Tuesday, October 26News That Matters

Bernie Madoff, Architect of Largest Ponzi Scheme in History, Dead at 82

The victims of his fraud, some of whom went overnight from comfortable wealth to frantic desperation, numbered in the thousands and were scattered from Palm Beach, Fla., to the Persian Gulf. The paper losses totaled $64.8 billion, including the fictional profits he had credited to customer accounts over at least two decades.

More than money was lost. At least two people, in despair over their losses, died by suicide. A major Madoff investor suffered a fatal heart attack after months of contentious litigation over his role in the scheme. Some investors lost their homes. Others lost the trust and friendship of relatives and friends they had inadvertently steered into harm’s way.

Mr. Madoff was not spared in these tragic aftershocks. His older son, Mark, died by suicide in his Manhattan apartment early on the morning of Dec. 11, 2010, the second anniversary of his father’s arrest. He was characterized by his lawyer, Martin Flumenbaum, as “an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo.” One of Mark Madoff’s last messages before his death was to Mr. Flumenbaum: “Nobody wants to believe the truth. Please take care of my family.”

In June 2012, Bernard Madoff’s brother, Peter, a lawyer by training, pleaded guilty to federal tax and securities fraud charges related to his role as the chief compliance officer at his older brother’s firm, but he was not accused of knowingly participating in the Ponzi scheme.

In December 2012, Peter Madoff forfeited all his personal property to the government to compensate his brother’s victims; he was sentenced to a 10-year prison term. And on Sept. 3, 2014, Mr. Madoff’s younger son, Andrew, died of cancer at the age of 48. He had blamed the stress of the scandal for the return of the cancer he had fought off in 2003.

Besides the human toll, professional reputations were destroyed. More than a dozen prominent hedge funds and money managers, including J. Ezra Merkin and the Fairfield Greenwich Group, had to admit that they had forwarded their clients’ money to Mr. Madoff without detecting that he was running a fraud. Swiss private bankers, global commercial banks and major accounting firms were dragged into court by clients who had relied on them to monitor their Madoff investments.