Today in History: Bernie Madoff, the Infamous Ponzi schemer, was Arrested
On December 11, 2008, financier Bernard Madoff was arrested at his New York City apartment and charged with masterminding a long-running Ponzi scheme later estimated to involve around $65 billion, making it one of the biggest investment frauds in Wall Street history.
Based on the success of his legitimate operations, Madoff launched an investment-advisory business as part of his firm, and it was this business that by the 1990s had become a Ponzi scheme, in which he paid his earlier investors with funds received from more recent investors. For years, clients of this business were sent account statements showing consistently high—and fraudulent—revenues. Potential new customers begged for Madoff to invest their money. However, in 2008, with the U.S. economy in crisis, Madoff’s financial swindle began to fall apart as his clients took money out faster than he could bring in fresh cash.
On March 12, 2009, Madoff pleaded guilty to the 11 felony counts against him, including securities fraud, money laundering, and perjury. On June 29 of that year, a federal district court judge in Manhattan sentenced Madoff to 150 years behind bars, calling his actions “extraordinary evil.”
On December 11, 2010, the second anniversary of Madoff’s arrest, his 46-year-old son Mark was found dead in his Manhattan apartment after committing suicide.