In , federal prosecutors charged Madoff with running the largest Ponzi scheme in history, having used money from some investors to pay purported profits to other people. Madoff's sons, Mark and Andrew, had informed authorities that he had confessed to them that his business was a complete fraud. Madoff pleaded guilty in in Manhattan federal court to 11 felonies and was sentenced to years in prison. Mark Madoff killed himself at age 46 in , two years to the day of this father's arrest.
Andrew Madoff died four years after that of lymphoma at age If you would prefer to address the Court in writing, you may so do by sending an e-mail or letter addressed to the Honorable Laura Taylor Swain either by e-mail at usanys.
We will collect the letters and forward them to the Court. Please do not send any material directly to the Court. You are here U. Click the links below for more information on related cases: United States v. Enrica Cotellessa-Pitz, S5 10 Cr.
Frank DiPascali, Jr. United States v. David G. Friehling, 09 Cr. Swain United States v. Eric S. Lipkin, S3 10 Cr. Information for Investors Investors are requested to gather any documents that they have concerning their investments with Mr.
Daniel Bonventre, et al. He was also a pioneer in electronic trading and chair of the Nasdaq in the early s. He died in prison on April 14, while serving a year sentence for money laundering, securities fraud and several other felonies.
Despite claiming to generate large, steady returns through an investing strategy called split-strike conversion, which is an actual trading strategy , Madoff simply deposited client funds into a single bank account that he used to pay existing clients who wanted to cash out. He funded redemptions by attracting new investors and their capital, but was unable to maintain the fraud when the market turned sharply lower in late He confessed to his sons—who worked at his firm but, he claims, were not aware of the scheme—on Dec.
They turned him in to the authorities the next day. In , at age 71, Madoff pleaded guilty to 11 federal felony counts, including securities fraud , wire fraud, mail fraud, perjury, and money laundering. The Ponzi scheme became a potent symbol of the culture of greed and dishonesty that, to critics, pervaded Wall Street in the run-up to the financial crisis. Madoff has been the subject of numerous articles, books, movies, and an ABC biopic miniseries. Speaking by phone from prison, Madoff told journalist Steve Fishman that his father, who had run a sporting goods store, went out of business due to steel shortages during the Korean War: "You watch that happen and you see your father, who you idolize, build a big business and then lose everything.
He started his company, Bernard L. He soon persuaded family friends and others to invest with him. Madoff had a chip on his shoulder and felt constantly reminded that he was not part of the Wall Street in-crowd.
Success finally came when he and his brother Peter began to build electronic trading capabilities—"artificial intelligence" in Madoff's words—that attracted massive order flow and boosted the business by providing insights into market activity. He would become chair of the Nasdaq in , and also served in and It is not certain exactly when Madoff's Ponzi scheme began.
He testified in court that it started in , but his account manager, Frank DiPascali, who had been working at the firm since , said the fraud had been occurring "for as long as I remember.
Even less clear is why Madoff carried out the scheme at all. I didn't need to do this for that," he told Fishman, adding, "I don't know why.
Madoff repeatedly suggested to Fishman that he was not entirely to blame for the fraud. I thought it would be a very short period of time, but I just couldn't. Madoff's relationships with these men go back to the s and s, and his scheme netted them hundreds of millions of dollars each. He has indicated that the Big Four and others—a number of feeder funds pumped client funds to him, some all but outsourcing their management of clients' assets—must have suspected the returns he produced or at least should have.
Madoff's apparently ultra-high returns persuaded clients to look the other way. When clients wished to redeem their investments, Madoff funded the payouts with new capital, which he attracted through a reputation for unbelievable returns and grooming his victims by earning their trust.
Madoff also cultivated an image of exclusivity, often initially turning clients away. At the time, Madoff's lawyers asked the judge to shorten the sentence to 7, and then 12, years due to thenyear-old Madoff's limited life expectancy, but the judge ruled against it.
The judge said Madoff's crimes were "extraordinarily evil. Last year, Madoff requested a compassionate release from prison , telling a judge he had less than two years left to live due to kidney disease. The request was denied. Madoff was not the only one to face legal action. In , five of Madoff's employees were found guilty for their part in the Ponzi scheme.
In , Madoff's accountant and lawyer David G. Friehling faced a maximum sentence of years in prison, but was later fined and sentenced to one year of house arrest and an additional year of a supervised release instead. But as far as scale goes, Madoff wins by a landslide. For you. World globe An icon of the world globe, indicating different international options. Get the Insider App.
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