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Madoff died at the Federal Medical Center in Butner, North Carolina Madoff died of natural causes at the Federal Medical Center in Butner, North Carolina
Published on April 14, 2021 11:09 AM

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Former financier Bernie Madoff leaves federal court in Manhattan. | David Karp/AP Photo
NEW YORK - Bernie Madoff, the financier who pleaded guilty to orchestrating a massive Ponzi scheme, died in a federal prison early Wednesday, a person familiar with the matter told The Associated Press. He was 82.

Madoff died at the Federal Medical Center in Butner, North Carolina, apparently from natural causes, the person said. The person was not authorized to speak publicly and spoke to the AP on the condition of anonymity.

Last year, Madoff's lawyers filed court papers to try to get him released from prison in the coronavirus pandemic, saying he had suffered from end-stage renal disease and other chronic medical conditions. The request was denied.

Madoff admitted swindling thousands of clients out of billions of dollars in investments over decades.

A court-appointed trustee has recovered more than $13 billion of an estimated $17.5 billion that investors put into Madoff's business. At the time of Madoff's arrest, fake account statements were telling clients they had holdings worth $60 billion.

For decades, Madoff enjoyed an image as a self-made financial guru whose Midas touch defied market fluctuations. A former chairman of the Nasdaq stock market, he attracted a devoted legion of investment clients — from Florida retirees to celebrities such as famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax.

But his investment advisory business was exposed in 2008 as a multibillion-dollar Ponzi scheme that wiped out people's fortunes and ruined charities and foundations. He became so hated he had to wear a bulletproof vest to court.

Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was "deeply sorry and ashamed."

After several months living under house arrest at his $7 million Manhattan penthouse apartment, he was led off to jail in handcuffs to scattered applause from angry investors in the courtroom.


Bernard Lawrence Madoff was an American financier and convicted fraudster who ran the world's largest Ponzi scheme. He was at one time non-executive chairman of the NASDAQ stock market before being revealed as the operator of the largest financial fraud in history, worth about $64.8 billion. Madoff founded a penny stock brokerage in 1960, which eventually grew into Bernard L. Madoff Investment Securities. He served as its chairman until his arrest on December 11, 2008. The firm was one of the top market maker businesses on Wall Street, which bypassed 'specialist' firms by directly executing orders over the counter from retail brokers.

At the firm, he employed his brother Peter Madoff as senior managing director and chief compliance officer, Peter's daughter Shana Madoff as the firm's rules and compliance officer and attorney, and his now deceased sons Mark and Andrew. Peter was sentenced to 10 years in prison, and Mark died by suicide by hanging exactly two years after his father's arrest. Andrew died of lymphoma on September 3, 2014.

On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme, and quoted him as saying that 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 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 and admitted to turning his wealth management business into a massive Ponzi scheme. The Madoff investment scandal defrauded thousands of investors of billions of dollars. Madoff said that he began the Ponzi scheme in the early 1990s, but federal investigators believe that the fraud began as early as the mid-1980s and may have begun as far back as the 1970s. Those charged with recovering the missing money believe that 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 trustee estimated actual losses to investors of $18 billion. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum sentence allowed–virtually assuring that he would die in prison. He died at the Federal Medical Center, Butner, in North Carolina, on April 14, 2021.

Investment scandal Main article: Madoff investment scandal In 1999, financial analyst Harry Markopolos had informed the SEC that he believed it was legally and mathematically impossible to achieve the gains Madoff claimed to deliver. According to Markopolos, it took him four minutes to conclude that Madoff's numbers did not add up, and another minute to suspect they were fraudulent.

After four hours of failed attempts to replicate Madoff's numbers, Markopolos believed he had mathematically proven Madoff was a fraud. He was ignored by the SEC's Boston office in 2000 and 2001, as well as by Meaghan Cheung at the SEC's New York office in 2005 and 2007 when he presented further evidence. He has since co-authored a book with Gaytri Kachroo titled No One Would Listen. The book details the frustrating efforts he and his legal team made over a ten-year period to alert the government, the industry, and the press about Madoff's fraud.

Although Madoff's wealth management business ultimately grew into a multibillion-dollar operation, none of the major derivatives firms traded with him because they did not believe his numbers were real. None of the major Wall Street firms invested with him, and several high-ranking executives at those firms suspected his operations and claims were not legitimate. Others contended it was inconceivable that the growing volume of Madoff's accounts could be competently and legitimately serviced by his documented accounting/auditing firm, a three-person firm with only one active accountant.

The Central Bank of Ireland failed to spot Madoff's gigantic fraud when he started using Irish funds and had to supply large amounts of information, which would have been enough to enable Irish regulators to uncover the fraud much earlier than late 2008 when he was finally arrested in New York.

The Federal Bureau of Investigation report and federal prosecutors' complaint says that during the first week of December 2008, Madoff confided to a senior employee, identified by Bloomberg News as one of his sons, that he said he was struggling to meet $7 billion in redemptions. For years, Madoff had simply deposited investors' money in his business account at JPMorgan Chase and withdrew money from that account when they requested redemptions. He had scraped together just enough money to make a redemption payment on November 19. However, despite cash infusions from several longtime investors, by the week after Thanksgiving it was apparent that there was not enough money to even begin to meet the remaining requests. His Chase account had over $5.5 billion in mid-2008, but by late November was down to $234 million, a fraction of the outstanding redemptions. On December 3, he told longtime assistant Frank DiPascali, who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother Peter about the fraud.

According to the sons, Madoff told Mark Madoff on the following day, December 9, that he planned to pay out $173 million in bonuses two months early. Madoff said that 'he had recently made profits through business operations, and that now was a good time to distribute it.' Mark told Andrew Madoff, and the next morning they went to their father's office and asked him how he could pay bonuses to his staff if he was having trouble paying clients. They then traveled to Madoff's apartment, where with Ruth Madoff nearby, Madoff told them he was 'finished,' that he had 'absolutely nothing' left, and that his investment fund was 'just one big lie' and 'basically, a giant Ponzi scheme.'

According to their attorney, Madoff's sons then reported their father to federal authorities. Madoff had intended to wind up his operations over the remainder of the week before having his sons turn him in; he directed DiPascali to use the remaining money in his business account to cash out the accounts of several family members and favored friends. However, as soon as they left their father's apartment, Mark and Andrew immediately contacted a lawyer, who in turn got them in touch with federal prosecutors and the SEC. On December 11, 2008, Madoff was arrested and charged with securities fraud.

Madoff posted $10 million bail in December 2008 and remained under 24-hour monitoring and house arrest in his Upper East Side penthouse apartment until March 12, 2009, when Judge Denny Chin revoked his bail and remanded him to the Metropolitan Correctional Center. Chin ruled that Madoff was a flight risk because of his age, his wealth, and the prospect of spending the rest of his life in prison. Prosecutors filed two asset forfeiture pleadings which include lists of valuable real and personal property as well as financial interests and entities owned or controlled by Madoff.

Madoff's lawyer, Ira Sorkin, filed an appeal, which prosecutors opposed. On March 20, 2009, an appellate court denied Madoff's request to be released from jail and returned to home confinement until his sentencing on June 29, 2009. On June 22, 2009, Sorkin hand-delivered a customary pre-sentencing letter to the judge requesting a sentence of 12 years, because of tables from the Social Security Administration that his life span was predicted to be 13 years.

On June 26, 2009, Chin ordered forfeiture of $170 million in Madoff's assets. Prosecutors asked Chin to sentence Madoff to 150 years in prison. Bankruptcy Trustee Irving Picard indicated that 'Mr. Madoff has not provided meaningful cooperation or assistance.'

In settlement with federal prosecutors, Madoff's wife Ruth agreed to forfeit her claim to $85 million in assets, leaving her with $2.5 million in cash. The order allowed the SEC and Court appointed trustee Irving Picard to pursue Ruth Madoff's funds. Massachusetts regulators also accused her of withdrawing $15 million from company-related accounts shortly before he confessed.

In February 2009, Madoff reached an agreement with the SEC. It was later revealed that as part of the agreement, Madoff accepted a lifetime ban from the securities industry.

Picard sued Madoff's sons, Mark and Andrew, his brother Peter, and Peter's daughter, Shana, for negligence and breach of fiduciary duty, for $198 million. The defendants had received over $80 million in compensation since 2001.