Bernie Madoff has died in prison at the age of 82. The disgraced financier died on Wednesday morning from natural causes
Bernie Madoff, the disgraced financier who ran the largest Ponzi scheme in US history, has died in prison at the age of 82.
Madoff died on Wednesday morning from natural causes, according to sources cited by The Associated Press, at the Federal Correctional Facility in Butner, North Carolina, where he was 12 years into a 150 year prison sentence.
In February 2020, he asked for compassionate release, claiming he was in a wheelchair, needed round-the-clock care, and had only 18 months to live.
He was denied by a judge who said he’d committed ‘one of the most egregious financial crimes’ in US history.
Madoff robbed victims 37,000 victims in 136 countries of $64.8 billion, taking one’s money to pay off the other and fake investments, for two decades before finally being arrested in 2008.
The victims included celebrities, billionaires and people who could barely afford to invest with him in the first place.
Some lost everything and at least one killed themselves over the fraud. The judge in his case called it one of if not the most egregious financial crimes in history.
One of Madoff’s sons, Mark, hanged himself in December 2010 on the second anniversary of his father’s arrest, and his other son Andrew died from lymphoma in 2013. His wife Ruth moved to Greenwich, Connecticut, after his arrest to live in exile.
In December 2008, Madoff was arrested after his two sons turned him in to the FBI. He had confessed to them that there was no money in their family office, Bernard L. Madoff Investment Securities, saying it was all ‘one big lie’.
He admitted it was all ‘one big lie’ and said he’d finally been forced to come clean because all of his clients came asking for redemption as a result of the 2008 crash. Initially, he was given house arrest after posting a $10million bond. He was taken into custody shortly before his trial and was sentenced in June 2009.
Madoff was born in Queens in 1938. His father, Ralph, was a stockbroker and plumber and his grandparents had emigrated to the US from Eastern Europe.
He studied political science then law before founding Madoff Investment Securities in the 1960s. Initially, it was a penny stock trading firm. He brought on his younger brother Peter and his wife Ruth to run the books then, when his kids were old enough, hired them as executives.
Madoff died at the Federal Correctional Facility in Butner, North Carolina. Last June, his attorney’s asked for compassionate release, claiming he was dying of renal kidney failure and had 18 months to live
Madoff inside Madoff Investment Securities in December 1999, years after the scheme began. He started the firm in the 60s with $5,000, trading penny stocks
In the beginning, he made his money on the spread of buying and selling cheap penny stocks. It was legal but frowned upon by the more establish funds on Wall Street.
It wasn’t until the 1970s, when the practice became legal on bigger trades, that Madoff started making a name for himself on the Street. That was also when he befriended federal regulators – which would become crucial to how long he evaded them years later.
Madoff claims the fraud only began in the 1990s, after the Gulf War which he said stunted the market. Authorities say it went back to the mid 1980s. In the early 90s, Madoff served as the chair of NASDAQ three times.
Former SEC Chairman Arthur Levitt Jr. has admitted in the past that he sought advice from Madoff on how the market worked while he was in his position.
Madoff’s coziness with the regulators allowed him to set up and run the Ponzi scheme.
When the SEC investigated irregularities or suspicious transactions coming from his office, he assuaged them by telling them he had everything under control.
They believed him.
After his arrest, an entire overhaul was ordered to ensure similar crimes wouldn’t go unnoticed again.
His clients included Steven Spielberg, actor Kevin Bacon, former New York Mets owner Fred Wilpon and Nobel Peace Prize winner Elie Weise.
Madoff insisted in prison that he began legitimately but that he started committing fraud in the early 1990s after the Gulf War caused the market to stall.
Bernie with his wife Ruth and their son Andrew at a black tie event on Long Island in 2001. The family lived in the upper echelons of New York City society, splitting their time between Manhattan and The Hamptons
Madoff with his two sons, Mark (left) and Andrew (center) in 2001, in the Hamptons. Mark and Andrew both worked with their father. Mark killed himself on the second anniversary of Madoff’s arrest in December 2010. Andrew died of lymphoma in 2014
One view of the sprawling Madoff penthouse in Manhattan on East 64th Street. It was sold in 2014 for $14.5million
The Madoff’s palatial beachfront property in Montauk, Long Island. It was one of many homes the family owned
The Madoffs also had property in Palm Beach, Florida, that was paid for with other people’s money
In one interview with investigators after his release, he seemed to have more sympathy for himself than for his victims.
‘It was a nightmare for me. I wish they caught me six years ago, eight years ago,’ he said.
Prison cellmates and guards at Butner painted a picture of him that was unrepentant.
Madoff was arrested in December 2010 after his two sons turned him in
One said he’d tell them that people kept ‘throwing money’ at him and that they were offended if he declined to take it, so he did.
Madoff’s victims ranged from financiers who lost over $1billion to small business owners.
At least three have killed themselves, including French aristocrat and billionaire Thierry Magon de La Villehuchet and money manager Charles Murphy.
They didn’t lose their own money but had invested their clients money with Madoff.
In 2010, Madoff’s eldest son Mark killed himself in his New York City apartment. According to sources close to Bernie at the time, he looked like he’d been ‘shot’ when he found out about it.
Mark’s widow later blamed her father-in-law. She said her husband – who worked at the firm with his father but who claimed he never knew about the fraud – told ABC: ‘He couldn’t get out, he was so betrayed and so hurt by Bernie.
‘I hate Bernie Madoff. If I saw Bernie Madoff right now, I would tell him that I hold him fully responsible for killing my husband, and I’d spit in his face.’
Andrew and Mark turned their father in, ignoring his plea to them to give him 24 hours to get the family’s affairs in order before they alerted the authorities.
They say they never spoke with Bernie again after he confessed to what he had done.
Bernie’s house of cards came crashing down in 2008 when, all at once, his clients – suffering from the global financial crash – asked him for redemption. That was when he was finally forced to admit there was no money to give them
Charles Murphy and Annabella Murphy. (left) Charles invested his own client’s money with Madoff and lost everything. He killed himself in March 2017. Thierry Magon de la Villehuchet committed suicide after losing more than $1billion of his client’s money with Madoff
Their mother Ruth was the only person in the family who stuck by him.
Andrew was first diagnosed with cancer in 2003 but he treated it successfully. When it returned in 2011, he blamed the stress of his father’s crimes for his health deterioration. He died three years later in 2014.
Mark Madoff never spoke to his father again after the fraud was revealed
Bernie’s younger brother Peter was also jailed for his role in the fraud but the Madoff sons, who worked in a different department of the company, were never charged.
Andrew was being investigated for tax fraud when he died but nothing came of it. Peter Madoff spent eight years in prison for his role in the scheme and was released last June.
In 2012, he pleaded guilty to one count of falsifying records and one count of conspiracy to commit securities fraud.
In 2019, Ruth reached a settlement with some of her husband’s surviving victims to pay them $600,000.
It was a tiny fraction of the fraud he’d actually committed, but she said it was the best she could do with the limited resources she had been left.
When the FBI arrested Madoff, they froze and seized most of his assets but they let Ruth keep $2.5million for legal fees.
She has always maintained that she knew nothing of the fraud, despite doing the company books.
Madoff was arrested on December 11 then released on a $10million bond within days. On Christmas Eve that year, he and Ruth tried to kill themselves, she later said.
‘I don’t know whose idea it was, but we decided to kill ourselves because it was so horrendous what was happening,’ she told CBS 60 Minutes in 2011, complaining they’d been subjected to.
‘We had terrible phone calls. Hate mail, just beyond anything and I said: “I just can’t go on anymore.” ‘I took what we had, he took more. We took pills and woke up the next day… It was very impulsive and I am glad we woke up,’ she said.
Mark Madoff was found hanging in his Manhattan apartment in December 2010. His wife blamed his father and the shame he felt over his crimes
In a 2011 interview with CBS, Ruth complained about the death threats she and Bernie had received when he was in bail and she revealed the pair tried to kill themselves on Christmas Eve, just 10 days after his arrest, by swallowing pills
Madoff’s wife Ruth fled Manhattan in exile after his arrest in 2008. She has been living quietly in Greenwich, CT, for the last several years