Bernie had around 4,800 clients when the FBI stormed his building. He defrauded these people through his Ponzi scheme in the amount of $64.8 billion dollars leading to countless bankruptcies and ruined lives. People lost their retirements. Some people committed suicide. The stories that were told about the damage Madoff caused would make anyone cry.
Some people wonder why he was able to fool so many people but the fact is his reputation on Wall Street was impeccable. He was a major factor at one point in running NASDAQ. He was involved with practically all the major stock exchange committees. People liked that he was a workaholic having saved money that he earned as a lifeguard and installing sprinkler systems to invest in penny stocks which he was so good at that he started his own small investment group.
Ruth and Bernie met when they were teenagers and were married for around 51 years when the Ponzi scheme was discovered. They had two successful sons who worked in the company. With all the above in mind, it’s fairly easy to see why people saw Bernie as a trustworthy man.
Many of his clients were large institutions where people had their retirement accounts such as 401k’s and some of these accounts had hundreds of millions of dollars in them. It was partly because of what happened with Madoff that new rules were put in place in reference to how accounts are managed.
In other words if you have money in a 401k now, there are very stringent rules for the portfolio manager to diversify the account to limit risks. Too many portfolio managers had large chunks of the money invested in Madoff so when things went under, they lost it all. Could you imagine if your employer came to you and said: “Sorry, all the money is gone?”
It would be very difficult for me to explain how Madoff did what he did because I’m not an investment guru, but the bottom line is that it was a Ponzi scheme. As long as he continued getting individual investors and organizations to invest money with him, he could pay off anyone who wanted to sell their shares. There weren’t many people wanting out because they were getting double-digit returns even during those times when the market was trending down.
Bernie would pick and choose great performing stocks and would create fake financial statements to send to his investors that showed they owned these good market performers. Everyone thought Bernie had the Midas touch and it was a sign of prestige to be invested with him.
So investors would receive fraudulent paperwork that showed their investments were making a lot of money when in fact they didn’t actually own any of the stocks listed on the financial statement. I find it shocking that Madoff never did actually trade stocks and that the Securities and Exchange Commission (SEC), never figured out what he was doing.
Six audits were performed between 1999 and when Madoff went down in 2008. One of the auditors figured out what Madoff was doing years before everything crashed. He sent a report to the SEC stating he thought it was a Ponzi scheme but somehow they let it slip the cracks and they ended up getting in huge trouble over it with many people losing their jobs.
As you can imagine, if a large amount of people wanted to move their money out of Madoff’s investment portfolio around the same time, he wouldn’t have had the money available to transfer it to them and all hell would break loose, but for 16 years this didn’t happen.
Everything was going great for Madoff then the stock market crashed in October, 2008 and people became scared and began pulling their money out of the stock market. Within a matter of weeks, Madoff’s office was getting calls to transfer money out of their accounts to various banks in the billions of dollars.
Even at the end, Bernie was trying to con large investors to invest in hopes he could cover the money going out. It didn’t work and he couldn’t keep up with the money leaving so he decided to hide some money and then turn himself in. When he confessed to his sons what he’d done, they called the FBI and turned him in even though Madoff said he was going to hide some money for them too.
His wife, Ruth (now 76 years old), didn’t want her sons to call the FBI. I can’t say whether it was for greed or not as they had been together pretty much all her life and I can only assume she loved him. Just a guess on my part, but she wasn’t exactly business savvy; not that she wasn’t intelligent. I don’t think she knew the extent of the crimes he had committed.
Bernie did what quite frankly most of the power brokers on Wall Street and the head of the SEC hoped he would and that is he pled guilty to numerous charges and was sentenced to 150 years in a maximum security prison. They didn’t want the case to go to trial because many of them would’ve ended up on the stand having to explain their complicity whether known or not. Although they didn’t completely slide through as various hearings took place on Capitol Hill that exposed a lot of wrong doing and a lot of high-powered people lost their jobs.
In researching Madoff, I strongly believe his sons had no idea what he was doing. I have this opinion for a variety of reasons including:
They turned him in to the FBI even though he said he’d turn himself in but needed around a week to get some money pigeon-holed for the family.
Neither son was found to have off-shore accounts which are what people do when they want to hide their total income from the IRS. Everything they owned was traceable and could be taken if they were sued.
The FBI and SEC were aggressively looking for as many guilty people as possible over the embarrassing scam, yet neither son was arrested.
Both sons never spoke to their father again. They also cut their mom off as long as she continued to see their dad in prison. It wasn’t until she completely cut him off from phone calls and visiting him in prison, that they allowed her to see her grandchildren.
Bernie never made them partners in the business so they wouldn’t have known the company’s financials.
He never allowed them to set up a contingency plan should he die. He told them that one of his employees, the one who they found out had been helping their dad with the Ponzi scheme, would fill them in on everything if he passed away. This man had been with Bernie from the beginning, had a high school degree, and was making millions a year.
If the boys would’ve had access to payroll they could’ve figured out that something was off. By the way, this particular employee admitted his guilt and was sentenced to 125 years in prison but died of lung cancer before he could serve his sentence.
Anyhow, just my opinion regarding his sons’ innocence but I think the evidence is pretty strong that they were as shocked as everyone else as to what their father did. His son Mark was absolutely crushed as Bernie was a hero to him and he ended up hanging himself in 2010 leaving a wife and two children behind.
Four years later his other son Andrew, died of cancer. Before he passed away (he was taking chemo at the time), he was asked to speak to students at a university about the Ponzi scheme and its aftermath when one of the students asked him why he and his brother never came out to publicly express how they were victims of their father as well. Andrew said he never felt comfortable saying he was a victim when thousands of people were the real victims of his father. He said he was ashamed and embarrassed by what his dad did. He also said he had a blessed life before his father was arrested and he didn’t deserve anyone’s pity.
When Bernie found out that Andrew had died he tried to contact Ruth but she kept her promise to her sons and didn’t talk to him. At this point both sons were gone and he had no one to console with; not that I feel sorry for him.
Over the years Bernie has met with a few reporters but besides this he’s mostly had just prison guards and other inmates to talk to which didn’t always go well for him. He got into a fight with another inmate at his prison in Butner, NC and ended up at the Duke University Medical Center in Durham, NC with serious facial trauma from being punched and broken ribs from being kicked. This happened at the beginning of his stay in prison and since then, he hasn’t had any serious problems and has made some friends who call him Uncle Bernie.
As I mentioned in the beginning, Madoff had thousands of clients and he wrecked their lives and the people around them. Way too often people who commit these types of crimes end up with short prison sentences in white-collar prisons. I’ve got to hand it to all of those involved in his prosecution who fought so hard for the families of his victims.
Some people wonder why he was able to fool so many people but the fact is his reputation on Wall Street was impeccable. He was a major factor at one point in running NASDAQ. He was involved with practically all the major stock exchange committees. People liked that he was a workaholic having saved money that he earned as a lifeguard and installing sprinkler systems to invest in penny stocks which he was so good at that he started his own small investment group.
Ruth and Bernie met when they were teenagers and were married for around 51 years when the Ponzi scheme was discovered. They had two successful sons who worked in the company. With all the above in mind, it’s fairly easy to see why people saw Bernie as a trustworthy man.
Many of his clients were large institutions where people had their retirement accounts such as 401k’s and some of these accounts had hundreds of millions of dollars in them. It was partly because of what happened with Madoff that new rules were put in place in reference to how accounts are managed.
In other words if you have money in a 401k now, there are very stringent rules for the portfolio manager to diversify the account to limit risks. Too many portfolio managers had large chunks of the money invested in Madoff so when things went under, they lost it all. Could you imagine if your employer came to you and said: “Sorry, all the money is gone?”
It would be very difficult for me to explain how Madoff did what he did because I’m not an investment guru, but the bottom line is that it was a Ponzi scheme. As long as he continued getting individual investors and organizations to invest money with him, he could pay off anyone who wanted to sell their shares. There weren’t many people wanting out because they were getting double-digit returns even during those times when the market was trending down.
Bernie would pick and choose great performing stocks and would create fake financial statements to send to his investors that showed they owned these good market performers. Everyone thought Bernie had the Midas touch and it was a sign of prestige to be invested with him.
So investors would receive fraudulent paperwork that showed their investments were making a lot of money when in fact they didn’t actually own any of the stocks listed on the financial statement. I find it shocking that Madoff never did actually trade stocks and that the Securities and Exchange Commission (SEC), never figured out what he was doing.
Six audits were performed between 1999 and when Madoff went down in 2008. One of the auditors figured out what Madoff was doing years before everything crashed. He sent a report to the SEC stating he thought it was a Ponzi scheme but somehow they let it slip the cracks and they ended up getting in huge trouble over it with many people losing their jobs.
As you can imagine, if a large amount of people wanted to move their money out of Madoff’s investment portfolio around the same time, he wouldn’t have had the money available to transfer it to them and all hell would break loose, but for 16 years this didn’t happen.
Everything was going great for Madoff then the stock market crashed in October, 2008 and people became scared and began pulling their money out of the stock market. Within a matter of weeks, Madoff’s office was getting calls to transfer money out of their accounts to various banks in the billions of dollars.
Even at the end, Bernie was trying to con large investors to invest in hopes he could cover the money going out. It didn’t work and he couldn’t keep up with the money leaving so he decided to hide some money and then turn himself in. When he confessed to his sons what he’d done, they called the FBI and turned him in even though Madoff said he was going to hide some money for them too.
His wife, Ruth (now 76 years old), didn’t want her sons to call the FBI. I can’t say whether it was for greed or not as they had been together pretty much all her life and I can only assume she loved him. Just a guess on my part, but she wasn’t exactly business savvy; not that she wasn’t intelligent. I don’t think she knew the extent of the crimes he had committed.
Bernie did what quite frankly most of the power brokers on Wall Street and the head of the SEC hoped he would and that is he pled guilty to numerous charges and was sentenced to 150 years in a maximum security prison. They didn’t want the case to go to trial because many of them would’ve ended up on the stand having to explain their complicity whether known or not. Although they didn’t completely slide through as various hearings took place on Capitol Hill that exposed a lot of wrong doing and a lot of high-powered people lost their jobs.
In researching Madoff, I strongly believe his sons had no idea what he was doing. I have this opinion for a variety of reasons including:
They turned him in to the FBI even though he said he’d turn himself in but needed around a week to get some money pigeon-holed for the family.
Neither son was found to have off-shore accounts which are what people do when they want to hide their total income from the IRS. Everything they owned was traceable and could be taken if they were sued.
The FBI and SEC were aggressively looking for as many guilty people as possible over the embarrassing scam, yet neither son was arrested.
Both sons never spoke to their father again. They also cut their mom off as long as she continued to see their dad in prison. It wasn’t until she completely cut him off from phone calls and visiting him in prison, that they allowed her to see her grandchildren.
Bernie never made them partners in the business so they wouldn’t have known the company’s financials.
He never allowed them to set up a contingency plan should he die. He told them that one of his employees, the one who they found out had been helping their dad with the Ponzi scheme, would fill them in on everything if he passed away. This man had been with Bernie from the beginning, had a high school degree, and was making millions a year.
If the boys would’ve had access to payroll they could’ve figured out that something was off. By the way, this particular employee admitted his guilt and was sentenced to 125 years in prison but died of lung cancer before he could serve his sentence.
Anyhow, just my opinion regarding his sons’ innocence but I think the evidence is pretty strong that they were as shocked as everyone else as to what their father did. His son Mark was absolutely crushed as Bernie was a hero to him and he ended up hanging himself in 2010 leaving a wife and two children behind.
Four years later his other son Andrew, died of cancer. Before he passed away (he was taking chemo at the time), he was asked to speak to students at a university about the Ponzi scheme and its aftermath when one of the students asked him why he and his brother never came out to publicly express how they were victims of their father as well. Andrew said he never felt comfortable saying he was a victim when thousands of people were the real victims of his father. He said he was ashamed and embarrassed by what his dad did. He also said he had a blessed life before his father was arrested and he didn’t deserve anyone’s pity.
When Bernie found out that Andrew had died he tried to contact Ruth but she kept her promise to her sons and didn’t talk to him. At this point both sons were gone and he had no one to console with; not that I feel sorry for him.
Over the years Bernie has met with a few reporters but besides this he’s mostly had just prison guards and other inmates to talk to which didn’t always go well for him. He got into a fight with another inmate at his prison in Butner, NC and ended up at the Duke University Medical Center in Durham, NC with serious facial trauma from being punched and broken ribs from being kicked. This happened at the beginning of his stay in prison and since then, he hasn’t had any serious problems and has made some friends who call him Uncle Bernie.
As I mentioned in the beginning, Madoff had thousands of clients and he wrecked their lives and the people around them. Way too often people who commit these types of crimes end up with short prison sentences in white-collar prisons. I’ve got to hand it to all of those involved in his prosecution who fought so hard for the families of his victims.
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