Booking mug shot of Bernard Madoff
Today marks the fifth anniversary of the arrest of Bernie Madoff and the day when his decades-long, $60 billion Ponzi scheme finally collapsed. The Madoff trial has long since concluded, and he is currently serving out a 150-year prison sentence. But the effects of his deeds continue to be felt across the U.S., while the authorities continue to pursue justice for Madoff’s victims. In other words, the story has continued to develop in the years since the public’s attention has shifted away from the Madoff saga. Here are five things you may not know about the biggest financial scam in history:
1. Madoff didn’t work alone: When Madoff pleaded guilty to orchestrating his infamous scheme, he insisted he acted alone. But in the years since Madoff’s conviction, the feds have fingered several accomplices they say were complicit in the deeds. Madoff’s younger brother, Peter, was sentenced last December to 10 years in prison for his role, while another lieutenant, Frank DiPascali, and six others have pleaded guilty to crimes associated with the scheme. A criminal trial for five members of Madoff’s backroom staff is ongoing in federal court.
2. Only a fraction of the money lost by Madoff’s victims has been recovered: Though the scheme has been estimated to have defrauded roughly $60 billion from investors, court-appointed trustee Irving Picard has thus far collected only $9.5 billion for victims, roughly half of which has been distributed.
3. Madoff is displaying a startling lack of remorse: In a recent interview with the Wall Street Journal, Madoff was eager to “justify the actions that resulted in his 150-year prison term.” According to the interview, Madoff believes his investors should have known better than to blindly accept the abnormal returns his investments produced each year, while arguing that banks and other counterparties he worked with must have known about the scheme.
4. The scheme has destroyed the Madoff family: Madoff’s victims aren’t limited to just those who invested with him, however. On the two-year anniversary of his father’s arrest, Madoff’s son Mark hanged himself, while his other son Andrew has cut off all ties with the patriarch. In fact, even Madoff’s wife of more than 50 years, Ruth, refuses to speak with him any longer. According to Madoff, the only family members who talk to him anymore are the daughters of his wife’s niece, who attend school at a college near Madoff’s prison.
5. Even Madoff’s non-Ponzi businesses were money losers: Madoff has long maintained that while his investment-advisory practice was a total fraud, his other lines of business, like his market-making operation, were successful and legitimate. The ongoing trial of several Madoff associates, however, is putting that idea in doubt. According to Bruce Dubinsky, a forensic accountant working with Picard, the Madoff trustee, the market-making business had been losing money since at least the early 2000s, when a rule change at the SEC put pressure on market makers across Wall Street.