Bernie Madoff, Ponzi scheme mastermind, dies in prison at 82

Bernie Madoff, the one-time senior statesman of Wall Street who in 2008 became the human face of an era of financial misdeeds and missteps for running the largest and possibly most devastating Ponzi scheme in financial history, died Wednesday at the Federal Medical Center in Butner, North Carolina. He was 82.

The Federal Bureau of Prisons confirmed the death. Madoff, who was serving a 150-year prison sentence, had asked for early release in February 2020, saying in a court filing that he had less than 18 months to live after entering the final stages of kidney disease.

Madoff ’s enormous fraud began among friends, relatives and country club acquaintances but ultimately grew to encompass major charities, universities, institutional investors and wealthy families in Europe, Latin America and Asia.

Buttressed by elaborate account statements and a deep reservoir of trust from his investors and regulators, Madoff steered his fraud scheme safely through recessions and crises. But the financial meltdown that began in mid-2007 and reached a climax with the failure of Lehman Bros. in September 2008 was his undoing.

Hedge funds and other institutional investors, pressured by demands from their own clients, began to take hundreds of millions of dollars from their Madoff accounts. By December 2008, more than $12 billion had been withdrawn and little fresh cash was coming in to cover redemptions.

Faced with ruin, Madoff confessed to his two sons that his money management operation was actually “one big lie.” They reported his confession to law enforcement, and the next day, Dec. 11, 2008, he was arrested at his Manhattan penthouse.

The victims of his fraud, some of whom went overnight from comfortable wealth to frantic desperation, numbered in the thousands. The paper losses totaled $64.8 billion.

More than money was lost. At least two people, in despair over their losses, committed suicide. A major Madoff investor suffered a fatal heart attack after months of contentious litigation over his role in the scheme. Some investors lost their homes.

Madoff was not spared in these tragic aftershocks. His older son, Mark, committed suicide in his Manhattan apartment on Dec. 11, 2010, the second anniversary of his father’s arrest.

AP 2009 Bernard Madoff, who pleaded guilty to orchestrating the largest Ponzi scheme in history, had requested and was denied an early release some 18 months ago, as he was in the end stages of kidney disease.