Bernard Madoff, mastermind of Ponzi scheme that cost billions, dies
Bernard L. Madoff, who died April 14 at 82, was the mastermind of perhaps the largest Ponzi scheme in history, a reviled symbol of Wall Street greed and, once, one of the most sought-after stockbrokers in high finance.
For years, “Bernie” Madoff was regarded as an investment sage. He had clients, homes and boats strewn about exclusive enclaves around the world. Leveraging the clout he had amassed as a legitimate trader, he lured – and eventually fleeced – thousands of investors who entrusted to him their retirement savings, their children’s college funds and their financial security.
His clients included Holocaust survivor and Nobel laureate Elie Wiesel, filmmaker Steven Spielberg, actors Kevin Bacon and Kyra Sedgwick, U.S. Sen. Frank R. Lautenberg, D-N.J., and scores of retirees and other private individuals. Banks, hedge funds, universities and charities came to rely on his improbably reliable reported returns.
In reality, there were no such returns. For at least 16 years, and perhaps longer, Madoff ran a scam in which he paid existing investors with money from new clients.
In 2008, as a financial crisis crippled the U.S. economy, investors began seeking withdrawals of funds that Madoff did not have. His undoing recalled the downfalls dramatized in Greek tragedies: It was swift, excruciating and, in retrospect, inevitable.
On Dec. 10, 2008, Madoff informed his sons, Mark and Andrew Madoff, that his business, the family’s extravagant wealth and his investors’ flourishing portfolios were “all just one big lie.” The brothers turned their father in to authorities.
His arrest the next day at his New York penthouse stunned many of the most experienced financial experts. Government regulators, too, seemed caught unawares – a perception that fueled public outrage as estimates of victim losses reached $20 billion in actual original investments and $65 billion in recorded paper wealth.
His exposure triggered years-long efforts by officials – notably Irving H. Picard, the court-appointed trustee for the liquidation of Madoff’s securities firm – to unravel his scheme and compensate victims. Many investors would recoup only a fraction of the money they had given him.
For Madoff, the personal fallout was catastrophic. His family largely disintegrated. He was so widely despised for his perceived hubris that, reporting for at least one court appearance, he wore a bulletproof vest.