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Bernie Madoff
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"Madoff" redirects here. For other people with the same surname, see Madoff
(surname). For the mini series about Madoff, see Madoff (miniseries).

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Bernie Madoff


U.S. Department of Justice photograph, 2009

Born
Bernard Lawrence Madoff

April 29, 1938

New York City, New York, U.S.

Died April 14, 2021 (aged 82) from Covid-19

Federal Medical Center, Butner
Granville County, North Carolina, U.S.

Alma mater Hofstra University
Occupation Stock broker, investment adviser, financier
Employer Bernard L. Madoff Investment Securities (founder)
Known for Being the chairman of NASDAQ and the Madoff investment scandal
Criminal status Deceased
Spouse(s)
Ruth Madoff


(m. 1959)Children
Mark Madoff (1964–2010)
Andrew Madoff (1966–2014)


Conviction(s) March 12, 2009 (pleaded guilty)
Criminal charge Securities fraud, investment advisor fraud, mail fraud,
wire fraud, money laundering, false statements, perjury, making false
filings with the SEC, theft from an employee benefit plan
Penalty 150-year prison term and forfeiture of US$17.179 billion

Bernard Lawrence Madoff (/ˈmeɪdɔːf/ MAY-doff;[1] April 29, 1938 – April 14,
2021) was an American financier and convicted fraudster who ran the world's
largest Ponzi scheme.[2] He was at one time non-executive chairman of the
NASDAQ stock market[3] before being revealed as the operator of the largest
financial fraud in U.S. history,[2] worth about $64.8 billion.[4]

Madoff founded a penny stock brokerage in 1960, which eventually grew into
Bernard L. Madoff Investment Securities. He served as its chairman until his
arrest on December 11, 2008.[5][6] The firm was one of the top market maker
businesses on Wall Street,[7] which bypassed "specialist" firms by directly
executing orders over the counter from retail brokers.[8]

At the firm, he employed his brother Peter Madoff as senior managing
director and chief compliance officer, Peter's daughter Shana Madoff as the
firm's rules and compliance officer and attorney, and his now deceased sons
Mark and Andrew. Peter was sentenced to 10 years in prison[9] and Mark died
by suicide by hanging exactly two years after his father's
arrest.[10][11][12] Andrew died of lymphoma on September 3, 2014.[13]

On December 10, 2008, Madoff's sons told authorities that their father had
confessed to them that the asset management unit of his firm was a massive
Ponzi scheme, and quoted him as saying that it was "one big
lie".[14][15][16] The following day, FBI agents arrested Madoff and charged
him with one count of securities fraud. The U.S. Securities and Exchange
Commission (SEC) had previously conducted multiple investigations into his
business practices but had not uncovered the massive fraud.[7] On March 12,
2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning
his wealth management business into a massive Ponzi scheme. The Madoff
investment scandal defrauded thousands of investors of billions of dollars.
Madoff said that he began the Ponzi scheme in the early 1990s, but federal
investigators believe that the fraud began as early as the mid-1980s[17] and
may have begun as far back as the 1970s.[18] Those charged with recovering
the missing money believe that the investment operation may never have been
legitimate.[19][20] The amount missing from client accounts was almost $65
billion, including fabricated gains.[21] The Securities Investor Protection
Corporation (SIPC) trustee estimated actual losses to investors of $18
billion.[19] On June 29, 2009, Madoff was sentenced to 150 years in prison,
the maximum sentence for the crimes he was charged with; he died in prison
in April 2021.[22][23][24]

Contents
1Early life
2Career
3Government access
4Investment scandal
4.1Mechanics of the fraud
4.2Affinity fraud
4.3Size of loss to investors
5Plea, sentencing, and prison life
5.1Incarceration
5.2Death
6Personal life
7Philanthropy and other activities
8In the media
9See also
10References
11External links
Early life

Madoff was born on April 29, 1938, in Queens, New York, the son of Sylvia
(Muntner) and Ralph Madoff, who was a plumber and
stockbroker.[25][26][27][28] His family was Jewish. Madoff's grandparents
were emigrants from Poland, Romania, and Austria.[29]

He was the second of three children; his siblings are Sondra Weiner and
Peter Madoff.[30][31] Madoff graduated from Far Rockaway High School in
1956.[32]

He attended the University of Alabama for one year, where he became a
brother of the Tau Chapter of the Sigma Alpha Mu fraternity,[33] then
transferred to and graduated from Hofstra University in 1960 with a Bachelor
of Arts in political science.[34][35] Madoff briefly attended Brooklyn Law
School, but left after his first year to found the Wall Street firm Bernard
L. Madoff Investment Securities LLC and remain working for his own
company.[36][37]

Career

At the time of his arrest on December 11, 2008, Madoff was the chairman of
Bernard L. Madoff Investment Securities LLC.[5]

The firm started in 1960 as a penny stock trader with $5,000 (equivalent to
$43,000 in 2019[38]) that Madoff earned from working as a lifeguard and
sprinkler installer.[39] He further secured a loan of $50,000 from his
father-in-law which he also used to set up the firm. His business grew with
the assistance of his father-in-law, accountant Saul Alpern, who referred a
circle of friends and their families.[40] Initially, the firm made markets
(quoted bid and ask prices) via the National Quotation Bureau's Pink Sheets.
In order to compete with firms that were members of the New York Stock
Exchange trading on the stock exchange's floor, his firm began using
innovative computer information technology to disseminate its quotes.[41]
After a trial run, the technology that the firm helped to develop became the
NASDAQ.[42] After 41 years as a sole proprietorship, the Madoff firm
incorporated in 2001 as a limited liability company with Madoff as the sole
shareholder.[43]

The firm functioned as a third-market provider, bypassing exchange
specialist firms by directly executing orders over the counter from retail
brokers.[8] At one point, Madoff Securities was the largest market maker at
the NASDAQ, and in 2008 was the sixth-largest market maker on Wall
Street.[41] The firm also had an investment management and advisory
division, which it did not publicize, that was the focus of the fraud
investigation.[44]

Madoff was "the first prominent practitioner"[45] of payment for order flow,
in which a dealer pays a broker for the right to execute a customer's order.
This has been called a "legal kickback".[46] Some academics have questioned
the ethics of these payments.[47][48] Madoff argued that these payments did
not alter the price that the customer received.[49] He viewed the payments
as a normal business practice:

If your girlfriend goes to buy stockings at a supermarket, the racks that
display those stockings are usually paid for by the company that
manufactured the stockings. Order flow was an issue that attracted a lot of
attention but was grossly overrated.[49]

Madoff was active in the National Association of Securities Dealers (NASD),
a self-regulatory securities-industry organization. He served as chairman of
its board of directors, and was a member of its board of governors.[50]

Government access

From 1991 to 2008, Bernie and Ruth Madoff contributed about $240,000 to
federal candidates, parties, and committees, including $25,000 a year from
2005 through 2008 to the Democratic Senatorial Campaign Committee. The
Committee returned $100,000 of the Madoffs' contributions to Irving Picard,
the bankruptcy trustee who oversees all claims, and Senator Charles E.
Schumer returned almost $30,000 received from Madoff and his relatives to
the trustee. Senator Christopher J. Dodd donated $1,500 to the Elie Wiesel
Foundation for Humanity, a Madoff victim.[51]

Members of the Madoff family have served as leaders of the Securities
Industry and Financial Markets Association (SIFMA), the primary securities
industry organization.[52] Bernard Madoff served on the board of directors
of the Securities Industry Association, a precursor of SIFMA, and was
chairman of its trading committee.[53][54] He was a founding board member of
the Depository Trust & Clearing Corporation (DTCC) subsidiary in London, the
International Securities Clearing Corporation.[55][56]

Madoff's brother Peter served two terms as a member of SIFMA's Board of
Directors. He and Andrew received awards from SIFMA in 2008 for
"extraordinary leadership and service".[57] He resigned from the Board of
Directors of SIFMA in December 2008, as news of the Ponzi scheme broke.[52]
From 2000 to 2008, the Madoff brothers donated $56,000 directly to SIFMA,
and paid additional money as sponsors of industry meetings.[58] Bernard
Madoff's niece Shana Madoff was a member of the Executive Committee of
SIFMA's Compliance & Legal Division, but resigned shortly after the
arrest.[59]

Madoff's name first came up in a fraud investigation in 1992, when two
people complained to the SEC about investments they made with Avellino &
Bienes, the successor to his father-in-law's accounting practice. For years,
Alpern and two of his colleagues, Frank Avellino and Michael Bienes, had
raised money for Madoff, a practice that continued after Avellino and Bienes
took over the firm in the 1970s.[60] Avellino returned the money to
investors and the SEC closed the case.[61] In 2004, Genevievette
Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and
Examinations (OCIE), informed her supervisor branch chief Mark Donohue that
her review of Madoff found numerous inconsistencies, and recommended further
questioning. However, she was told by Donohue and his boss Eric Swanson to
stop work on the Madoff investigation, send them her work results, and
instead investigate the mutual fund industry. Swanson, Assistant Director of
the SEC's OCIE,[62] had met Shana Madoff in 2003 while investigating her
uncle Bernie Madoff and his firm. The investigation was concluded in 2005.
In 2006 Swanson left the SEC and became engaged to Shana Madoff, and in 2007
the two married.[63][64] A spokesman for Swanson said he "did not
participate in any inquiry of Bernard Madoff Securities or its affiliates
while involved in a relationship" with Shana Madoff.[65]

While awaiting sentencing, Madoff met with the SEC's Inspector General, H.
David Kotz, who conducted an investigation into how regulators had failed to
detect the fraud despite numerous red flags.[66] Madoff said he could have
been caught in 2003, but that bumbling investigators had acted like "Lt.
Colombo" and never asked the right questions:

I was astonished. They never even looked at my stock records. If
investigators had checked with The Depository Trust Company, a central
securities depository, it would've been easy for them to see. If you're
looking at a Ponzi scheme, it's the first thing you do.[67]

Madoff said in the June 17, 2009, interview that SEC Chairman Mary Schapiro
was a "dear friend", and SEC Commissioner Elisse Walter was a "terrific
lady" whom he knew "pretty well".[68]

After Madoff's arrest, the SEC was criticized for its lack of financial
expertise and lack of due diligence, despite having received complaints from
Harry Markopolos and others for almost a decade. The SEC's Inspector
General, Kotz, found that since 1992, there had been six investigations of
Madoff by the SEC, which were botched either through incompetent staff work
or by neglecting allegations of financial experts and whistle-blowers. At
least some of the SEC investigators doubted whether Madoff was even
trading.[69][70][71]

Due to concerns of improper conduct by Inspector General Kotz in the Madoff
investigation, Inspector General David C. Williams of the United States
Postal Service was brought in to conduct an independent outside review.[72]

The Williams Report questioned Kotz's work on the Madoff investigation,
because Kotz was a "very good friend" with Markopolos.[73][74] Investigators
were not able to determine when Kotz and Markopolos became friends. A
violation of the ethics rule would have taken place if the friendship were
concurrent with Kotz's investigation of Madoff.[73][75]

Investment scandal
Main article: Madoff investment scandal

In 1999, financial analyst Harry Markopolos had informed the SEC that he
believed it was legally and mathematically impossible to achieve the gains
Madoff claimed to deliver. According to Markopolos, it took him four minutes
to conclude that Madoff's numbers did not add up, and another minute to
suspect they were fraudulent.[76]

After four hours of failed attempts to replicate Madoff's numbers,
Markopolos believed he had mathematically proven Madoff was a fraud.[77] He
was ignored by the SEC's Boston office in 2000 and 2001, as well as by
Meaghan Cheung at the SEC's New York office in 2005 and 2007 when he
presented further evidence. He has since co-authored a book with Gaytri
Kachroo (the leader of his legal team) titled No One Would Listen. The book
details the frustrating efforts he and his legal team made over a ten-year
period to alert the government, the industry, and the press about Madoff's
fraud.[76]

Although Madoff's wealth management business ultimately grew into a
multibillion-dollar operation, none of the major derivatives firms traded
with him because they did not believe his numbers were real. None of the
major Wall Street firms invested with him, and several high-ranking
executives at those firms suspected his operations and claims were not
legitimate.[77] Others contended it was inconceivable that the growing
volume of Madoff's accounts could be competently and legitimately serviced
by his documented accounting/auditing firm, a three-person firm with only
one active accountant.[78]

The Central Bank of Ireland failed to spot Madoff's gigantic fraud when he
started using Irish funds and had to supply large amounts of information,
which would have been enough to enable Irish regulators to uncover the fraud
much earlier than late 2008 when he was finally arrested in New
York.[79][80][81]

The Federal Bureau of Investigation report and federal prosecutors'
complaint says that during the first week of December 2008, Madoff confided
to a senior employee, identified by Bloomberg News as one of his sons, that
he said he was struggling to meet $7 billion in redemptions.[14] For years,
Madoff had simply deposited investors' money in his business account at
JPMorgan Chase and withdrew money from that account when they requested
redemptions. He had scraped together just enough money to make a redemption
payment on November 19. However, despite cash infusions from several
longtime investors, by the week after Thanksgiving it was apparent that
there was not enough money to even begin to meet the remaining requests. His
Chase account had over $5.5 billion in mid-2008, but by late November was
down to $234 million, a fraction of the outstanding redemptions. On December
3, he told longtime assistant Frank DiPascali, who had overseen the
fraudulent advisory business, that he was finished. On December 9, he told
his brother Peter about the fraud.[60][20]

According to the sons, Madoff told Mark Madoff on the following day,
December 9, that he planned to pay out $173 million in bonuses two months
early.[82] Madoff said that "he had recently made profits through business
operations, and that now was a good time to distribute it."[14] Mark told
Andrew Madoff, and the next morning they went to their father's office and
asked him how he could pay bonuses to his staff if he was having trouble
paying clients. They then traveled to Madoff's apartment, where with Ruth
Madoff nearby, Madoff told them he was "finished," that he had "absolutely
nothing" left, and that his investment fund was "just one big lie" and
"basically, a giant Ponzi scheme."[82][20]

According to their attorney, Madoff's sons then reported their father to
federal authorities.[14] Madoff had intended to wind up his operations over
the remainder of the week before having his sons turn him in; he directed
DiPascali to use the remaining money in his business account to cash out the
accounts of several family members and favored friends.[60] However, as soon
as they left their father's apartment, Mark and Andrew immediately contacted
a lawyer, who in turn got them in touch with federal prosecutors and the
SEC.[20] On December 11, 2008, Madoff was arrested and charged with
securities fraud.[16]

Madoff posted $10 million bail in December 2008 and remained under 24-hour
monitoring and house arrest in his Upper East Side penthouse apartment until
March 12, 2009, when Judge Denny Chin revoked his bail and remanded him to
the Metropolitan Correctional Center. Chin ruled that Madoff was a flight
risk because of his age, his wealth, and the prospect of spending the rest
of his life in prison.[83] Prosecutors filed two asset forfeiture pleadings
which include lists of valuable real and personal property as well as
financial interests and entities owned or controlled by Madoff.[84]

Madoff's lawyer, Ira Sorkin, filed an appeal, which prosecutors opposed.[84]
On March 20, 2009, an appellate court denied Madoff's request to be released
from jail and returned to home confinement until his sentencing on June 29,
2009. On June 22, 2009, Sorkin hand-delivered a customary pre-sentencing
letter to the judge requesting a sentence of 12 years, because of tables
from the Social Security Administration that his life span was predicted to
be 13 years.[66][85]

On June 26, 2009, Chin ordered forfeiture of $170 million in Madoff's
assets. Prosecutors asked Chin to sentence Madoff to 150 years in
prison.[86][87][88] Bankruptcy Trustee Irving Picard indicated that "Mr.
Madoff has not provided meaningful cooperation or assistance."[89]

In settlement with federal prosecutors, Madoff's wife Ruth agreed to forfeit
her claim to $85 million in assets, leaving her with $2.5 million in
cash.[90] The order allowed the SEC and Court appointed trustee Irving
Picard to pursue Ruth Madoff's funds.[89] Massachusetts regulators also
accused her of withdrawing $15 million from company-related accounts shortly
before he confessed.[91]

In February 2009, Madoff reached an agreement with the SEC.[92] It was later
revealed that as part of the agreement, Madoff accepted a lifetime ban from
the securities industry.[93]

Picard sued Madoff's sons, Mark and Andrew, his brother Peter, and Peter's
daughter, Shana, for negligence and breach of fiduciary duty, for $198
million. The defendants had received over $80 million in compensation since
2001.[94][95]

Mechanics of the fraud

According to the SEC indictment against Annette Bongiorno and Joann Crupi,
two back office workers who worked for Madoff, they created false trading
reports based on the returns that Madoff ordered for each customer.[96]

For example, when Madoff determined a customer's return, one of the back
office workers would enter a false trade report with a previous date and
then enter a false closing trade in the amount required to produce the
required profit, according to the indictment.[97] Prosecutors allege that
Bongiorno used a computer program specially designed to backdate trades and
manipulate account statements. They quote her as writing to a manager in the
early 1990s, "I need the ability to give any settlement date I want."[96] In
some cases, returns were allegedly determined before the account was even
opened.[97]

On a daily basis, DiPascali and his team on the 17th floor of the Lipstick
Building, where the scam was based (Madoff's brokerage was based on the 19th
floor, while the main entrance and conference room were on the 18th floor),
watched the closing price of the S&P 100. They then picked the
best-performing stocks and used them to create bogus "baskets" of stocks as
the basis for false trading records, which Madoff claimed were generated
from his supposed "split-strike conversion" strategy, in which he bought
blue-chip stocks and took options contracts on them. They frequently made
their "trades" at a stock's monthly high or low, resulting in the high
"returns" that they touted to customers. On occasion, they slipped up and
dated trades as taking place on weekends and federal holidays, though this
was never caught.[20]

Over the years, Madoff admonished his investors to keep quiet about their
relationship with him. This was because he was well aware of the finite
limits that existed for a legitimate split-strike conversion. He knew that
if the amount he "managed" became known, investors would question whether he
could trade on the scale he claimed without the market reacting to his
activity, or whether there were enough options to hedge his stock
purchases.[60]

At least as early as 2001, Harry Markopolos discovered that for Madoff's
strategy to be legitimate, he would have had to buy more options on the
Chicago Board Options Exchange than actually existed.[76] Additionally, at
least one hedge-fund manager, Suzanne Murphy, revealed that she balked at
investing with Madoff because she did not believe there was enough volume to
support his purported trading activity.[20]

Madoff admitted during his March 2009 guilty plea that the essence of his
scheme was to deposit client money into a Chase account, rather than invest
it and generate steady returns as clients had believed. When clients wanted
their money, "I used the money in the Chase Manhattan bank account that
belonged to them or other clients to pay the requested funds," he told the
court.[98]

Madoff maintained that he began his fraud in the early 1990s, though
prosecutors believed it was underway as early as the 1980s. DiPascali, for
instance, told prosecutors that he knew at some point in the late 1980s or
early 1990s that the investment advisory business was a sham.[60] An
investigator charged with reconstructing Madoff's scheme believes that the
fraud was well under way as early as 1964. Reportedly, Madoff told an
acquaintance soon after his arrest that the fraud began "almost immediately"
after his firm opened its doors. Bongiorno, who spent over 40 years with
Madoff–longer than anyone except Ruth and Peter–told investigators that she
was doing "the same things she was doing in 2008" when she first joined the
firm.[20]

Affinity fraud

Madoff targeted wealthy American Jewish communities, using his in-group
status to obtain investments from Jewish individuals and institutions.
Affected Jewish charitable organizations considered victims of this affinity
fraud include Hadassah, the Women's Zionist Organization of America, the
Elie Wiesel Foundation and Steven Spielberg's Wunderkinder Foundation.
Jewish federations and hospitals lost millions of dollars, forcing some
organizations to close. The Lappin Foundation, for instance, was forced to
close temporarily because it had invested its funds with Madoff.[99]

Size of loss to investors

David Sheehan, chief counsel to trustee Picard, stated on September 27,
2009, that about $36 billion was invested into the scam, returning $18
billion to investors, with $18 billion missing. About half of Madoff's
investors were "net winners," earning more than their investment. The
withdrawal amounts in the final six years were subject to "clawback" (return
of money) lawsuits.[19]

In a May 4, 2011, statement, trustee Picard said that the total fictitious
amounts owed to customers (with some adjustments) were $57 billion, of which
$17.3 billion was actually invested by customers. $7.6 billion has been
recovered, but pending lawsuits, only $2.6 billion was available to repay
victims.[100] If all the recovered funds are returned to victims, their net
loss would be under $10 billion.

The Internal Revenue Service ruled that investors' capital losses in this
and other fraudulent investment schemes would be treated as business losses,
thereby allowing the victims to claim them as net operating losses to reduce
tax liability more easily.[101]

The size of the fraud was stated as $65 billion early in the
investigation.[100] Former SEC Chairman Harvey Pitt estimated the actual net
fraud to be between $10 and $17 billion.[102] One difference between the
estimates concerns the method of calculation. One method calculates losses
as the total amount that victims thought they were owed, but will never
receive. The smaller estimates use a different method, subtracting the total
cash received from the scheme from the total cash paid into the scheme,
after excluding from the calculation persons accused of collaborating with
the scheme, persons who invested through "feeder funds," and anyone who
received more cash from the scheme than they paid in. Erin Arvedlund, who
publicly questioned Madoff's reported investment performance in 2001, stated
that the actual amount of the fraud might never be known, but was likely
between $12 and $20 billion.[103][104][105]

Jeffry Picower, rather than Madoff, appears to have been the largest
beneficiary of Madoff's Ponzi scheme, and his estate settled the claims
against it for $7.2 billion.[106][107]

Entities and individuals affiliated with Fred Wilpon and Saul Katz received
$300 million in respect of investments in the scheme. Wilpon and Katz
"categorically reject[ed]" the charge that they "ignored warning signs"
about Madoff's fraud.[108]

On November 9, 2017, the U.S. government announced that it would begin
paying out $772.5 million to more than 24,000 victims of the Ponzi
scheme.[109]

The Madoff Recovery Initiative reports $14.377 billion in total recoveries
and settlement agreements as of December 18, 2020.[110]

Plea, sentencing, and prison life

On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, including
securities fraud, wire fraud, mail fraud, money laundering, making false
statements, perjury, theft from an employee benefit plan, and making false
filings with the SEC. The plea was the response to a criminal complaint
filed two days earlier, which stated that over the past 20 years, Madoff had
defrauded his clients of almost $65 billion in the largest Ponzi scheme in
history. Madoff insisted he was solely responsible for the fraud.[69][111]
Madoff did not plea bargain with the government. Rather, he pleaded guilty
to all charges. It has been speculated that Madoff pleaded guilty instead of
cooperating with the authorities in order to avoid naming any associates and
co-conspirators who were involved with him in the scheme.[112][113]

In November 2009, David G. Friehling, Madoff's accounting front man and
auditor, pleaded guilty to securities fraud, investment adviser fraud,
making false filings to the SEC, and obstructing the Internal Revenue
Service. He admitted to merely rubber-stamping Madoff's filings rather than
auditing them.[114] Friehling extensively cooperated with federal
prosecutors and testified at the trials of five former Madoff employees, all
of whom were convicted and sentenced to between 2 and a half and 10 years in
prison. Although he could have been sentenced to more than 100 years in
prison, because of his cooperation, Friehling was sentenced in May 2015 to
one year of home detention and one year of supervised release.[115] His
involvement made the Madoff scheme by far the largest accounting fraud in
history, dwarfing the $11 billion accounting fraud masterminded by Bernard
Ebbers at WorldCom.

Madoff's right-hand man and financial chief, Frank DiPascali, pleaded guilty
to 10 federal charges in 2009 and (like Friehling) testified for the
government at the trial of five former colleagues, all of whom were
convicted. DiPascali faced a sentence of up to 125 years, but he died of
lung cancer in May 2015, before he could be sentenced.[116][117]

In his plea allocution, Madoff stated he began his Ponzi scheme in 1991. He
admitted he had never made any legitimate investments with his clients'
money during this time. Instead, he said, he simply deposited the money into
his personal business account at Chase Manhattan Bank. When his customers
asked for withdrawals, he paid them out of the Chase account—a classic
"robbing Peter to pay Paul" scenario. Chase and its successor, JPMorgan
Chase, may have earned as much as $483 million from his bank
account.[118][119] He was committed to satisfying his clients' expectations
of high returns, despite an economic recession. He admitted to false trading
activities masked by foreign transfers and false SEC filings. He stated that
he always intended to resume legitimate trading activity, but it proved
"difficult, and ultimately impossible" to reconcile his client accounts. In
the end, Madoff said, he realized that his scam would eventually be
exposed.[83][120]

On June 29, 2009, Judge Chin sentenced Madoff to the maximum sentence of 150
years in federal prison.[22][121] Madoff's lawyers initially asked the judge
to impose a sentence of 7 years, and later requested that the sentence be 12
years, because of Madoff's advanced age of 71 and his limited life
expectancy.[122]

Madoff apologized to his victims, saying,

I have left a legacy of shame, as some of my victims have pointed out, to my
family and my grandchildren. This was something I will live in for the rest
of my life. I'm sorry.

He added, "I know that doesn't help you," after his victims recommended to
the judge that he receive a life sentence. Judge Chin had not received any
mitigating factor letters from friends or family testifying to Madoff's good
deeds. "The absence of such support was telling," he said.[123]

Judge Chin also said that Madoff had not been forthcoming about his crimes.
"I have a sense Mr. Madoff has not done all that he could do or told all
that he knows," said Chin, calling the fraud "extraordinarily evil",
"unprecedented", and "staggering", and that the sentence would deter others
from committing similar frauds.[124] Judge Chin also agreed with
prosecutors' contention that the fraud began at some point in the 1980s. He
also noted that Madoff's crimes were "off the charts" since federal
sentencing guidelines for fraud only go up to $400 million in losses.[125]

Ruth did not attend court but issued a statement, saying "I am breaking my
silence now because my reluctance to speak has been interpreted as
indifference or lack of sympathy for the victims of my husband Bernie's
crime, which was exactly the opposite of the truth. I am embarrassed and
ashamed. Like everyone else, I feel betrayed and confused. The man who
committed this horrible fraud was not the man whom I have known for all
these years."[126]

Incarceration


FCI Butner Medium, where Madoff was incarcerated

Madoff's attorney asked the judge to recommend that the Federal Bureau of
Prisons place Madoff in the Federal Correctional Institution, Otisville,
which was located 70 miles (110 km) from Manhattan. The judge, however, only
recommended that Madoff be sent to a facility in the Northeast United
States. Madoff was transferred to the Federal Correctional Institution
Butner Medium near Butner, North Carolina, about 45 miles (72 km) northwest
of Raleigh; he was Bureau of Prisons Register #61727-054.[127][128] Jeff
Gammage of The Philadelphia Inquirer said, in regards to his prison
assignment, "Madoff's heavy sentence likely determined his fate."[129]

Madoff's projected release date was January 31, 2137.[128][130] The release
date, described as "academic" in Madoff's case because he would have to live
to the age of 201, reflects a reduction for good behavior.[131] On October
13, 2009, it was reported that Madoff experienced his first prison yard
fight with another inmate, also a senior citizen.[132] When he began his
sentence, Madoff's stress levels were so severe that he broke out in hives
and other skin maladies soon after.[133]

On December 18, 2009, Madoff was moved to Duke University Medical Center in
Durham, North Carolina, and was treated for several facial injuries. A
former inmate later claimed that the injuries were received during an
alleged altercation with another inmate.[134]

Other news reports described Madoff's injuries as more serious and including
"facial fractures, broken ribs, and a collapsed lung".[133][135] The Federal
Bureau of Prisons said Madoff signed an affidavit on December 24, 2009,
which indicated that he had not been assaulted and that he had been admitted
to the hospital for hypertension.[136]

In his letter to his daughter-in-law, Madoff said that he was being treated
in prison like a "Mafia don".

They call me either Uncle Bernie or Mr. Madoff. I can't walk anywhere
without someone shouting their greetings and encouragement, to keep my
spirit up. It's really quite sweet, how concerned everyone was about my well
being, including the staff […] It's much safer here than walking the streets
of New York.[137]

After an inmate slapped Madoff because he had changed the channel on the TV,
it was reported that Madoff befriended Carmine Persico, boss of the Colombo
crime family since 1973, one of New York's five American Mafia
families.[138] It was believed Persico had intimidated the inmate who
slapped Madoff in the face.[139]

On July 29, 2019, Bernie Madoff had asked Donald Trump for a reduced
sentence/pardon on his sentence for the Ponzi Scheme, to which the White
House and Donald Trump made no comment.[140]

In February 2020, his lawyer filed for compassionate release from prison on
the claim that he was suffering from chronic kidney failure, a terminal
illness leaving him less than 18 months to live, and that the COVID-19
pandemic further threatened his life.[141] He was hospitalized for this
condition in December 2019.[142] The request was denied due to the severity
of Madoff's crimes.[143]

Death

Madoff died from Covid-19 at the age of 82 in Federal Medical Center, Butner
prison near Butner, North Carolina, on April 14, 2021.[144][145]

Personal life

Madoff met Ruth Alpern while attending Far Rockaway High School. The two
eventually began dating. Ruth graduated from high school in 1958, and earned
her bachelor's degree at Queens College.[146][147] On November 28, 1959,
Madoff married Alpern.[31][148] She was employed at the stock
market[clarification needed] in Manhattan before[149] working in Madoff's
firm, and she founded the Madoff Charitable Foundation.[150] Bernard and
Ruth Madoff had two sons: Mark (March 11, 1964 – December 11, 2010),[151] a
1986 graduate of the University of Michigan, and Andrew (April 8, 1966 –
September 3, 2014),[152][153] a 1988 graduate of University of
Pennsylvania's Wharton Business School.[154][155] Both sons later worked in
the trading section alongside paternal cousin Charles Weiner.[41][156]

Several family members worked for Madoff. His younger brother, Peter,[157]
an attorney, was Senior Managing Director and Chief Compliance Officer, and
Peter's daughter, Shana Madoff, also an attorney, was the firm's compliance
attorney. On the morning of December 11, 2010 — exactly two years after
Bernard's arrest — his son Mark was found dead in his New York City
apartment. The city medical examiner ruled the cause of death as suicide by
hanging.[11][12][158]

Over the years, Madoff's sons had borrowed money from their parents, to
purchase homes and other property. Mark Madoff owed his parents $22 million,
and Andrew Madoff owed them $9.5 million. There were two loans in 2008 from
Bernard Madoff to Andrew: $4.3 million on October 6, and $250,000 on
September 21.[159][160] Andrew owned a Manhattan apartment and a home in
Greenwich, Connecticut, as did his brother Mark,[149] prior to his
death.[161]

Following a divorce from his first wife in 2000, Mark withdrew money from an
account. Both sons used outside investment firms to run their own private
philanthropic foundations.[39][149][162] In March 2003, Andrew Madoff was
diagnosed with mantle cell lymphoma and eventually returned to work. He was
named chairman of the Lymphoma Research Foundation in January 2008, but
resigned shortly after his father's arrest.[149]

Peter Madoff (and Andrew Madoff, before his death) remained the targets of a
tax fraud investigation by federal prosecutors, according to The Wall Street
Journal. David Friehling, Bernard Madoff's tax accountant, who pleaded
guilty in a related case, was reportedly assisting in the investigation.
According to a civil lawsuit filed in October 2009, trustee Irving Picard
alleges that Peter Madoff deposited $32,146 into his Madoff accounts and
withdrew over $16 million; Andrew deposited almost $1 million into his
accounts and withdrew $17 million; Mark deposited $745,482 and withdrew
$18.1 million.[163]

Bernard Madoff lived in Roslyn, New York, in a ranch house through the
1970s. After 1980, he owned an ocean-front residence in Montauk.[164] His
primary residence was on Manhattan's Upper East Side,[165] and he was listed
as chairman of the building's co-op board.[166] He also owned a home in
France and a mansion in Palm Beach, Florida, where he was a member of the
Palm Beach Country Club.[167] Madoff owned a 55-foot (17 m) sportfishing
yacht named Bull.[166][168] All three of his homes were auctioned by the
U.S. Marshals Service in September 2009.[169][170]

Sheryl Weinstein, former chief financial officer of Hadassah, disclosed in a
memoir that she and Madoff had had an affair more than 20 years earlier. As
of 1997, when Weinstein left, Hadassah had invested a total of $40 million
with Bernie Madoff. By the end of 2008, Hadassah had withdrawn more than
$130 million from its Madoff accounts and contends its accounts were valued
at $90 million at the time of Madoff's arrest. At the victim impact
sentencing hearing, Weinstein testified, calling him a "beast".[171][172]

According to a March 13, 2009 filing by Madoff, he and his wife were worth
up to $126 million, plus an estimated $700 million for the value of his
business interest in Bernard L. Madoff Investment Securities LLC.[173]

During a 2011 interview on CBS, Ruth Madoff claimed she and her husband had
attempted suicide after his fraud was exposed, both taking "a bunch of
pills" in a suicide pact on Christmas Eve 2008.[2][174] In November 2011,
former Madoff employee David Kugel pleaded guilty to charges that arose out
of the scheme. He admitted having helped Madoff create a phony paper trail,
the false account statements that were supplied to clients.[175]

Bernard Madoff suffered a heart attack in December 2013, and reportedly
suffered from end-stage renal disease (ESRD).[176] According to CBS New
York[177] and other news sources, Madoff claimed in an email to CNBC in
January 2014 that he had kidney cancer, but this was unconfirmed. In court
filing from his lawyer in February 2020, it was revealed Madoff was
suffering from chronic kidney failure.[142]

Philanthropy and other activities

Madoff was a prominent philanthropist,[16][156] who served on boards of
nonprofit institutions, many of which entrusted his firm with their
endowments.[16][156] The collapse and freeze of his personal assets and
those of his firm affected businesses, charities, and foundations around the
world, including the Chais Family Foundation,[178] the Robert I. Lappin
Charitable Foundation, the Picower Foundation, and the JEHT Foundation which
were forced to close.[16][179] Madoff donated approximately $6 million to
lymphoma research after his son Andrew was diagnosed with the disease.[180]
He and his wife gave over $230,000 to political causes since 1991, with the
bulk going to the Democratic Party.[181]

Madoff served as the chairman of the board of directors of the Sy Syms
School of Business at Yeshiva University, and as treasurer of its board of
trustees.[156] He resigned his position at Yeshiva University after his
arrest.[179] Madoff also served on the Board of New York City Center, a
member of New York City's Cultural Institutions Group (CIG).[182] He served
on the executive council of the Wall Street division of the UJA Foundation
of New York which declined to invest funds with him because of the conflict
of interest.[183]

Madoff undertook charity work for the Gift of Life Bone Marrow Foundation
and made philanthropic gifts through the Madoff Family Foundation, a $19
million private foundation, which he managed along with his wife.[16] They
also donated money to hospitals and theaters.[156] The foundation also
contributed to many educational, cultural, and health charities, including
those later forced to close because of Madoff's fraud.[184] After Madoff's
arrest, the assets of the Madoff Family Foundation were frozen by a federal
court.[16]

In the media
On May 12, 2009, PBS Frontline aired The Madoff Affair, and subsequently
ShopPBS made DVD videos of the show and transcripts available for purchase
by the public at large.
In season 7 of Curb Your Enthusiasm, aired in 2009, the character George
(from Seinfeld) loses all of the money he made from an app called iToilet by
investing with Madoff.
Imagining Madoff was a 2010 play by Deb Margolin that tells the story of an
imagined encounter between Madoff and his victims. The play generated
controversy when Elie Wiesel, originally portrayed as a character in the
play, threatened legal action, forcing Margolin to substitute a fictional
character, "Solomon Galkin". The play was nominated for a 2012 Helen Hayes
Award.
A documentary, Chasing Madoff, describing Harry Markopolos' efforts to
unmask the fraud, was released in August 2011.
Woody Allen's 2013 film Blue Jasmine portrays a fictional couple involved in
a similar scandal. Allen said that the Madoff scandal was the inspiration
for the film.[185]
In God We Trust (2013), a documentary about Eleanor Squillari, Madoff's
secretary for 25 years and her search for the truth about the fraud (The
Halcyon Company).[186]
Madoff was played by Robert De Niro in the May 2017 HBO film The Wizard of
Lies, based on the best-selling book by Diana B. Henriques. Michelle
Pfeiffer plays Ruth Madoff in the film, which was released on May 20, 2017.
Madoff, a miniseries by ABC starring Richard Dreyfuss and Blythe Danner as
Bernard and Ruth Madoff, aired on February 3 and 4, 2016.[187][188]
"Ponzi Super Nova", an episode of the podcast Radiolab released February 10,
2017, in which Madoff was interviewed over prison phone.[189]
Chevelle's song "Face to the Floor", as described by the band, was a "pissed
off, angry" song about people who got taken by the Ponzi scheme that Bernie
Madoff had for all those years."[190]
The heroine of Elin Hilderbrand's novel, Silver Girl, published in 2011 by
Back Bay Books, was the wife of a Madoff-like schemer.[191]
Cristina Alger's novel, The Darlings, published in 2012 by Pamela Dorman
Books, features a wealthy family with a Madoff-like patriarch.[192]
The action of James Grippando's thriller, Need You Now, published in 2012 by
HarperCollins, was set in motion by the suicide of the Bernie Madoff-like
Ponzi schemer Abe Cushman.[193]
The protagonist of Elinor Lipman's novel, The View from Penthouse B,
published in 2013 by Houghton Mifflin Harcourt, loses her divorce settlement
by investing it with Bernie Madoff.[194]
Randy Susan Meyers's novel, The Widow of Wall Street, published in 2017 by
Atria Books, was a fictionalized account of the Madoff Ponzi scheme from the
wife's point of view.[195]
Emily St. John Mandel's novel, The Glass Hotel, published in 2020 by Alfred
A. Knopf, includes a character named Jonathan Alkaitis, who was closely
based on Madoff.[196]
See also
New York City portal
Biography portal
Business portal
Affinity fraud
Financial crisis of 2007–2008
List of investors in Bernard L. Madoff Investment Securities
Madoff investment scandal
Participants in the Madoff investment scandal
Recovery of funds from the Madoff investment scandal
White-collar crime
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External links
Wikimedia Commons has media related to Bernard Madoff.
Criminal complaint, transcripts of hearings and other documents from the
United States Department of Justice at the Wayback Machine (archived August
22, 2007)
Madoff.com The Owner's Name was on the Door at the Wayback Machine (archived
December 14, 2008)
Madoff's current location within the Bureau of Prisons system
The Independent: Madoff reveals his suffering
The Face That Launched A Thousand Lawsuits – Madoff's Legacy
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