What a Tangled Web We Weave When First We Practise to Deceive

"Bernie, up until his death, lived with guilt and remorse for his crimes."

"Although the crimes Bernie was convicted of have come to define who he was, he was also a father and a husband."

"He was soft-spoken and an intellectual."

"Bernie was by no means perfect. But no man is."

Madoff lawyer, Brandon Sample

Madoff arrives at Manhattan federal court in New York on March 12, 2009. He was convicted in June of that year. (Louis Lanzano/The Associated Press)

 

Alas, the man whom so many people admired and trusted and entrusted with their worldly wealth were betrayed by a man whose imperfection was colossal in nature, affecting as it did so many other people and groups and corporations of influence and importance to many. His indiscretion and imperfection was world-class, enormously destructive of not only wealth but trust and stability in the world of high finance, leaving many people broken, their financial assets evaporated, their life savings, their work ethic unrewarded, their plans for the future in full abeyance.

A family that was once trusted and admired for their philanthropic reputation and above all the reputation of its head to guarantee an unheard-of return on investment on behalf of business acquaintances, strangers, family members, personal friends, human rights groups, sport franchises and those within the art world, all surrendering their financial futures to a Wall Street financial genius, received the shock of their lives when they finally discovered they had been manipulated and lied to, and bankrupted, courtesy of Bernie Madoff.

Tellingly, at his trial and sentencing, from among his myriad friends and admirers not one penned a letter of support on his behalf. No one evinced the slightest interest in supporting the man they had venerated as a financial wizard and credited with helping them maximize profits on their financial gains. No letters to attest to his good character or deeds of charity, hoping to help the convicted felon achieve some leniency in sentencing. The Manhattan courtroom saw none of his friends, supporters, acquaintances present for he no longer had any.

 

Bernie Madoff, the ex-financier who was serving a 150-year term for engineering a fraud estimated as high as $64.8 billion US, died in federal prison on Wednesday. (Timothy A. Clary/AFP/Getty Images)

 

"There were several times when I met with the Securities and Exchange authorities and thought, 'They got me'."

"I believed when I started this problem, this crime, that it would be something I would be able to work my way out of, but that became impossible."

"As hard as I tried, the deeper I dug myself into a hole."

"I am sorry. I know that doesn't help you [victims]."

Bernie Madoff

No courtroom would have been large enough to hold even a fragment of his thousands of victims; individuals, charities, pension funds, hedge funds. From Kevin Bacon and John Malkovich, Sandy Koufax, Steven Spielberg, and countless others from the Jewish community who trusted 'one of their own' who was also known as a major philanthropist, he was a fallen idol. "We thought he was God. We trusted everything in his hands", said Elie Wiesel, Holocaust survivor, author, activist and Nobel Peace Prize laureate, whose foundation lost $15.2 million.

His two sons, unimplicated in his scheming, revealed to authorities the crimes their father was guilty of in 2008, during the great depression that hit the international community. Bernard L. Madoff Investment Securities was started with $500 in savings in 1960. He began with selling penny stocks and a decade later became one of the five original broker-dealers in the Nasdaq, advocating for market competition when the New York Stock Exchange dominated trading. Madoff became an early champion of electronic trading.

He turned to fraud in the early 1990s. He had no lack of investors intrigued with the steady double-digit annual gains the genius that Madoff was held to be generated, and which no one else was ever able to explain, much yet duplicate. The money he gained established the Madoff family with a Manhattan penthouse, a French villa, high-end vehicles and  yachts. He and his wife Ruth had a combined net worth of $825 million. 

At his trial, prosecutors charged that Madoff and his staff provided their clients with fake confirmations of trades never executed and fake account statements documenting gains never made. Financial analyst Harry Markopolis began pressing the SEC to stop Madoff amidst a swirl of surfacing suspicions when Madoff's name surfaced in a probe by the SEC of a now-defunct accounting firm in Florida. There were rumours on Wall Street that the Madoff market-making operations were used to 'smooth' returns for investment. "It's a proprietary strategy. I can't go into it in great detail", he responded.

Many Madoff investors demanded to cash out in the fall of 2008 when the global financial crisis struck. There was an immediate $7 billion of redemption requests Madoff was unable to fulfill; his chickens coming home to roost. The Madoff investment advisory business was "one big lie", Bernie Madoff confessed to his sons Mark and Andrew. And they went off to authorities and their father was arrested on December 11, 2008.

In 2014, JPMorgan Chase & Co agreed to pay $2.6 billion US to the U.S. government and Madoff victims to settle allegations that the bank failed to tell authorities about its suspicions of fraud at Madoff’s fund. (Stan Honda/AFP/Getty Images)

 

He pleaded guilty to 11 criminal counts including fraud, money laundering and perjury, maintaining the fraud was committed by himself alone. Prosecutors went on to win 15 convictions or guilty pleas, including a guilty plea from younger brother Peter, the Madoff company's chief compliance officer, sentenced to ten years. Five former Madoff employees were also convicted and given prison terms. Invaluable incriminating evidence was gained through the cooperation of the company's longtime financial chief.

Prosecutors allowed Ruth Madoff to retain $2.5 million and within days of Bernie Madoff's arrest recouping money for people who invested with him or with third parties that sent their money to his firm commenced. Over $14.4 billion has been recouped through targeting "net winners" who took more money from Madoff's firm than they put in, while another $4 billion from a fund set up by the U.S. government is being distributed.

The Madoff family was destroyed. In torment over his father's behaviour and by lawsuits, older son Mark Madoff, at age 46, hanged himself in 2010 on the second anniversary of his father's arrest, while younger son Andrew died three years later of cancer at age 48. Bernie Madoff asked for early release in June 2020, from his 150-year sentence. He was gravely ill, and wanted to die at home. U.S.District Judge Denny Chin who had sentenced Madoff, rejected his request for compassionate release.

It was his opinion and that of prosecutors, that Bernie Madoff "never fully accepted responsibility" for the crimes he was convicted of. He appeared to believe that many of his victims might have lost even more money in the markets had they not been his clients -- on the basis of his belief that he had changed how Wall Street operated -- for the better. He had, he said, come to terms with his crimes and his status as a pariah: "It is what it is".

And so, Bernard Madoff, age 82, died at the Federal Medical Center in Butner, North Carolina on Wednesday, from what is believed to have been natural causes. Suffering from terminal kidney disease and several chronic conditions. Somewhat short of his 150-year prison sentence. A lot of shame, anguish and a lot of remorse could have been shoehorned into those twelve years of incarceration.