Juicy Details Of Bernie Madoff’s Crimes, His Sentencing and Family Facts

When Bernie Madoff made off with billions of dollars back in 2008, it sent shock waves all through the US finance sector. What began as a reputable financial advisory practice in 1960 turned into a huge Ponzi scheme gone beyond redemption. It left his clients devastated with the loss estimated at a whopping $65 billion.

The Madoff investment scandal became a major case of stock and securities fraud discovered in late 2008. The man at the center of it all made history as the perpetrator of the largest fraudulent practice in the United States. Bernie also openly admitted that the wealth management arm of his business was an elaborate, multi-billion-dollar, Ponzi scheme.

Bernard Madoff’s Ponzi Scheme Started as an Investment Firm

The notorious investment manager was born on April 29, 1938, in Queens, New York, the United States of America. He is of Jewish lineage and his parents were Ralph Madoff and Sylvia Muntner. His father is known to have worked as a broker which might have been Bernard’s inspiration to join the business world even though he had gone to Hofstra University to study political science.

He started his investment firm known as Bernard L Madoff Investment Securities LLC in 1960 with the sum of $5,000. His father-in-law who was an accountant named Saul Alpern, supported Madoff’s business by giving him a loan of $50,000, as well as referring his friends to invest in the firm.

During its early years, the firm conducted its trading activities through the National Quotation Bureau’s Pink Sheets. However, in a bid to expand his operations and compete with firms on the New York Stock Exchange, Madoff would create an ICT innovation to disseminate quotations of his firm. After a successful trial, the innovation helped to create NASDAQ, an electronic-based stock exchange platform.

His Fraudulent Activities Went Unnoticed for Several Decades

When his investment firm started to run, he attracted clients by promising handsome returns on investment; this made Madoff a very popular investment manager. His clientele grew to include very notable personalities in the United States, including Hollywood director Steven Spielberg, the deceased actress Zsa Zsa Gabor, and actor John Malkovich – they all suffered a great financial loss when Madoff’s crimes were exposed.

He is also known to have worked with several organizations, which he lured to invest in his firm. Some of the foundations on Madoff’s client list include the Women’s Zionist Organization of America, the Elie Wiesel Foundation, Steven Spielberg’s Wunderkinder Foundation, and the Lappin Foundation, among several others.

Madoff would trade for decades under the guise of the stock exchange but it was revealed that he never made those trades. One thing that has intrigued many is how Bernie Madoff went unnoticed for so long without any official intervention. The concerns that were raised did not draw the attention of the government nor the stock exchange authorities.

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An instance was in 1999 when a finance expert named Harry Markopolos made a report to the Securities and Exchange Commission, upholding that Madoff was involved in fraud. He reported that the broker couldn’t be making the type of returns he was reporting. Harry was not taken seriously even though he continued making the complaint in 2000, 2001, 2005, and 2007.

The 2008 Downturn Exposed Him and He Was Jailed for 150 Years

Bernie Madoff
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Following the global financial downturn of 2008, Bernie Madoff found that he could no longer meet his obligations to clients. He was supposed to pay out $7 billion but found that he only had $234 million in his business accounts. He reportedly confessed his situation to his wife, Ruth, and his sons, Mark and Andrew, sometime in December 2008.

The plan was to wrap up the business and distribute what was left among some friends and employees who had invested in the firm. Before this discussion, Madoff had asked his wife to make some transfers of about $15 million to her account.

Mark and Andrew reported their father to federal authorities and on December 11th, 2008, he was arrested. The next day, the court ordered that Madoff’s assets should be ceased and in the coming months, he lost all that he had. He was in and out of court until June 2009 when he was given the maximum sentence allowed by the law which was 150 years imprisonment for his crimes.

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It’s hard to pinpoint when Madoff’s company turned into a full-blown Ponzi scheme. He said it started in 1991 but investigations have revealed that it probably started in the 80s or 70s. His clients lost $57 billion; $17.3 billion is the actual amount invested and not paid back. At least $2.6 billion has been recovered and paid back to his victims by the government. More so, the U.S government in November 2017, paid $772.5 million to about 24,000 victims of Madoff’s Ponzi scheme.

Bernie Madoff is Serving His Time at a Federal Prison in North Carolina

For someone who had clocked 70 before he received 150 years imprisonment, the former American market maker will be spending the rest of his life in prison. The transition to prison came with its ups and downs as there have been reports of altercations with fellow inmates.

In December 2009, he was reportedly taken to a hospital outside the prison due to some serious injuries he sustained in a fight. However, these claims were denied by Bernie who signed an affidavit that he was hospitalized for hypertension. He once wrote to his daughter-in-law, relating that he’s being treated fine in prison. He described the place as “safer than the streets of New York City”; Madoff is still very much alive.

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There have been pleas to reduce his sentence. On the 29th of July 2019, Bernie Madoff reached out to the U.S president, Donald Trump, pleading for pardon. Nothing came out of that. Sometime in February 2020, Madoff’s lawyer yet again filed another plea, contending that he has a chronic case of kidney failure and had not more than 18 months to live. Like the first, it didn’t yield any positive results.

The Aftermath of Madoff’s Crimes Took a Toll on His Family

Bernie Madoff is married to a lady named Ruth. They met while in high school and got married in November 1959. Ruth actually co-founded her husband’s company and worked as a bookkeeper in his company. She denied knowing anything about his Ponzi scheme.

When her husband was nabbed for his crimes, she disclosed that they attempted a joint suicide when the fraud was uncovered but the plan was futile. Following the legal case against her husband, Ruth surrendered $85 million to the government and was allowed to keep $2.5 million. She is also known to have relocated to Connecticut where she rented a flat and lives a simple life.

Bernie Madoff’s brother named Peter also worked in the firm.  Peter was the senior managing director as well as the chief compliance officer. His daughter, Shana, served as the firm’s rules and compliance officer and attorney. When Bernie’s crimes caught up with him, Peter was also entangled in the whole drama for which he got a 10-year sentence.

The Two Sons He Had With Ruth are Dead

The Madoffs had two children named Mark and Andrew Madoff. They both worked for their father and were also involved in philanthropic activities, however, both of them are now late. Mark committed suicide on 11th December 2010, which was exactly the day that marked the 2nd anniversary of his father’s sentence.

He killed himself by hanging and was 46 years old then. His lifeless body was found by his father-in-law and at the time of his death, his 2-year-old son was in the apartment. It is believed that the frustration of the lawsuits and his inability to get any reasonable paying job inspired the suicide.

A couple of years later, the only surviving Madoff son, Andrew, passed on. He died on September 3rd, 2014, of lymphoma and at the time of his death, he was 48. Andrew had been battling cancer since 2003

Ngozika
Ngozika loves nothing more than to turn information into an exciting, delightful, and compelling article that informs and educates, inspires, and motivates the reader.
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