A pioneer of the financial world scammed Hollywood stars out of tens of billions of dollars with a 17-year-long ponzi scheme.
Bernie Madoff made history by launching the first ever electronic stock exchange, Nasdaq, in 1971. But the New York native's successes were overshadowed when he turned to fraud and was instead famed for orchestrating the world’s largest ponzi scheme.
In case you're unsure, a ponzi scheme is 'an unsustainable business model that will grind to a halt once the operator fails to attract new investors or when current investors attempt to get their money back'.
For almost two decades, Madoff - nicknamed the 'Monster of Wall Street' - tricked people into believing they were making steady returns by fabricating elaborate account statements, leading them to believe their money had been legitimately invested.
Advert
But in reality, there was never any investment, and initial investors were simply paid 'returns' with money from new investors.
Madoff claimed his scheme started in the 1990s, but his account manager, Frank DiPascali, who had been working with Madoff since 1975, said the fraud had been occurring 'for as long as I remember'.
Madoff managed to attract thousands of investors, including some huge Hollywood names such as Steven Spielberg, Larry King, Kevin Bacon and Kyra Sedgwick.
He ripped off around $64 billion in total, draining some people of their life savings.
Meanwhile, holocaust survivor Elie Wiesel invested $15 million into Madoff through his nonprofit, The Elie Wiesel Foundation for Humanity.
The ponzi scheme and its fallout unleashed devastating consequences.
Several people took their own lives, including former British soldier William Foxton OBE, who shot himself in a park in 2009 after losing his entire family's savings.
Hedge fund executive Charles Murphy jumped from a 24 storey window after the company he worked for invested $7 billion in Madoff’s scheme, while René-Thierry Magon de la Villehuchet took his own life after losing $1.5 billion of his clients' money.
The fraud was eventually uncovered in 2008 and at trial in 2009, Madoff pled guilty to felonies including money laundering and securities fraud.
He was given 150 years in prison - the maximum possible under federal sentencing guidelines - and was ordered to pay out billions in restitution.
Madoff issued an apology after appearing in court, telling his victims: "I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren.
"This is something I will live in for the rest of my life. I'm sorry.... I know that doesn't help you."
Sentencing Judge Denny Chin commented: "Here the message must be sent that Mr. Madoff's crimes were extraordinarily evil."
As of 2022, only around $4 billion had been returned to some 40,000 victims
Madoff died in a prison hospital at age 82 on April 14, 2021.
Ellie Kemp