Infamous criminal mastermind dies in jail

 

Bernie Madoff, whose US$65 billion (A$84 billion) scam made him one of the world's most hated criminals and destroyed his family, has died in prison, officials said.

The 82-year-old fraudster died on Wednesday at the secure federal medical centre in Butner, North Carolina, where he was serving a 150-year sentence, The New York Post reports.

The Associated Press reported that Madoff, who had been suffering from end-stage kidney disease and other chronic ailments, died of natural causes.

He would have turned 83 on April 29.

His epic stock fraud, which came to light amid the global financial crisis of the late 2000s and remains the biggest in Wall Street history, left more than 37,000 victims in 136 countries in its wake.

Burned investors ranged from retirees who entrusted him with their lives' savings to celebrities such as Hollywood power couple Kevin Bacon and Kyra Sedgwick, former Disney studio chief Jeffrey Katzenberg and legendary baseball Hall of Famer Sandy Koufax.

A raft of universities and nonprofit organisations also took devastating hits, including Yeshiva University, where Madoff served on the board, which lost more than $100 million, about 8 per cent of its endowment.

 

Disgraced financier Bernie Madoff has died in prison.
Disgraced financier Bernie Madoff has died in prison.

RELATED: Sad new life of exiled Ruth Madoff

New York University, the Elie Wiesel Foundation for Humanity and the International Olympic Committee were also ripped off, as were several municipal and union pension funds.

Mets owners Fred Wilpon and Saul Katz were among the investors who cashed out their phony profits but later had to pay back ill-gotten gains - forcing them to sell a minority stake in the team and to slash its payroll, with predictably disastrous results.

Madoff's massive ripoff was tied to at least four suicides, including that of his elder son, Mark, who hanged himself on the second anniversary of the fraudster's 2008 arrest and left behind a bitter note.

"Bernie, now you know how you have destroyed the lives of your sons by your life of deceit. F**k you," wrote Mark, 48.

Younger son Andrew also blamed Madoff for the recurrence of the rare cancer, mantle-cell lymphoma that killed him in 2014, also at 48.

"One way to think of this is the scandal and everything that happened killed my brother very quickly. And it's killing me slowly," Andrew told People magazine about a year and a half before he died.

He further vowed: "Even on my deathbed, I will never forgive him for what he did."

Madoff's wife, Ruth, never divorced him but told the US 60 Minutes in 2011 that she hadn't spoken to him since Mark's suicide.

In 2017, The Post tracked her down in Old Greenwich, Connecticut, where she was living in virtual exile in a 989-square-foot rental apartment.

RELATED: Madoff says loss of sons more painful than criminal guilt

Public outrage against Madoff led to angry protests outside the Manhattan federal courthouse where he was prosecuted and the Upper East Side apartment building where he lived in a duplex penthouse.

Ahead of one trip to the court, during which he wore a bulletproof vest under his jacket, Madoff was confronted by a mob that had to be held back by metal barricades - as well as an enraged financial trader who held up a signing that said: "Bernie, it's not too late to do the right thing: JUMP!"

The dramatic arc of the scandal led to countless news reports, dozens of books and an ABC miniseries starring Richard Dreyfuss and an Emmy-nominated HBO movie with Robert De Niro in the title role.

A Queens native, Madoff founded his eponymous financial firm, Bernard L. Madoff Investment Securities, in 1960 and began as a "market maker" who accepted buy and sell orders from brokerage houses.

Instead of charging a commission, Madoff pocketed the 12½-cent spread between the bidding and asking prices, and raked in massive profits by paying brokerages a few cents per trade to provide him with a huge volume of orders.

His success led him to be named chairman of the NASDAQ three times and he also launched a hedge fund that he used to carry out his Ponzi scheme.

Robert De Niro pictured as Madoff in 2017 movie The Wizard of Lies.
Robert De Niro pictured as Madoff in 2017 movie The Wizard of Lies.

Madoff claimed to employ a "split strike conversion" investment strategy that consistently generated profits of 12 to 15 per cent a year regardless of market conditions.

He cultivated an air of exclusivity by tightly controlling access to the fund, while also employing one of the oldest tricks in the book - the affinity fraud - by primarily targeting the wealthy Jewish communities of New York and Florida of which he was a member.

The Securities and Exchange Commission was repeatedly warned about Madoff as early as 1992 - including in a 21-page 2005 analysis by independent account expert Harry Markopolos titled "The World's Largest Hedge Fund is a Fraud" - but Madoff successfully duped investigators during five inquiries.

A 2009 inspector general's report later found that "a thorough and competent investigation or examination was never performed," leading to the discipline of eight SEC employees.

But the inspector general found no wrongdoing with regard to the "romantic relationship" between former SEC Assistant Director Eric Swanson and Madoff's niece, Shana Madoff, who was his firm's compliance lawyer. The couple began dating in 2006 and married in 2007; she now works as a yoga instructor in Westport, Connecticut.

Madoff ran his scam from the 17th floor of the iconic Lipstick Building at East 53rd Street and Third Avenue, where his legitimate, market-making business was housed upstairs on the 18th and 19th floors.

There, he insisted on decorating virtually everything in black or grey, and was obsessed with cleanliness and orderliness to the point that he was seen dusting the two-foot sculpture of a screw behind his desk, aligning the rugs in the lobby and insisting that all the blinds be at the same height and all the computer monitors level and angled identically.

Madoff even repeatedly dropped his trousers - in full view of male and female employees alike - to ensure his shirt buttons were lined up properly.

But his carefully constructed house of cards collapsed on December 11, 2008, when he was busted by the FBI for securities fraud.

The arrest came as a result of a tip by his sons, who both worked for his market-making business, to whom he had confessed the night before - ahead of his company's Christmas party - that his hedge fund was "all just one big lie" and "basically, a giant Ponzi scheme" that was on the brink of being tapped out.

When FBI agents showed up at his penthouse, one told him they were there "to find out if there's an innocent explanation."

"There is no innocent explanation," Madoff confessed before being hauled off in handcuffs.

He was released on bond and pleaded guilty as charged in March 2009 to 11 counts of fraud, money laundering, false statements, perjury, making a false filing to the SEC and theft from an employee benefit plan.

During a 10-minute recitation of his crimes, Madoff said he began his scam in the early 1990s and admitted that "I knew what I was doing was wrong, indeed criminal."

"When I began the Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients," he claimed.

 

Madoff’s wife Ruth never divorced him but said in 2011 she hadn’t spoken to him in since their son Mark’s suicide.
Madoff’s wife Ruth never divorced him but said in 2011 she hadn’t spoken to him in since their son Mark’s suicide.

 

"As the years went by I realised this day, and my arrest, would inevitably come."

Judge Denny Chin immediately revoked Madoff's bond and later sentenced him to the maximum punishment for his "extraordinarily evil" crimes during a proceeding at which nine victims spoke, with some breaking down in tears as they described how he'd ruined their lives.

"I used to think that it didn't matter if he got 150 years - what would that do for the victims?" Sharon Lissauer said.

"But now . . . I think he should spend his whole life in jail because what he has done is just despicable."

For his part, Madoff delivered a monotone apology during which he said, "I live in a tormented state now, knowing of all the pain and suffering that I have created."

At one point, Madoff turned briefly to face the packed gallery.

"I am sorry. I know that doesn't help you," he said.

Following Madoff's sentencing, authorities sold off his penthouse on East 64th Street, as well as a beach house in Montauk, Long Island; a sprawling, waterfront home in Palm Beach, Florida; and a Mediterranean-style village in Cap d'Antibes on the French Riviera.

Police also arranged several auctions of the treasure trove of luxury possessions that he and his wife accumulated, including high-end jewelry, watches, fine wines, antique furniture, multiple sculptures of bulls and a fur coat that she tried in vain to take with her when US deputy marshals evicted her from the penthouse.

A blue satin Mets team jacket with Madoff's last name embroidered in orange on the back sold for US$14,500 and 14 pairs of his boxer shorts went for US$200.

Bernard Lawrence Madoff was born April 29, 1938, in Laurelton, Queens, to Ralph Madoff and Sylvia "Susie" Munter Madoff.

 

Actress Zsa Zsa Gabor lost millions as a result of investments with the swindler. Picture: AP Photo/Kevork Djansezian, File
Actress Zsa Zsa Gabor lost millions as a result of investments with the swindler. Picture: AP Photo/Kevork Djansezian, File

 

In 1963, a stock broker-dealer business run out of the family's home - Gibraltar Securities, registered in Susie's name - was among 48 firms cited by the SEC for failing to file reports and voluntarily shut down to avoid prosecution.

Madoff, the middle of three children, graduated from Far Rockaway High School and attended the University of Alabama for one year before transferring to Hofstra University.

After marrying Ruth, his high school sweetheart, in 1959, Madoff graduated in 1960; his college ring sold for $6,000 at an auction in 2010.

Madoff briefly attended Brooklyn Law School before using US$5,000 in savings from part-time jobs as a lifeguard and sprinkler-system installer to start his finance business, which he initially ran out of father-in-law Saul Alpern's accounting office near Manhattan's Bryant Park.

The firm helped Madoff recruit investors, eventually steering hundreds of millions of dollars his way even after Alpern retired.

But Madoff took his marriage vows about as seriously as he did his balance sheets, engaging in a two-year affair with Sheryl Weinstein, then the CFO of the Jewish women's charity Hadassah, who described their hotel-room trysts during the mid-1990s as "surprisingly exciting" in a memoir titled Madoff's Other Secret.

Weinstein also entrusted Madoff with both Hadassah's money and her own, with the charity later forced to give back US$45 million in crooked profits and Weinstein winding up among the victims who spoke at his sentencing, where she called him a "beast" and an "equal-opportunity destroyer."

Federal prosecutors alleged in court papers that Madoff was also involved "in a love triangle" with one of his employees, but the sordid details never emerged.

Five workers, including the unidentified lover, were convicted by a jury of conspiring with Madoff, while nine other employees and associates pleaded guilty to various charges tied to his fraud.

They included Madoff's younger brother, Peter, who'd been the firm's CFO and got slapped with a 10-year prison term. He was scheduled for release in August 2020.

Madoff's older sister, Sondra Wiener, also took a major hit when his scam collapsed, losing an estimated US$3 million nest egg that forced her and husband Marvin to sell their home at the ritzy BallenIsles Country Club in Palm Beach Gardens.

One of their sons, Charles Wiener, was a 30-year Madoff employee who told The Post in January 2009 the fraud wiped him out and was "emotionally devastating to our entire family."

Charles, his wife and parents were later sued by Madoff's bankruptcy trustee for allegedly pocketing more than US$1.7 million in crooked profits.

They settled for an undisclosed amount.

During the final months of his life, Madoff tried desperately to get out of prison, filing a request for clemency from President Trump that went unanswered and seeking compassionate release from the Bureau of Prisons.

When the BOP turned him down, Madoff filed another request with the judge who sentenced him, but his bid was opposed by prosecutors who said that his dying in prison would be "wholly justified" and noted that only 20 of about 520 victims who weighed in on the issue favoured freeing him.

Madoff is survived by his wife, Ruth; six grandchildren; sister Sondra Wiener and brother Peter Madoff.

This article originally appeared on the New York Post and is published here permission.

 

 

 

 

 

 

Originally published as Infamous criminal mastermind dies in jail



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