Bernie Madoff Dies At 82 While Serving 150-Year Sentence For Decades Of Fraud

Back in 2008, the world seemed to suddenly plunge into panic as a domino effect of financial ruin rippled out from the United States and the risky and sometimes illegal moves of what were once considered financial leaders were laid bare.

While the factors, causes, and effects of this crisis are complicated, we've been able to get at least some sense of what happened due to stories like The Big Short.

And while stories like that revealed a great deal of corruption at the heart of the crisis, the fact that it was endemic to entire institutions made it hard to attach blame to any one person.

But due to the scope and duration of his own financial crimes and the timing of his downfall, 82-year-old Bernie Madoff is nonetheless a popular choice for the villain of the economic crisis.

And on April 14, the Federal Bureau of Prisons confirmed that he has died.

The roots of Madoff's infleunce and infamy first started to form in 1960 when he founded the Bernard L. Madoff Investment Securities firm.

Although this firm began as a penny stock trader, the BBC reported that it eventually rose to a high enough level of prominence that Madoff was able to serve as the chairman of the NASDAQ stock exchange.

In that time, what appeared to be exceptional returns from his firm's investments prompted eight different investigations by U.S. Securities and Exchange Commission.

Yet according to NBC News, the fact that investors' individual returns seemed smaller and more realistic than the 50% yields promised by traditional Ponzi schemes made his firm seem like a safe investment for thousands of people.

But when the financial crisis started to take hold in 2008, it became all too apparent that he wasn't the savvy investor he appeared to be.

As NBC News reported, his clients came to him seeking $7 billion in returns only to discover that this money simply didn't exist.

Although the thousands of investors that entrusted their money to him were supposed to receive a cumulative $65 billion on the $20 billion invested in the decades that Madoff was operating, it turned out that he was just using new investors' money to pay off older ones while keeping a piece for himself.

You may recall that Kevin Bacon and Steven Spielburg's Wunderkinder foundation were among Madoff's most famous victims.

Wikimedia Commons | Romain Dubois, Gage Skidmore

However, the unfortunate reality is that for every rich and prominent client, there were thousands of much simpler means that trusted their life savings and pensions with him.

As former assistant U.S. attorney Matthew L. Schwartz told NBC News, "There were so many heartbreaking stories of people who thought they had material savings, who had thought they put everything into their nest egg and that they would be able to retire, and instead they ended up effectively homeless."

When it became apparent that Madoff wouldn't be able to pay his investors, he confessed to his fraudulent dealings to his sons, who then reported him to federal authorities.

According to ABC News, he pleaded guilty to 11 federal felonies and received a maximum sentence of 150 years in prison.

By February 2020, Madoff's lawyers requested a "compassionate release," citing chronic health conditions that included terminal kidney failure.

As Madoff said at the time, "I've served 11 years already and, quite frankly, I've suffered through it."

His request was denied and he would remain in prison until his death at Federal Medical Center in Butner, North Carolina. As NBC News reported, his cause of death has yet to be determined by a medical examiner.

As for Madoff's victims, officials from the Department of Justice have been working over the last decade to compensate them through the Madoff Victims Fund.

As ABC News reported, the fund has received 65,000 requests throughout 136 countries for this compensation and the DOJ is pledging an eventual return of $4 billion to those confirmed to be victims of the scheme.

These funds at least partially come from civil and criminal forfeitures aimed at Madoff and his co-conspirators and so far, $2.7 billion has been returned to almost 38,000 investors.

h/t: NBC News, ABC News

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