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Bernard Madoff: The man jailed 150 years for the World's biggest Ponzi scheme

By Mutala Yakubu
Madoff
Bernard Madoff: The man jailed 150 years for the Worlds biggest Ponzi scheme

Ponzi scheme has become rampant in society and is been used to defraud millions of people of their hard earn money.

Several people who operated a Ponzi scheme have gone to jail and one of such is Bernard Maddof who is undoubtedly conducted the world's biggest Ponzi scheme.

Who is Bernard Madoff



Bernard Lawrence Madoff now 80 years is an American former market maker, investment advisor, financier, fraudster, and convicted felon, who is currently serving a federal prison sentence for offences related to a massive Ponzi scheme.

He is the former non-executive chairman of the NASDAQ stock market, the confessed operator of the largest Ponzi scheme in world history, and the largest financial fraud in U.S. history.

Prosecutors estimated the fraud to be worth $64.8 billion based on the amounts in the accounts of Madoff's 4,800 clients as of November 30, 2008.

Madoff founded a penny stock brokerage in 1960 which eventually grew into Bernard L. Madoff Investment Securities. He served as its chairman until his arrest on December 11, 2008.

The firm was one of the top market maker businesses on Wall Street, which bypassed "specialist" firms by directly executing orders over the counter from retail brokers.

At the firm, he employed his brother Peter Madoff as senior managing director and chief compliance officer, Peter's daughter Shana Madoff as the firm's rules and compliance officer and attorney, and his now deceased sons Andrew and Mark. Peter has since been sentenced to 10 years in prison and Mark committed suicide by hanging exactly two years after his father's arrest.
Andrew died of lymphoma on September 3, 2014.

How he was jailed

On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as saying that it was "one big lie".

The following day, FBI agents arrested Madoff and charged him with one count of securities fraud. The U.S. Securities and Exchange Commission (SEC) had previously conducted multiple investigations into his business practices but had not uncovered the massive fraud.

On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme.

The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but federal investigators believe that the fraud began as early as the mid-1980s and may have begun as far back as the 1970s.

Those charged with recovering the missing money believe that the investment operation may never have been legitimate.

The amount missing from client accounts was almost $65 billion, including fabricated gains.

The Securities Investor Protection Corporation (SIPC) trustee estimated actual losses to investors of $18 billion.

On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, including securities fraud, wire fraud, mail fraud, money laundering, making false statements, perjury, theft from an employee benefit plan, and making false filings with the SEC.

The plea was the response to a criminal complaint filed two days earlier, which stated that over the past 20 years, Madoff had defrauded his clients of almost $65 billion in the largest Ponzi scheme in history. Madoff insisted he was solely responsible for the fraud.

Madoff did not plea bargain with the government. Rather, he pleaded guilty to all charges. It has been speculated that Madoff pleaded guilty instead of cooperating with the authorities in order to avoid naming any associates and co-conspirators who were involved with him in the scheme.

In his plea allocution, Madoff stated he began his Ponzi scheme in 1991. He admitted he had never made any legitimate investments with his clients' money during this time. Instead, he said, he simply deposited the money into his personal business account at Chase Manhattan Bank. When his customers asked for withdrawals, he paid them out of the Chase account — a classic "robbing Peter to pay Paul" scenario.

On June 29, 2009, Judge Chin sentenced Madoff to the maximum sentence of 150 years in federal prison.

 Madoff apologized to his victims, saying,

"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".


Read also: VIDEO: The 2nd biggest fraudulent investment scheme in the world by a Ghanaian; John Ackah Blay-Miezah

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