Condemned to 150 years in prison, schemer Bernard Madoff died in prison in the United States, it is believed that he created the world’s largest financial pyramid.
Bernard Madoff is an American financier who has been accused of creating the world’s largest pyramid scheme. Damage from the Madoff scam is estimated at between $ 50 and $ 65 billion, with three thousand people becoming its victims.
In the spring of 2010, Madoff pleaded guilty to fraud and money laundering, and received 150 years in prison in the summer and has since been in federal prison in North Carolina.
On April 14, 2021, Madoff died in prison “of natural causes” at the age of 83.
Correspondent.net recalls the history of the swindler of the century.
Good reputation
Bernard Madoff’s firm began operations in 1960. He had a very good reputation, managing the investment company Fairfield Sentry, with which many organizations and large firms collaborated.
It is believed that he began to engage in fraud in the 1970s, when he began to promise investors up to 46% per annum from playing in the stock market, but in reality he paid old clients with the financial receipts that came from new clients.
“We thought he was God. We trusted everything he did,” said in 2009 Nobel Peace Prize laureate Elie Wiesel, whose foundation lost $ 15.2 million to Madoff’s scams.
In court, Madoff said that when he started his pyramid scheme, he hoped it would last for a limited time.
“I cannot convey in words how sorry I am for what I have done,” Madoff said in court, pleading guilty. “I realized that my arrest and this day would inevitably come.”
In total, in 2008, Madoff Investment Securities had $ 17 billion at its disposal. The influx of new clients was not hampered by fears of some experts, who pointed to zero volatility of the Madoff firm, but inspections by the Securities and Exchange Commission and auditors did not reveal significant violations in the company’s activities. The firm was considered one of the leading market makers of the stock market.
It is believed that Madoff’s scam went unreported for so long because at the end of each quarter, he sold almost all of his shares, worth $ 11 billion. The next day he returned everything back. But experts reject this theory, because otherwise the stock market would fluctuate.
Sons surrendered
On December 10, 2008, Madoff allegedly told his sons, Andrew and Mark, that his business was “one big lie” in a pyramid scheme. The sons passed this information on to the authorities. The next day, the Federal Bureau of Investigation arrested Madoff, and after another 5 days, his accounts were frozen.
It turned out that Madoff Securities had not invested in the funds entrusted to it for at least the past 13 years. Under the influence of the exacerbation of the global financial crisis in November-December 2008, several large investors turned to Madoff with a request to return the invested funds or other property totaling $ 7 billion, but the financier had nothing to pay with – the pyramid burst.
Effects
As a result of the collapse of the financial pyramid, large and medium-sized banks, financial and investment companies, insurance and charitable foundations of the USA, France, Italy, Spain, the Netherlands, Switzerland suffered.
On February 10, 2009, 65-year-old William Foxton, a retired British Army Commander of the Order of the British Empire, shot himself in a park in Southampton, England, losing all his family’s savings. He has invested in the Herald USA Fund and the Herald Luxembourg Fund, donor funds for Madoff’s company.
Madoff’s eldest son, Mark Madoff, was found dead on December 11, 2010, two years after he turned his father over to the police. He was found hanged on a dog leash in his apartment. After the scandal erupted, Mark unsuccessfully sought work on Wall Street and was reportedly depressed over possible felony charges.
Charles Murphy, head of the hedge fund Fairfield Greenwich Group, which has invested more than $ 7 billion in Madoff, including about $ 50 million of his personal fortune, jumped from the 24th floor of the Sofitel New York Hotel on March 27, 2017.
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