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Ponzi mastermind Bernard Madoff dies at the age of 82

Bernard Madoff, the investment manager who orchestrated the largest Ponzi scheme in history, has died, according to US media reports.

Madoff, 82, died in a federal prison in North Carolina, where he was serving a 150-year sentence after pleading guilty in 2009.

A Wall Street legend for his seemingly golden touch, Madoff was a prominent broker who served as chairman of the Nasdaq Stock Exchange in the early 1990s. His firm, Bernard L Madoff Investment Securities, also managed a growing pile of private and institutional money and reported stable, market-beating returns.

But in 2008, he confessed to his sons that the company had become a massive Ponzi scheme that hid years of losses. That was “a big lie,”

; he told his family. Although he claimed to be the master of a strategy known as “split strike conversion”, Madoff had simply used new investors’ money to pay the existing ones.

After Madoff’s sons notified him, he initially accused the $ 64.8 billion scheme. Based on the value of investors’ accounts from November 2008. But Irving Picard, the trustee accused of recovering money from Madoff’s victims, determined that everything except $ 17 billion. Was imaginary. The fraud wiped out fortunes, poisoned relationships and ended up destroying Madoff’s family.

Both of his sons worked in the family business. One died of suicide two years after Madoff confessed to his crime; another died of cancer in 2014. A brother, Peter Madoff, was released from prison last year after serving nine years for forging documents and other crimes related to the scheme.

Madoff and his wife Ruth were deprived of most of their assets, including their $ 14.5 million penthouse. Manhattan and a luxurious 56 foot yacht named “Bull”. She dyed her hair red to avoid being recognized in public.

After more than a decade of litigation, Picard has recovered $ 14 billion. From wealthy investors and hedge funds who took money out of the scheme, and banks and asset managers who recommended it to their clients.

Madoff was born in Queens, New York, in 1938 into a middle-class family. After his father’s sports equipment failed, he supported himself through college by installing sprinkler systems. In 1960, he founded a small brokerage, in office loans borrowed from his father-in-law. His business grew by leaps and bounds, in part because he used the controversial tactic of paying merchants to send their orders to him.

By the 1970s, he had also started a side business that managed money for a number of wealthy Jewish families. Its remarkably reliable returns attracted growing interest both in the United States and among asset managers abroad.

Madoff’s star results had long triggered suspicion of Wall Street. Traders at many of the major U.S. banks complained that they never encountered him as a counterparty. Despite receiving repeated tips to investigate him, the U.S. Securities and Exchange Commission failed to uncover fraud.

Bernard Madoff told FT in a 2011 interview from prison: ‘You have to understand my story. I started with $ 500 in capital. I saw my father go bankrupt. I was very driven ‘© Daniel Acker / Bloomberg

Madoff benefited from his reputation as Wall Street stands. In addition to chairing the Nasdaq, he served as vice president of the National Association of Securities Dealers, an industry regulatory group.

Many of his clients remained with him for decades, so he never had to produce money that he claimed he had earned for them. But the house of cards collapsed in late 2008, triggered by the broader financial crisis. When the stock market crashed, investors moved to pull billions of dollars that Madoff did not have.

The fallout caused shock and panic from Manhattan to Palm Beach, Florida, where Madoff had recruited many of his investors to the Palm Beach Country Club.

Among the thousands of investors deceived by Madoff were Mort Zuckerman, the real estate magnate, the pension fund in the city of Fairfield, Connecticut, the Royal Bank of Canada and the Hadassah Jewish Charity. Many, including Holocaust survivor Elie Wiesel, were Jewish, as was Madoff.

“We believed he was God, we trusted everything in his hands,” Wiesel said at the time, adding that Madoff was “one of the greatest villains, thieves, liars, criminals.”

The losses suffered by the Wilpon family were considered one of the reasons why they were eventually forced to sell their New York Mets baseball team last year to hedge fund manager Steve Cohen for $ 2.4 billion. Madoff investments have also contributed to many years of financial strain at Yeshiva University in New York, where he had been a member of the board.

In a prison interview awarded to the Financial Times in 2011, Madoff acknowledged his crimes and offered a self-serving justification.

“You must understand my story,” he sighed. “I started with $ 500 in capital. I saw my father go bankrupt. I was very driven. But I was always outside the club, the club was the New York Stock Exchange and companies with white shoes. They fought against me every step of the way. ”

When he handed down Madoff’s verdict in 2009, Denny Chin judged it otherwise. He described Madoff’s crimes as “extraordinarily evil. . . Not just a bloodless economic crime. . .[but] one that takes a dizzying human toll. ”

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