Bernard Lawrence Madoff (born April 29, 1938) is an American former market maker, investment advisor, financier, fraudster, and convicted felon, who is currently serving a federal prison sentence for offenses 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.
On December 10, 2008, Madoff’s sons told authorities their father had confessed to them the asset management unit of his firm was a massive Ponzi scheme and quoted him as saying 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. Madoff said he began the Ponzi scheme in the early 1990s, but federal investigators believe the fraud began as early as the mid-1980s and may have begun as far back as the 1970s. Those designated with recovering the missing money believe 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 June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.<2>
This is all fine and dandy but how did he pull it off? Continuing in Wikipedia . . .
According to the SEC indictment against Annette Bongiorno and Joann Crupi, two back-office workers who worked for Madoff, they created false trading reports based on the returns Madoff ordered for each customer.
For example, when Madoff determined a customer’s return, one of the back-office workers would enter a false trade report with a previous date and then enter a false closing trade in the amount required to produce the required profit. Prosecutors allege Bongiorno used a computer program specially designed to backdate trades and manipulate account statements [emphasis added to point out the awesomeness of The Bull and how it can be used to do bad things]. They quote her as writing to a manager in the early 1990s, “I need the ability to give any settlement date I want.”<2 repeated>
Oh my god, stop it. Fine. He used The Bull. What does this have to do with murder? I’m almost there but this is the perfect place to add this about Bernie’s parents:
Accused Ponzi-schemer Bernie Madoff was not the first person in his close-knit family to run afoul of federal authorities. A broker-dealer firm registered in the name of Madoff’s mother, Sylvia, was effectively forced to close by the U.S. Securities & Exchange Commission.
In August 1963, the SEC announced it was “instituting proceedings . . . to determine whether” 48 broker-dealers, including “Sylvia R. Madoff [doing business as] Gibraltar Securities,” had “failed to file reports of their financial condition . . . and if so, whether their registrations should be revoked.”
An SEC litigation release a month later announced hearings in the Case of Madoff and many of the other firms in question.
Then, in January 1964, the SEC dismissed administrative proceedings against a number of the firms, including Madoff’s, in what appeared to be a deal: No penalties if you promise to stay out of business.
“The firms conceded the violation,” the SEC’s litigation release noted, “but requested withdrawal of their registrations; and in this connection they represented that they are no longer engaged in the securities business and do not owe any cash or securities to customers. The Commission concluded that the public interest would be served by permitting withdrawal, and discontinued its proceedings.”
This wouldn’t be the first Madoff mystery, it turned out. It’s possible Sylvia Madoff was running a securities business even as her son launched his own in 1960. Another possible explanation is suggested by property records for the Madoff’s house. The “grantor/mortgagor” was listed as Sylvia R. Madoff, according to Queens property records.
But the property had tax liens totaling $13,245.28 (about $110,000 in 2020 dollars) for unpaid federal taxes owed by Ralph Z. Madoff (Bernie’s father) and three other people. The taxes were assessed in 1956, but the lien was not paid off until 1965, when the house was sold, suggesting the Madoffs were either fighting the tax bill or unable to pay it.
Is it possible Ralph, burdened with federal tax trouble, contrived to register his own stock business in his wife’s name?<3>
You know what they say, “Where there’s smoke, there’s fire.” It appears Bernie’s parents knew how to play a few money games. They must have taught Bernie well, given him the freedom to go out into the world to carry on the family’s name, and Bernie jumped all over that using The Bull to spread his parents’ thefts from several people to several thousand at a time.
But you asked, so now I answer – here is what all of this has to do with murder . . . through suicide:
Mark Madoff (Bernie’s son) committed suicide by hanging himself in his Manhattan apartment, two years to the day after his father was arrested, while his 2-year-old son slept alone in another room (wow, you were such a good dad, Bernie).
Rene-Thierry Magon de la Villehuchet, 65, an investor who had invested $1.4 billion of his and other persons’ money, had it stolen by Madoff, and committed suicide on December 22, 2008, by taking sleeping pills as he slit his left arm bicep and wrist.
William Foxton, 65, who had been awarded the OBE (Officer of the Most Excellent Order of the British Empire) by the Queen of the United Kingdom, was found with gunshot wounds to his head in a small park next to the Magistrates Court in Southampton, Hampshire, on February 10, 2009, because he could not go on living after Madoff stole over £100,000 from him.
These are just the first three I found. I can only imagine there are more. I am now going to ask a question as we rejoin our book in progress.
CITED REFERENCES
2. Wikipedia contributors, “Bernard Madoff,” Wikipedia, The Free Encyclopedia, https://en.wikipedia.org/wiki/Bernie_Madoff (accessed April 4, 2019).
3. “Madoff’s mother tangled with the feds”
Nicholas Varchaver, James Bandler, and Doris Burke. fortune.com, special report: January 16, 2009.
Link: http://archive.fortune.com/2009/01/16/m ... /index.htm (accessed April 4, 2019).
4. “Atrocious Things That Happened Because of Bernie”
Mike Rothschild. Ranker, vote on everything: undated.
Link: https://www.ranker.com/list/bernie-mado ... rothschild (accessed January 12, 2019).
