Disgraced financier Bernie Madoff will go down in infamy for orchestrating the largest Ponzi Scheme in history, conning investors out of $65 billion over several decades.
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Madoff pleaded guilty to 11 felony charges including securities fraud and money laundering in 2009. He was sentenced to 150 years in prison and died 12 years into his sentence at the age of 82 in April 2021.
“He stole from the rich. He stole from the poor. He stole from the in-between. He had no values,” said former investor Tom Fitzmaurice at Madoff’s sentencing, per AP News. “He cheated his victims out of their money so he and his wife … could live a life of luxury beyond belief.”
Netflix is set to revisit the con that rocked the 2008 financial crisis and unpack how Madoff used his status as a respected money manager to perpetrate the ruse in a new four-part docuseries “Madoff: The Monster of Wall Street” hitting the streamer on January 4.
The series chronicles Madoff’s rise to power and the poor oversight that allowed the scam to flourish. So far, only $14 billion in recovered funds has been distributed to victims so far, per ABC News, and the fallout of Madoff’s fraud is still felt today.
Here’s everything you need to know about Madoff and his infamous Ponzi scheme.
Who Was Bernie Madoff?
Before Bernie Madoff became a Wall Street powerhouse, the New York native came from humble beginnings. After growing up in Queens and attending Hofstra University, he started Bernard L. Madoff Investment Securities with just a few thousand dollars.
The firm traded penny stocks in the 1960s until Madoff convinced family and friends to invest with him, using an investing strategy called a split-strike conversion. He promised big returns to his clients and he delivered, however, he was keeping all the funds in a single Chase bank account. After decades in business, he became one of Wall Street’s biggest and most respected players.
Madoff was also instrumental in launching the Nasdaq, the first electronic stock exchange, in the 1970s and he even worked with the Securities and Exchange Commission (SEC) on the project, per The Guardian.
He later became chair of the Nasdaq in the 1990s. That, coupled with big returns on investments gave him the credibility investors needed to trust him with their assets. Some of his most notable investors included Steven Spielberg, Kevin Bacon, and Holocaust survivor Elie Wiesel.
What Did Bernie Madoff Do?
Bernie Madoff’s legitimate business endeavors and his status distracted from a $65 billion Ponzi Scheme that was hidden behind the scenes. A Ponzi Scheme is when investors are told their funds would be used for investment opportunities but were actually given as compensation to earlier investors, in other words, Madoff was robbing Peter to pay Paul.
The dark side of his business was hidden on an entirely different floor of his office that had very limited access, even Madoff’s sons who worked at the company were allegedly out of the loop.
To keep his ruse going, he printed false monthly statements that showed steady double-digit returns.
Despite several alarms made to the SEC about the too-good-to-be-true nature of Madoff’s business, his power in the industry and the billions of dollars involved allowed the scheme to prosper for years.
What Happened to Bernie Madoff?
The woes of the 2008 financial crisis left Madoff unable to continue his Ponzi Scheme with investors who were scrambling to gather back their assets. He knew the game was over when he only had $300 million left of investor money in his account, so he came clean to his sons, telling them the family business was “all just one big lie,” per AP News.
His sons, Andrew and Mark Madoff, then turned him in to the FBI, and Madoff was arrested the next day. He pleaded guilty to several counts of fraud in March 2009 and was released on a $10 million bond. Months later he was sentenced to 150 years in prison.
After being slapped with the maximum possible sentence, U.S. District Judge Denny Chin said: “Here, the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead … one that takes a staggering human toll.”
Twelve years into Madoff’s sentence, he died behind bars due to “natural causes related to his failing health,” according to the outlet. He was 82 years old.
“No one sees this as a great loss,” said Jerry Reisman at the time, an attorney who represented a number of Madoff’s victims. “No one is going to mourn Bernie Madoff. They are happy they have survived him.”
Madoff’s son Mark died by suicide on the second anniversary of his father’s arrest in 2010, and his other son Andrew died from cancer in 2014. His wife, Ruth, is still alive today.
What Was Bernie Madoff’s Net Worth?
Before Madoff’s empire came crashing down, ABC News reported that Madoff and his wife, Ruth, had a total net worth of $823 million by the end of 2008.
According to the outlet, the assets consisted of $22 million worth of homes in Manhattan, The Hamptons, Palm Beach, and France, plus $17 million in cash, $45 million in securities, and his investment business valued at $700 million.
After Madoff was sentenced in 2009, a judge ordered him to forfeit all of his property, real estate, and investments, in addition to $80 million of Ruth’s personal assets, leaving her with $2.5 million, according to AP News.
Bernie Madoff’s posthumous net worth is estimated to be negative $17 billion.
