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Ponzi schemer Bernie Madoff dies in prison aged 82

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Bernard Madoff, the mastermind behind the worst financial scam in history, has died in prison at the aged of 82, US media reported Tuesday.

Madoff was sentenced to 150 years in prison in 2009 for running a pyramid-style scheme that defrauded tens of thousands of people around the world.

The scheme was estimated to be worth anywhere between $25 billion and $63 billion.

For decades, Madoff enjoyed an image as a self-made financial guru whose Midas touch defied market fluctuations.

A former chairman of the Nasdaq stock market, he attracted a devoted legion of investment clients – from Florida retirees to celebrities such as famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax.

But his investment advisory business was exposed in 2008 as a multibillion-dollar Ponzi scheme that wiped out people’s fortunes and ruined charities and foundations.

He became so hated he had to wear a bulletproof vest to court.

Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was “deeply sorry and ashamed”.

“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 at the sentencing. “He cheated his victims out of their money so he and his wife (…) could live a life of luxury beyond belief.”

US District Judge Denny Chin showed no mercy, sentencing Madoff to the maximum 150 years in prison.

“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,” Chin said.

‘Madoff schemes’

Madoff was born in 1938 in a lower-middle-class Jewish neighborhood in Queens.

In the financial world, the story of his rise to prominence – how he left for Wall Street with his brother Peter in 1960 with a few thousand dollars saved from working as a lifeguard and installing sprinklers – became legend.

In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a midtown Manhattan high-rise.

There, with his brother and later two sons, he ran a legitimate business as middlemen between the buyers and sellers of stock.

Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission (SEC) on the system.

But what the SEC never found out was that behind the scenes, in a separate office kept under lock and key, Madoff was secretly spinning a web of phantom wealth by using cash from new investors to pay returns to old ones.

Authorities say that over the years, at least $13 billion was invested with Madoff. An old IBM computer cranked out monthly statements showing steady double-digit returns, even during market downturns. As of late 2008, the statements claimed investor accounts totaled $65 billion.

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 detailing trades were “all fake”.

The massive fraud brought fresh meaning to “Ponzi scheme,” named after Charles Ponzi, who was convicted of mail fraud after bilking thousands of people out of a mere $10 million between 1919 and 1920.

“Charles Ponzi is now a footnote,” said Anthony Sabino, a defense lawyer specializing in white collar criminal defense. “They’re now Madoff schemes.”

(FRANCE 24 with AP, AFP)

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