Bernie Madoff is dead. The man behind the largest Ponzi scheme in history has passed away in prison at age 82. Here’s what you need to know.
UPDATE (4/30/2021, 8:05 p.m. ET): Bernie Madoff died of “hypertension, atherosclerotic cardiovascular disease and chronic kidney disease,” TMZ reported on April 30 after reviewing his death certificate. Atherosclerosis happens after “high blood pressure goes untreated,” the outlet explained (hypertension also means high blood pressure).
Bernie Madoff, the disgraced financier who pleaded guilty to running a billion-dollar Ponzi scheme, died in federal prison early Wednesday, according to the Associated Press. Bernie, 82, passed away at the Federal Medical Center in Butner, North Carolina, apparently from “natural causes.” The AP reports that its source was “not authorized to speak publicly and spoke on the condition of anonymity.” Bernie’s death comes one year after he tried to get released from prison, citing the COVID-19 pandemic. His lawyers claimed he suffered from “end-stage renal disease and other chronic medical conditions,” putting him at a greater for catching the coronavirus. Bernie’s request was denied.
Once heralded as a self-made financial guru, Bernie attracted investors with, as the AP put it, a “Midas touch [that] defied market fluctuations.” However, in 2008, the world discovered that Bernie was a fraud. He had swindled clients out billions of dollars in investments over decades in the biggest Ponzi scheme in history. In the wake of his death, here is what you need to know.
1. What Did Bernie Madoff Do?
Bernard Lawrence Madoff started an investment firm, Bernard L. Madoff Investment Securities, LLC, in 1960, per Biography. Over the next four decades, it became one of the top investment firms in the industry.
Madoff Securities had a reputation for adapting to the changing times, which supposedly gave them an edge in generating high returns on its investors’ money. The firm was one of the first to use computer technology for trading, which led to the National Association of Securities Dealers Automated Quotations (NASDAQ). Bernie served as the NASDAQ chairman for three one-year terms, which only boosted his reputation for being a financial wizard. As the business grew, Bernie got his family involved – including sons Andrew Madoff and Mark Madoff.
At one point, Bernie reported to the Securities and Exchange Commission that he was managing $17.1 billion in assets for 23 clients, per USA Today. His firm was once called “the sixth-largest market maker for Standard & Poor’s 500 stocks this year through October, executing trades on $1.86 billion of shares.”
And it all came crashing down on Dec. 11, 2008. The day before, Bernie suggested to his sons that they give out several million dollars in bonuses to the firm’s employees. This generous move was two months ahead of schedule, which raised concerns among Andrew and Mark. Also at the time, Madoff Investment Securities was struggling to pay its investors.
Bernie revealed to his sons that day that his fund was “all just one big lie” and “finished” with “absolutely nothing.” It was a Ponzi scheme, and it was falling apart. After the meeting, Andrew and Mark contacted a lawyer, who put them in touch with the SEC. One day after Bernie confessed to his sons that the business was one big scam, he was arrested and charged with securities fraud.
Bernie ran a Ponzi scheme, an investment scam that “pays existing investors with funds collected from new investors,” per Investor.gov. Organizers promise to invest your money and generate high returns with little or no risk. Instead, they use that new investment to pay those who invested earlier while often keeping some of this new money for themselves. When there are no new investors – like there were in 2008, following the global financial crisis of 2007-08 – to pump into the Ponzi scheme, the fraud collapses.
2. How Long Was Bernie Madoff Sentenced To Prison?
Bernie was arrested in December 2008. In March 2009, he pled guilty to eleven felonies. His crimes resulted in billions of dollars being lost from investors. Despite not fighting the charges, prosecutors claimed that Bernie had “not provided meaningful cooperation or assistance” in their investigation, per The New Republic. Bernie also revealed he began the Ponzi scheme in the 90s. Judge Denny Chin ultimately gave him a sentence of 150 years in prison — the longest sentence he could give. The judge also called his scheme “extraordinary evil.”
3. His Scheme Netted Many A-List Celebs.
In 2021, a court-appointed trustee has recovered more than $13 billion of an estimated $17.5 billion that investors put into Madoff’s business. In 2008, Madoff had fake account statements that said he had holdings worth $60 billion, which was just another lie in his Ponzi scheme.
Bernie’s company’s client list included some big Hollywood names (it was a 162-page document). Steven Spielberg was on the list, as well as John Malkovich, Larry King, and Kevin Bacon. However, the stars were not the focus — instead, charities like the Carl and Ruth Shapiro Family Foundation and The Jewish Company Foundation of LA lost millions.
4. Bernie’s Sons Have Both Died Since The Arrest.
Mark Madoff was found hanging in his apartment on Dec. 10, 2010 — two years to the day after his father’s arrest. He was 46. His toddler son was sleeping in the next room. Then in 2014, Bernie’s other son, Andrew, died from mantle cell lymphoma. After he announced his cancer returning, Andrew had blamed the cancer on the stress from the case. Bernie’s wife, Ruth Madoff, is still alive.
5. He Died Broke.
Bernie’s story was turned into an ABC miniseries called Madoff in 2016. Richard Dreyfuss portrayed Bernier, and Blythe Danner took on the role of his wife. Ruth said she and Bernie took “a bunch of pills” as a suicide pact on Christmas Eve 2008, per The New York Times. The suicide attempt – with Ambien and “possibly some Klonopin,” per the NYT – failed. Bernie reportedly suffered a heart attack in 2013. That year, he spoke with CNN Money, where he said he was earning $40 a month during menial prison labor. He had no money on his prison phone account, so he had to talk with CNN Money by calling collect.