madoff graduated from Hofstra College in 1960 and briefly attended Brooklyn Regulation College earlier than quitting.

That very same yr, he began Bernard L. Madoff Funding Securities, utilizing his $500 in financial savings and workplace area borrowed from his father-in-law, Madoff instructed New York journal in 2011.

Madoff began small, promoting penny shares within the over-the-counter market. By the early Seventies, he had grow to be one of many 5 unique broker-dealers within the Nasdaq buying and selling system.

Madoff advocated for higher market competitors, at a time the New York Inventory Trade nonetheless dominated buying and selling, and have become an early drive in digital buying and selling.

At occasions pleasant and charming, and at others aloof, Madoff had a penchant for neatness that some considered as an obsession.

Madoff’s workplaces have been embellished in black and shades of grey, with little paperwork or objects seen on worker desks, and he coordinated a number of wedding ceremony rings along with his wristwatches.

Market-making served Madoff properly within the Eighties and Nineteen Nineties, when he and his rivals may revenue from shopping for a inventory at $5 and promoting it for $5.125, for instance.

Profitability declined as soon as decimalization turned commonplace, however Madoff’s brokerage operation offered monetary assist for his fraud.

Shoppers have been instructed they might earn money via a “split-strike conversion technique,” by which Madoff would purchase a basket of enormous shares to reflect the Customary & Poor’s 100 index, and cut back threat by buying and promoting choices on that index.

Madoff appeared profitable, and clients have been comfortable.

But it surely wasn’t actual.

Prosecutors mentioned Madoff and his workers despatched shoppers pretend confirmations for trades he by no means executed, and faux account statements to doc positive aspects he by no means made.

Madoff admitted to generally dipping into his account at JPMorgan Chase (NYSE:) to pay clients who needed their a reimbursement.

QUESTIONS MOUNT

Suspicions started surfacing within the early Nineteen Nineties, when Madoff’s title got here up in a SEC probe of a now-defunct Florida accounting agency, Avellino & Bienes.

In 2001, a Barron’s article famous skepticism on Wall Road about Madoff, together with that he could be utilizing his market-making operation to “easy” returns for traders.

Madoff demurred. “It is a proprietary technique. I am unable to go into it in nice element,” he mentioned, whereas dismissing the Barron’s concept as ridiculous.

Extra questions have been raised as a whistleblower, monetary analyst Harry Markopolos, started urgent the SEC to cease Madoff.

From 1992 to 2008, the SEC obtained six complaints elevating “important purple flags” about Madoff and whether or not he was buying and selling something, however by no means took even primary steps to determine what he was doing, its inspector common David Kotz later mentioned.

All of it got here crashing down within the fall of 2008, as the worldwide monetary disaster struck and lots of traders demanded to money out.

Unable to satisfy $7 billion of redemption requests, Madoff confessed to sons Mark and Andrew that his funding advisory enterprise was “one huge lie.”

The sons went to the authorities and Madoff was arrested on Dec. 11, 2008, in the future after his firm’s Christmas social gathering. Three months later, he pleaded responsible to 11 felony counts together with fraud, cash laundering and perjury.

Madoff initially maintained that the fraud was his alone, however prosecutors ended up profitable 15 convictions or responsible pleas.

These included a responsible plea from Madoff’s youthful brother Peter, the agency’s chief compliance officer, who obtained 10 years in jail. The one trial ended with convictions and jail phrases for 5 former Madoff workers.

Prosecutors received a serious increase after profitable the cooperation of Frank DiPascali, Madoff’s longtime monetary chief, who died in 2015 of lung most cancers.

Ruth Madoff was not charged. She mentioned she felt her husband had betrayed her after practically a half-century of marriage. Many have been skeptical of her declare she knew nothing concerning the fraud.

Prosecutors let Ruth Madoff maintain $2.5 million.

PAYBACK

Inside days of Madoff’s arrest, efforts started to attempt to recoup cash for individuals who invested with him or with third events that despatched their cash to his agency.

A big portion of those sums got here from a $7.2 billion settlement with the property of Jeffry Picower, a longtime Madoff investor from Florida.

The ache for Madoff’s household didn’t finish with the patriarch’s imprisonment.

Suffering from his father’s actions and by lawsuits, Mark Madoff, the older son, hanged himself with a canine leash at age 46 on Dec. 11, 2010, the second anniversary of his father’s arrest.

In September 2014, Andrew Madoff died of most cancers, at age 48.

As his well being worsened, Madoff sought an early, “compassionate launch” from jail.

Chin rejected that request in June 2020, agreeing with prosecutors that jail interviews the place Madoff performed down his crimes confirmed he “by no means totally accepted accountability” for them.

Within the New York journal article, Madoff made clear he believed he modified how Wall Road operated, and lots of victims might need misplaced more cash within the markets had they not heard of him.

However he mentioned he wouldn’t make excuses for his fraud and had come to phrases along with his crimes and pariah standing.

“It’s what it’s,” he mentioned.





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