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Thursday 30th November 2023 / 16 Rabiulakhir 1445

Ponzi scheme mastermind Bernie Madoff dies in US prison

NEW YORK: Bernie Madoff, mastermind of the largest financial scam in history that unraveled during the 2008 economic crisis, has died in jail. He was 82.

Madoff had been suffering from chronic kidney failure and prison chiefs had denied his request last year to be allowed to go home to die.

He was sentenced to 150 years in prison in 2009 for running a pyramid-style scheme that conned tens of thousands of people around the world and was estimated to be worth almost $65 billion. It was an ugly symbol of Wall Street excess with investors going from rich to broke overnight.

“We can confirm Bernard Madoff passed away on April 14, 2021, at the Federal Medical Center (FMC) Butner, North Carolina,” an official with the federal Bureau of Prisons told a news agency.  The statement said the cause of death needed to be determined by a medical examiner.

In February 2020, Madoff’s lawyer said the disgraced Wall Street financier was terminally ill with “kidney disease, among other serious medical conditions.”

“The Bureau of Prisons concluded in September 2019 that Madoff has less than 18 months to live because of the terminal nature of his kidney failure,” attorney Brandon Sample wrote.

He asked for compassionate release so he could mend fences with his grandchildren and die a free man but the request was rejected by the prisons bureau.

The Washington Post reported then that Madoff needed a wheelchair and 24-hour care. “I’ve served 11 years already, and, quite frankly, I’ve suffered through it,” Madoff told the paper in an interview. “You know, there hasn’t been a day in prison that I haven’t felt the guilt for the pain I caused on the victims and for my family,” he said.

Madoff was born on April 29, 1938 to Jewish parents, in humble beginnings in Queens, New York. He started as a Long Island lifeguard before entering the stock market, eventually becoming chairman of the Nasdaq stock exchange.

There, he was credited with helping revolutionize the shift in trading from face-to-face deals using his charm to wheedle billions from his clients who little suspected he was a con artist. But it was as a private money manager that he won a reputation as a financial guru.

Returns of around 10 percent, with occasional surges a great deal higher, came in so regularly that rich individuals, endowments, and supposedly expert banks lined up to give him money between the 1970s and 2000s.

But in reality he was running a shell pyramid, or Ponzi, scheme — where new clients’ capital was stolen to pay off existing clients and create the illusion of returns, until it collapsed. He lived a life of luxury, owning several palatial homes, a Manhattan apartment, yachts and a private plane.

Madoff’s fraud was revealed during the financial crisis in 2008 when he was unable to satisfy growing client demands to withdraw their investments, and many lost their savings or were unable to retire. 

Madoff confessed the fraud to his two sons in December 2008. They turned him into law enforcement and he was arrested the next day. In 2009, he pleaded guilty to 11 charges, including fraud, theft and perjury.

US authorities have seized about $4 billion and through the Madoff Victim Fund will disburse payments to more than 30,000 people around the world who were cheated out of their investments.

Madoff’s eldest son Mark killed himself on the second anniversary of the arrest. In 2014, his younger son Andrew died from cancer, blaming the fallout from the scandal for the disease’s return.

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