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Bernie Madoff Dies In Prison

Bernie Madoff, the mastermind behind the biggest investment fraud in U.S. history, has died in prison at the age of 82. Madoff was serving a 150-year prison sentence for his scheme, which investigators said defrauded as many as 37,000 people in 136 countries over four decades with his Ponzi scheme. The cause of death was cited as “natural causes”, but Madoff was also being treated for liver disease. He would have turned 83 on April 29.

Madoff pleaded guilty in 2009 to a scheme that investigators said started in the early 1970s and defrauded as many as 37,000 people in 136 countries over four decades by the time he was busted on Dec. 11, 2008 after his two sons turned him in.

For more than 50 years, Bernie Madoff was renowned on Wall Street, a big money manager who founded his own firm at age 22 and became non-executive chairman of the Nasdaq in 1990. He was credited with helping develop some of the systems and market structures that moved the stock market beyond the trading floor and gave rise to modern, electronic trading.

Madoff’s victims included the famous — director Steven Spielberg, actor Kevin Bacon, former New York Mets owner Fred Wilpon and Nobel Peace Prize winner Elie Weisel — and ordinary investors., ripping off tens of thousands of people of as much as $65 billion.

Madoff–who subsequently earned the dubious nickname “Made Off”–did not execute a single trade for his advisory clients for years. Rather than employing a so-called split-strike conversion strategy as he claimed, he simply deposited investors’ funds in a Chase bank account, paying off new customers with funds from earlier customers in a classic pyramid scheme, and then providing his clients with falsified account statements. The investment “returns” shown on those statements — some $50 billion in all — were pure fiction.

In court, Madoff insisted that it was all his idea and that his family knew nothing, even though his wife, Ruth, had once kept the books, his sons were senior officers, and his younger brother, Peter, was chief compliance officer.

In addition to Madoff, more than a dozen individuals, including Peter Madoff, were convicted of federal crimes, but none of the others was accused of knowing about the fraud. JPMorgan Chase, Madoff’s primary bank, paid $2.6 billion to the U.S. government and Madoff victims in 2014 to settle allegations that it did not maintain adequate controls. After Chase instituted some unspecified reforms, prosecutors dropped charges against the bank.

Last June, a judge denied a request for compassionate release, saying Madoff committed “one of the most egregious financial crimes of all time,” and that “many people are still suffering.”

 



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