NEW YORK (AP) – Bernard Madoff, the infamous architect of an epic security fraud that burned thousands of investors, outwitted regulators and handed him a 150-year prison sentence, died behind bars early Wednesday. He was 82.
Madoff’s death at the Federal Medical Center in Butner, North Carolina, has been confirmed by his attorney and the U.S. Bureau of Prisons.
Last year, Madoff’s lawyers asked a court without success to release him from prison during the coronavirus pandemic, saying he was suffering from end-stage kidney disease and other chronic medical conditions.
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His death was due to natural causes, a person familiar with the matter told The Associated Press. The person was not authorized to speak in public and spoke to the AP on condition of anonymity.
For decades, Madoff enjoyed an image as a self-made financial guru whose Midas touch withstood the fluctuations in the market. A former Nasdaq stock market chairman, he has attracted a dedicated legion of investment clients – from retirees in Florida to celebrities such as film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax.
But its investment advisory firm was exposed in 2008 as a Ponzi scheme that wipes out people’s fortunes and destroys charities. He became so hated that he wore a bulletproof vest to court.
The fraud is arguably the largest in Wall Street’s history.
Bernard Madoff leaves US court in Manhattan, New York, after bail application, January 5, 2009. (AP Photo / Kathy Willens, File)
Over the years, trustees appointed by the court to withdraw the scheme have recovered more than $ 14 billion from about $ 17.5 billion of investors in Madoff’s business. At the time of Madoff’s arrest, fake account statements told customers they owned $ 60 billion.
Madoff pleaded guilty in March 2009 to security fraud and other charges, saying he was “very sorry and ashamed.”
After living under house arrest for several months at his $ 7 million penthouse apartment in Manhattan, he was handcuffed to jail amid widespread applause from angry investors in the courtroom.
“He stole from the rich. He stole from the poor. He stole from the in-between. He had no values, “former investor Tom Fitzmaurice told the judge during sentencing. “He deceived his victims out of their money so that he and his wife … could lead a lavish life.”
Madoff’s attorney in recent years, Brandon Sample, said in a statement that the financier “lived with guilt and remorse for his crimes until his death.”
‘Although the crimes Bernie was convicted of determined who he was – he was also a father and a husband. He was gentle and an intellectual. Bernie was by no means perfect. But no one is, ‘said Sample.
U.S. District Judge Denny Chin sentenced Madoff to the maximum term.
“The message must be sent here that the crimes of Mr. Madoff was extremely angry and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that only takes place on paper, but that it is instead … one that is staggering. human toll, ”Chin said.
A judge has issued a restraining order to strip Madoff of all his personal property, including real estate, investments and $ 80 million worth of assets, which his wife, Ruth, allegedly claimed from her. The order left her with $ 2.5 million.
The scandal also took a personal toll on the family: one of his sons, Mark, killed himself on the second anniversary of his father’s arrest in 2010. Madoff’s brother, Peter, who helps run the business has been sentenced to 10 years in prison in 2012, despite allegations that he was in the dark about his brother’s misdeeds.
Madoff’s other son, Andrew, died of cancer at the age of 48. Ruth is still alive.
Bernard Madoff, right, leaves the U.S. District Court in Manhattan, New York, following a bail application, January 5, 2009. (AP Photo / Kathy Willens, File)
Jerry Reisman, a lawyer for about three dozen Madoff victims, said he spoke to several after Madoff’s death.
“Some of them say they enjoy this day,” he said. “Nobody sees it as a big loss. No one is going to mourn Bernie Madoff. They are glad they survived him. ”
Madoff was born in 1938 in a lower-middle-class Jewish neighborhood in Queens. In the financial world, the story of his fame – how he left for Wall Street with Peter in 1960 with a few thousand dollars to work as a lifeguard and install sprinklers – has become a legend.
‘They were two struggling children from Queens. They worked hard, ”said Thomas Morling, who worked closely with the Madoff brothers in the mid-1980s, setting up and managing computers that made their business a reliable off-the-floor business leader.
“When Peter or Bernie said something they were going to do, their word was their bond,” Morling said in a 2008 interview.
In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a Midtown-Manhattan building. There, with his brother and later two sons, he ran a legitimate business as a middleman between the buyers and sellers of stock.
Madoff raised his profile by using the expertise to launch Nasdaq, the first electronic stock exchange, and so respected that he advised the Securities and Exchange Commission on the system. But what the SEC never realized was that behind the scenes in a separate office held by lock and key, Madoff secretly spun a web of phantom wealth by using cash from new investors to return on to give old.
An old IBM computer has shown monthly statements showing steady double-digit returns, even during market downturns. At the end of 2008, investment accounts amounted to $ 65 billion.
Frank DiPascali, the former chief financial officer for prison financier Bernard Madoff, is leaving court in New York after being released on $ 10 million bail on June 22, 2010. (AP Photo / Larry Neumeister, File)
The Ugly Truth: No securities were ever bought or sold. Madoff’s chief financial officer Frank DiPascali said in a guilty plea in 2009 that the statements about trade were “all false.”
His clients, many Jews like Madoff and Jewish charities, said they did not know. Among them was the Nobel laureate and Holocaust survivor Elie Wiesel, who recalled that she had met Madoff years earlier during a dinner where they talked about history, education and Jewish philosophy – not money.
Madoff ‘made a very good impression’, Wiesel said during a panel discussion in 2009 about the scandal. Wiesel admitted that he bought a “myth he created around him that everything was so special, so unique that it had to be secret.”
Like many of his clients, Madoff and his wife enjoy a lavish lifestyle. They owned the Manhattan apartment, a $ 11 million estate in Palm Beach, Florida and a $ 4 million house on the edge of Long Island. There was another house in the south of France, private jets and a yacht.
It all crashed in the winter of 2008 with a dramatic confession. In a meeting with his sons, he admitted that his business was ‘all just one big lie’.
After the meeting, a lawyer for the family contacted regulators who notified the federal prosecutors and the FBI. Madoff was in a bathrobe when two FBI agents arrived at his door unannounced on a December morning. He invited them in and then confessed after being asked if there was an innocent statement, a criminal charge said.
Madoff replies, “There is no innocent statement.”
Madoff insisted he acted alone – something the FBI never believed.
A trustee has been appointed to recover funds – sometimes by suing hedge funds and other large investors who have come forward. The effort continues and to date, about 70% of the lost funds have returned to investors.
More than 15,400 claims against Madoff have been filed.
At Madoff’s sentencing in 2009, the angry former clients demanded the highest punishment. Madoff himself spoke in a monotonous manner for about ten minutes. At various times he referred to his monumental deception as a ‘problem’, ‘a mistake of judgment’ and ‘a tragic mistake’.
He claims that he and his wife were tormented and said that she “cried every night to sleep, knowing all the pain and suffering I had caused.”
“It’s also something I live with,” he said.
Bernard Madoff arrives in federal court in Manhattan, New York on March 12, 2009 (AP Photo / Louis Lanzano, File)
Then Ruth Madoff, who has often been a target for contempt of victims since her husband’s arrest, said she was also deceived by her sweetheart in high school.
“I’m ashamed and ashamed,” she said. “Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man I have known all these years. ”
About a dozen employees and employees of Madoff have been charged. Five stood trial in 2013.
DiPascali was the prosecutor’s star witness. He recounted how Madoff summoned him just before the exposure of the scheme.
“He stared out the window all day,” DiPascali testified. “He turns to me and he cries, ‘I’m at the end of my rope. … Do you not understand it? The whole damn thing is a scam. ”
Eventually, this fraud gave meaning to the ‘Ponzi scheme’, named after Charles Ponzi, who was convicted of postal fraud after costing thousands of people out of a meager $ 10 million between 1919 and 1920.
“Charles Ponzi is now a footnote,” said Anthony Sabino, a defense attorney who specializes in white-collar criminals. “These are Madoff schemes now.”