The Face of Financial Scams: Bernie Madoff

Bernie Madoff was the man who ran the biggest Ponzi, estimated to be a whopping $65 billion. Bernie Madoff had his work divided into two main offices: one was his stock brokerage and his asset management business, on which the Ponzi scheme focused.

A Ponzi scheme is a financial fraud where one pays investors the money of new investors and tries to keep the cycle going. Bernie took money from his initial investors and promised a great return with little to no risk and loss. He did not invest this money in the market as promised, though. He instead attracted new investors, and when he received another lump of money from his latest victims, he would give a portion of it to his previous investors in the name of the “returns received with the money invested by him.”. 

Seeing extraordinary returns, people decided to “reinvest” this money and handed over their returned money with interest to Bernie to supposedly reinvest in the market. Bernie targeted the wealthy and ultra-rich people and did not publicly announce his asset management business, which was not legally registered. His influence and popularity were produced by the word of mouth of his clients. These clients told their wealthy friends about Madoff; they come to him in the hopes of doubling their money with little risk, and in a short amount of time, Bernie takes their money, and the vicious cycle goes on.

Dipascal was Bernie’s right hand. He was accompanied by his team of office workers, Annette Bongiorno and Joann Crupi, who created false trading reports based on the returns that Madoff ordered for each customer. They would check the prices and performances of stocks when the market closes and would forge documents of the purchase of the best-performing stocks.

On December 10, 2008, Madoff's sons Mark and Andrew 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 market crash of 2008 aided in the exposure of Bernie Madoff. The fact that he never lost money in the market and that he was producing results that were impossible to achieve made competitors and people as such suspicious. 

He died on April 14, 2021, at the age of 82 due to hypertension, atherosclerotic cardiovascular disease, and chronic kidney disease in the Federal Medical Center, North Carolina.

Throughout his lifetime, Bernie had donated millions of dollars to charity for the causes of welfare, health, and politics. But the impact of his arrest and actions is still felt for generations of the families of the victims. The Madoff Victim Fund helps to recover around 91% of the money lost by the victims and has paid around $4.221 billion to 40,843 petitioners in 127 countries. 

The case of Bernie Madoff displays how the influence of money and power can deteriorate the lives of many people and blind government controls and regulations.