For those in the know with money to invest, Bernie Madoff was a superhero of Wall Street. Year after year, his firm delivered profits that seemed too good to be true. None of his wealthy clients knew exactly how he did it. But they sure did love the results.
Madoff was a kid from Queens who grew up to found an investment company. He had a posh Manhattan apartment, a yacht, a mansion at Palm Beach. He served as chairman of the NASDAQ stock exchange.
Some of his firm’s clients were famous actors, athletes, and businessmen. Many were people who had saved all their lives to build wealth. Charities gave him their money to invest.
He was choosy about accepting clients. But if you were lucky enough to be picked, you knew he would take care of you. “Everyone was always talking about how Madoff was making them all this money,” one investor said. “Everyone wanted to sign up.” Another investor told his family from his deathbed: “Trust Bernie Madoff.”
In 2008, as financial crisis swept the world, some investors tried to withdraw their funds. That’s when a distraught Madoff told his sons that his business was “all just one big lie,” and that he had “absolutely nothing” left. For years he had been running a giant Ponzi scheme, taking money from new investors to pay “profits” back to clients.
On December 11, 2008, FBI agents arrested seventy-year-old Madoff for securities fraud. His scheme had involved a stunning $65 billion. Clients who thought they were worth millions suddenly discovered they had nothing. Thousands lost their life’s savings.
Bernie Madoff was sentenced to 150 years in prison. Investigators will probably never figure out where all the money went. It ranks as perhaps the greatest investment scandal of all time.