A decades-long force on Wall Street, Madoff shocked the world when he pleaded guilty in 2009 to running a vast Ponzi scheme that prosecutors said swindled thousands out of their life savings. The scheme began in the early 1970s, and by the time Madoff was arrested in December 2008, had defrauded as many as 37,000 people in 136 countries out of up to $ 65 billion.
His victims included the famous – film director Steven Spielberg, actor Kevin Bacon and Nobel Peace Prize winner Elie Weisel – as well as ordinary investors.
Attorney Jerry Reisman, who represented 26 victims of Madoff’s Ponzi scheme, said on the special that the fraudulent financier was thought to be a “brilliant stock selector” that attracted the wealthy elite to manage their money until the 2008 stock market crash revealed his scheme.
“Over the years, he was considered to be a brilliant, brilliant stock selector, stock picker — whatever you want to call him and he returned phenomenal returns for investors,” Reisman said.
Madoff gained momentum in accruing “more and more investors to invest with him.” Throughout the early 2000s, Maddoff’s portfolio continued to grow.
“It grew and grew and grew,” the attorney added.
However, it all went downhill when the financial crisis began in 2008. Millions of homeowners needed their money out of the stock market to pay for their mortgages.
“These hedge funds and pension funds that needed their money fast, and they needed that money to take it out of the system as soon as possible,” FOX Business’ Susan Li said.
But Madoff did not have access to the money that the financial institutions were looking for.
“He took new money from new investors and used that money to pay old ones. So, there was nothing that was generated. There was no value that was created. Nothing that he did that added value or added money back for investors and that is basically what a Ponzi scheme is,” Li said.
Madoff was enriched off of this Ponzi scheme – buying luxury homes in New York, including a beach house in Montauk, New York, among owning properties.
The notorious architect of the biggest investment fraud in U.S. history died at age 82 on April 14th.
Madoff was serving a 150-year sentence at the federal medical care center in Butner, North Carolina, where his attorney said he was being treated for terminal kidney failure. Last year, Madoff’s attorney filed court papers seeking the 82-year-old’s release during the coronavirus pandemic, saying he suffered from end-stage renal disease. The request was denied.
His death is believed to be from natural causes, a spokesman for the Manhattan U.S. Attorney’s Office, Nick Biase, told FOX Business.
Fox Business’ Megan Heney contributed to this report.
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