13 Things to Know About Bernie Madoff Before Watching The Wizard of Lies
Image Source: HBO
Nearly a decade after stockbroker Bernie Madoff’s arrest for the largest known financial fraud in history, HBO has revived his story for the small screen. The Wizard of Lies stars Robert De Niro as Madoff (pictured above with costar Michelle Pfeiffer), and it examines the fallout from the Ponzi schemer’s downfall and subsequent 150-year conviction. Whether you’ve yet to watch the movie or you just want to brush up on a few of the case’s key facts, check out everything you need to know about the $65 billion scandal below.
Madoff founded his company with money from a Summer job. Madoff, who was born in Queens in 1938, was a penny stock trader when he founded Bernard L. Madoff Investment Securities in 1960 with $5,000 he earned from working as a lifeguard and sprinkler installer.
He hired a ton of family members to work for him. Madoff’s younger brother, Peter, was hired as senior managing director and chief compliance officer, and Peter’s daughter, Shana Madoff, followed as compliance attorney. Madoff also had his sons, Mark and Andrew, and his nephew, Charles Weiner, working in the trading section. Both of his sons invested in their father’s fund with their own money, although Mark stopped in 2001.
The fraud allegedly began as far back as the 1970s. Although his Ponzi scheme wasn’t fully revealed until 2008, some federal investigators suspect the fraud goes all the way back to the ’70s. Madoff seemed to deny it when he admitted that his fraudulent activities didn’t begin until sometime in the ’90s.
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Madoff Securities had over $300 million in assets by 2000. The company quickly became one of the top traders and had offices in both NYC and London. This appearance of success is what helped keep Madoff’s Ponzi scheme going for so long; an anonymous investor told The New York Times, “The returns were just amazing and we trusted this guy for decades – if you wanted to take money out, you always got your check in a few days. That’s why we were all so stunned.”
Bernie Madoff and his wife, Ruth Madoff, had a close relationship with government members. Between the years of 1991 and 2008, the Madoffs contributed around $240,000 to federal candidates and committees, with 88 percent of that going to Democrats. The Democratic Senatorial Campaign Committee later returned $100,000 of the contributions the Madoffs made, a move which was mirrored by Senator Chuck Schumer and Senator Christopher J. Dodd (the latter of whom donated $1,500 to the Elie Wiesel Foundation For Humanity, since Wiesel was one of those defrauded by Madoff).
He didn’t confess until 2008. On Dec. 10, 2008, Madoff supposedly confessed to his employees that the part of the firm that dealt with asset management was actually a part of a massive, complex Ponzi scheme and had lost about $50 billion at that point. He was arrested the next day in his apartment on one count of securities fraud, but was released on $10 million bail.
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He plead guilty to 11 felony charges. After spending a few months on house arrest and reaching a partial agreement with the SEC (which froze his assets), he plead guilty to 11 federal crimes in March 2009, including money laundering, fraud, perjury, and false filings with the SEC. An appeals court ruled that he had to go to (and stay in) jail until sentencing.
Madoff was sentenced to 150 years in prison. On June 29, 2009, Madoff paid for his crimes with a sentencing of 150 years in prison, which is actually the maximum amount of years allowed.
His arrest and conviction had dire consequences for his family members. Ruth Madoff agreed to take $2.5 million in cash and forfeit her claim to their $85 million worth of assets in a settlement with federal prosecutors (she was later accused by Massachusetts regulators of withdrawing $15 million from a company account right before her husband confessed). A $199 million lawsuit was also filed against Madoff’s sons, Mark and Andrew, as well as his brother Peter and niece Shauna, all of whom worked at the firm and were believed to be involved. Peter was later sentenced to 10 years in prison.
His son killed himself. While his wife was out of town and his 2-year-old son was asleep, Mark, 46, hung himself in his NYC apartment. The suicide came exactly two years after his father’s arrest on Dec. 11. Madoff’s other son, Andrew, died in 2014 from lymphoma.
Some of his victims were well-known celebrities. Director Steven Spielberg lost some of the money he put towards philanthropy, and Nobel Peace Prize recipient and Holocaust survivor Elie Wiesel’s nonprofit foundation lost a significant amount of its assets while being managed by Bernard Madoff Investment Securities. Other high-profile victims believed to have been defrauded include baseball player Sandy Koufax, New York Mets owner Fred Wilpon, Kevin Bacon and wife Kyra Sedgwick, John Malkovich, and Zsa Zsa Gabor.
He reportedly had a heart attack in prison. CNBC reported in 2014 that the convicted fraudster, then 75, was hospitalized for a heart attack at Duke University Medical Center (which is near the medium security federal prison he’s locked up in in Butner, NC). He also claimed he had stage-four kidney disease, but wasn’t receiving dialysis.
A large amount of funds are still being recovered. In the end, a whopping 16,519 investors filed claims against Madoff. It was announced on Feb. 1, 2016, that more than $11 billion had been recovered. “We now have $11,079,000,000,” trustee Irving Picard told ABC News, who leads the team of bankruptcy lawyers sorting out the financial disaster Madoff created. “We’re hoping that we can collect another $3 to $4 billion so we could be in the $14 or $15 billion range.”
Source: Pop Sugar