Bernie Madoff
Bernard Lawrence Madoff (/ˈmeɪdɔːf/ MAY-dawf;[2] April 29, 1938 – April 14, 2021) was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion.[3][4] He was at one time chairman of the Nasdaq stock exchange.[5] Madoff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business.
"Madoff" redirects here. For other people with the same surname, see Madoff (surname). For the TV miniseries, see Madoff (miniseries) and Madoff: The Monster of Wall Street.
Bernie Madoff
April 14, 2021 (aged 82)
- Hofstra University (BA)
- Brooklyn Law School (withdrew)
Bernard L. Madoff Investment Securities[1] (founder)
Being the chairman of Nasdaq and the Madoff investment scandal
Deceased
March 12, 2009 (pleaded guilty)
Securities fraud, investment advisor fraud, mail fraud, wire fraud, money laundering, false statements, perjury, making false filings with the SEC, theft from an employee benefit plan
150 years imprisonment, forfeiture of US$17.179 billion, lifetime ban from securities industry
December 11, 2008
Madoff founded a penny stock brokerage in 1960, which eventually grew into Bernard L. Madoff Investment Securities.[6] He served as the company's chairman until his arrest on December 11, 2008.[7][8] That year, the firm was the 6th-largest market maker in S&P 500 stocks.[9] While the stock brokerage part of the business had a public profile, Madoff tried to keep his asset management business low profile and exclusive.
At the firm, he employed his brother Peter Madoff as senior managing director and chief compliance officer, Peter's daughter Shana Madoff as the firm's rules and compliance officer and attorney, and his now-deceased sons Mark Madoff and Andrew Madoff. Peter was sentenced to 10 years in prison in 2012,[10] and Mark hanged himself in 2010, exactly two years after his father's arrest.[11][12][13][14] Andrew died of lymphoma on September 3, 2014.[15]
On December 10, 2008, Madoff's sons Mark and Andrew told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as saying that it was "one big lie".[16][17][18] The following day, agents from the Federal Bureau of Investigation arrested Madoff and charged him with one count of securities fraud. The U.S. Securities and Exchange Commission (SEC) had previously conducted multiple investigations into his business practices but had not uncovered the massive fraud.[9] On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme.
The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but an ex-trader admitted in court to faking records for Madoff since the early 1970s.[19][20][21] Those charged with recovering the missing money believe that the investment operation may never have been legitimate.[22][23] The amount missing from client accounts was almost $65 billion, including fabricated gains.[24] The Securities Investor Protection Corporation (SIPC) trustee estimated actual direct losses to investors of $18 billion,[22] of which $14.418 billion has been recovered and returned, while the search for additional funds continues.[25] On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum sentence allowed.[26][27][28][29] On April 14, 2021, he died at the Federal Medical Center, Butner, in North Carolina, from chronic kidney disease.[30][31][32][33]
Early life
Madoff was born on April 29, 1938, in Queens, New York City, to Sylvia (Muntner) and Ralph Madoff, who was a plumber and stockbroker.[34][31][35][36] His family was Jewish.[37] Madoff's grandparents were emigrants from Poland, Romania, and Austria.[38] He was the second of three children; his siblings are Sondra Weiner and Peter Madoff.[39][40] Madoff graduated from Far Rockaway High School in 1956.[41]
Madoff attended the University of Alabama for one year, where he became a brother of the Tau Chapter of the Sigma Alpha Mu fraternity, then transferred to and graduated from Hofstra University in 1960 with a Bachelor of Arts in political science.[42][43] Madoff briefly attended Brooklyn Law School, but left after his first year to found Bernard L. Madoff Investment Securities LLC and work for himself.[44][43][32]
Death
Madoff died of hypertension, atherosclerotic cardiovascular disease, and chronic kidney disease at the age of 82 in Federal Medical Center, Butner, a federal prison for inmates with special health needs near Butner, North Carolina, on April 14, 2021.[161][162][163] He was cremated in Durham, North Carolina.[164]
Personal life
Madoff met Ruth Alpern while attending Far Rockaway High School. The two eventually began dating. Ruth graduated from high school in 1958, and earned her bachelor's degree at Queens College.[165][166] On November 28, 1959, Madoff married Alpern.[40][167] She was employed at the stock market in Manhattan before[168] working in Madoff's firm, and she founded the Madoff Charitable Foundation.[169] Bernard and Ruth Madoff had two sons: Mark (1964–2010),[170] a 1986 graduate of the University of Michigan, and Andrew (1966–2014),[171][172] a 1988 graduate of University of Pennsylvania's Wharton Business School.[173][174] Both sons later worked in the trading section alongside paternal cousin Charles Weiner.[48][175]
Several family members worked for Madoff. His younger brother, Peter,[176] an attorney, was senior managing director and chief compliance officer, and Peter's daughter, Shana Madoff, also an attorney, was the firm's compliance attorney. On the morning of December 11, 2010 – exactly two years after Bernard's arrest – his son Mark was found dead in his New York City apartment. The city medical examiner ruled the cause of death as suicide by hanging.[12][13][14][11]
Over the years, Madoff's sons had borrowed money from their parents, to purchase homes and other property. Mark Madoff owed his parents $22 million, and Andrew Madoff owed them $9.5 million. There were two loans in 2008 from Bernard Madoff to Andrew: $4.3 million on October 6, and $250,000 on September 21.[177] Andrew owned a Manhattan apartment and a home in Greenwich, Connecticut, as did his brother Mark,[168] prior to his death.[12]
Both sons used outside investment firms to run their own private philanthropic foundations.[46][168][178] In March 2003, Andrew Madoff was diagnosed with mantle cell lymphoma and eventually returned to work. He was named chairman of the Lymphoma Research Foundation in January 2008, but resigned shortly after his father's arrest.[168]
Peter Madoff (and Andrew Madoff, before his death) remained the targets of a tax fraud investigation by federal prosecutors, according to The Wall Street Journal. David Friehling, Bernard Madoff's tax accountant, who pleaded guilty in a related case, was reportedly assisting in the investigation. According to a civil lawsuit filed in October 2009, trustee Irving Picard alleges that Peter Madoff deposited $32,146 into his Madoff accounts and withdrew over $16 million; Andrew deposited almost $1 million into his accounts and withdrew $17 million; Mark deposited $745,482 and withdrew $18.1 million.[179]
Bernard Madoff lived in Roslyn, New York, in a ranch house through the 1970s. In 1980, he purchased an ocean-front residence in Montauk, New York, for $250,000.[180] His primary residence was on Manhattan's Upper East Side,[181] and he was listed as chairman of the building's co-op board.[182] He also owned a home in France and an 8,700-square-foot house in Palm Beach, Florida, where he was a member of the Palm Beach Country Club, where he searched for targets of his fraud.[183][184][185] Madoff owned a 55-foot (17 m) sportfishing yacht named Bull.[182][44] All three of his homes were auctioned by the U.S. Marshals Service in September 2009.[186][187]
Sheryl Weinstein, former chief financial officer of Hadassah, disclosed in a memoir that she and Madoff had had an affair more than 20 years earlier. As of 1997, when Weinstein left, Hadassah had invested a total of $40 million with Bernie Madoff. By the end of 2008, Hadassah had withdrawn more than $130 million from its Madoff accounts and contends its accounts were valued at $90 million at the time of Madoff's arrest. At the victim impact sentencing hearing, Weinstein testified, calling him a "beast".[188][189]
According to a March 13, 2009, filing by Madoff, he and his wife were worth up to $126 million, plus an estimated $700 million for the value of his business interest in Bernard L. Madoff Investment Securities LLC.[190]
During a 2011 interview on CBS, Ruth Madoff claimed she and her husband had attempted suicide after his fraud was exposed, both taking "a bunch of pills" in a suicide pact on Christmas Eve 2008.[4][191] In November 2011, former Madoff employee David Kugel pleaded guilty to charges that arose out of the scheme. He admitted having helped Madoff create a phony paper trail, the false account statements that were supplied to clients.[192]
Bernard Madoff had a heart attack in December 2013, and reportedly had end-stage renal disease (ESRD).[193] According to CBS New York[194] and other news sources, Madoff claimed in an email to CNBC in January 2014 that he had kidney cancer, but this was unconfirmed. In a court filing from his lawyer in February 2020, it was revealed Madoff had chronic kidney failure.[155]
On February 17, 2022, Madoff's sister, Sondra Weiner, and her husband, Marvin, were both found dead with gun wounds in their Boynton Beach, Florida home. The deaths of Sondra, 87, and Marvin, 90, were labeled by police as a potential murder-suicide.[195]
Philanthropy and other activities
Madoff was a prominent philanthropist,[18][175] who served on boards of nonprofit institutions, many of which entrusted his firm with their endowments.[18][175] The collapse and freeze of his personal assets and those of his firm affected businesses, charities, and foundations around the world, including the Chais Family Foundation,[196] the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation which were forced to close.[18][197] Madoff donated approximately $6 million to lymphoma research after his son Andrew was diagnosed with the disease.[198]
He and his wife gave over $230,000 to political causes since 1991, with the bulk going to the Democratic Party.[199]
Madoff served as the chairman of the board of directors of the Sy Syms School of Business at Yeshiva University, and as treasurer of its board of trustees.[175] He resigned his position at Yeshiva University after his arrest.[197] Madoff also served on the board of New York City Center, a member of New York City's Cultural Institutions Group (CIG).[200] He served on the executive council of the Wall Street division of the UJA Foundation of New York which declined to invest funds with him because of the conflict of interest.[201]
Madoff undertook charity work for the Gift of Life Bone Marrow Foundation and made philanthropic gifts through the Madoff Family Foundation, a $19 million private foundation, which he managed along with his wife.[18] They also donated money to hospitals and theaters.[175] The foundation also contributed to many educational, cultural, and health charities, including those later forced to close because of Madoff's fraud.[202] After Madoff's arrest, the assets of the Madoff Family Foundation were frozen by a federal court.[18]