Bernie Madoff, the man behind the largest Ponzi scheme in history, dies at 82
Bernie Madoff, the architect of the largest Ponzi scheme in history and who became synonymous with Wall Street's crimes in the 2008 financial crisis, died on Wednesday at the Federal Medical Center in Butner, N.C., the Associated Press and the New York Times reported. Madoff was 82.
Born in 1938 in Queens to working-class immigrant parents, Madoff didn't take long before embarking on his career in finance. Shortly after graduating from Hofstra University in 1960, he registered his Wall Street firm Bernard L. Madoff Investment Securities using money he had saved up from summer jobs as a lifeguard and sprinkler installer. This rags-to-riches story would become an integral part of Madoff's myth-making over the years.
Madoff presented himself as a financial wizard who could guarantee his clients' consistent returns on their investments no matter the fluctuations of the stock market. His firm was also at the cutting-edge of new computer technology on Wall Street, and he served for a time as chairman of the Nasdaq electronic stock market. However, as Madoff finally admitted to his sons Mark and Andrew in December 2008, the wealth management arm of his business was just "one big lie."
A Ponzi scheme is when a financial fraudster tricks investors into thinking they're getting a legitimate return on their funds by paying them with money from new investors. Though the namesake is still '20s con artist Charles Ponzi, Madoff's version of the scheme is the largest in history, with paper losses totaling more than $60 billion. After Madoff's 2008 arrest, court-appointed trustee Irving Picard was able to recover more than $13 billion from Madoff and his family, but there was no making up the fictional paper profits. Some of Madoff's clients had believed they had as much $60 billion in holdings with him.
The fallout from the scheme was more than just financial; there was also a stark human cost. Multiple defrauded investors died by suicide after their comfortable wealth was revealed to be an illusion. Mark Madoff himself died by suicide on Dec. 11, 2010, two years after his father's arrest (Madoff's sons had reported him to authorities after he confessed the nature of the "one big lie" to them). Andrew Madoff died of cancer on Sept. 3, 2014; he had blamed the stress of the scandal on his cancer returning after he first fought it off in 2003. According to Ruth Madoff, she and her husband had both attempted suicide on Christmas Eve 2008, but were unsuccessful.
Madoff's clients included charities, universities, and Hollywood luminaries like Steven Spielberg and Kevin Bacon. Hollywood was also particularly interested in his downfall. The 2016 ABC miniseries Madoff starred Richard Dreyfuss and Blythe Danner as Bernie and Ruth Madoff, while Robert De Niro and Michelle Pfeiffer played the couple in the 2017 HBO movie The Wizard of Lies.
After pleading guilty in 2009, Madoff was sentenced to 150 years in prison, the maximum possible sentence. In February 2020, after learning he had terminal kidney disease, Madoff applied for compassionate release from prison so he could die outside its walls, but his application was denied.