NEW YORK (CBSNewYork) – Bernie Madoff, the financier who pleaded guilty to running a massive rip off of investors, has died in a federal prison.
As CBS2’s Alice Gainer reports, he had been sick for some time with end-stage renal disease and other chronic medical conditions.
More than 15,000 claims against Madoff were filed. About 70% of lost funds to investors has been paid back.
Madoff was the mastermind behind the biggest Ponzi scheme in history. He died while serving his 150 year sentence in North Carolina.
Madoff, a former chairman of the NASDAQ stock market, wiped out the life savings of thousands of people, the investments of universities, charities and celebrities.
“Forty years of savings and all my pension. Nothing left – I’m on food stamps,” said Madoff investor Miriam Siegman.
“That betrayal is very difficult for me because this was a man, who, we were friends for 35 years and investors for 25 years,” said former Mets owner Fred Wilpon.
Before making his name on Wall Street, Madoff grew up in a Queens neighborhood, where he married his high school sweetheart Ruth.
He started his investment business with several thousand dollars in savings, and set up shop in the financial capital in the 1960s. For decades, his fund made no trades, allowing investors to redeem their accounts by drawing from the account of new investors. In 2008, the financial crisis triggered investors to make withdrawals. He couldn’t keep up and told his family.
“He said I have a confession to make. I’ve been running a Ponzi scheme,” his ex-wife Ruth Madoff told 60 Minutes.
His sons turned him in.
In 2009, he pleaded guilty to securities fraud and other charges. He said he was “deeply sorry and ashamed.”
Madoff was so hated, he had to wear a bulletproof vest to court.
A trustee was appointed to recover funds, sometimes by suing hedge funds and other large investors who came out ahead.
So far, more than $13 billion of an estimated $17.5 billion that investors put into Madoff’s business has been returned. His homes and yacht were auctioned off to help compensate victims.
“Not only did Madoff’s estate go into bankruptcy, but there were cascading bankruptcies because he could not repay people. Many investors themselves went bankrupt,” said attorney Robert Wallner.
Wallner represented the litigation trustee of two large funds that invested with Madoff and went bankrupt.
“There are many people who not only had to give back money that they took out, but had to give back money that they never really had,” Wallner said. “You think about all the victims he left behind, and frankly that’s what I thought about – not his demise.”
Half a dozen Madoff associates were arrested. His son killed himself on the second anniversary of his father’s arrest. His wife cut him off.
“Very sad episode in the history of our city,” Mayor Bill de Blasio Wednesday. “Many, many people were hurt by his actions and it’s time to hopefully turn the page and move forward.”
In 2019, Madoff’s attorneys had also asked former President Donald Trump for a reduction in his sentence. None was given.
Madoff was 82.