[15] 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".
[9] On March 12, 2009, Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme.
[48] After a trial run, the technology that the firm helped to develop became the National Association of Securities Dealers Automated Quotations Stock Market (Nasdaq).
David Friehling, Bernard Madoff's tax accountant, who pleaded guilty in a related case, was reportedly assisting in the investigation.
[89] On February 17, 2022, Madoff's sister, Sondra Weiner, and her husband, Marvin, were both found dead with gun wounds in their Boynton Beach, Florida home.
[93] Bernard Madoff served on the board of directors of the Securities Industry Association, a precursor of SIFMA, and was chairman of its trading committee.
[100] Madoff's name first came up in a fraud investigation in 1992, when two people complained to the SEC about investments they made with Avellino & Bienes, the successor to his father-in-law's accounting practice.
[102] In 2004, Genevievette Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations (OCIE), informed her supervisor branch chief Mark Donohue that her review of Madoff found numerous inconsistencies, and recommended further questioning.
[106] While awaiting sentencing, Madoff met with the SEC's inspector general, H. David Kotz, who conducted an investigation into how regulators had failed to detect the fraud despite numerous red flags.
[115][117] 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.
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.
[118] 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.
[101] 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.
[18] 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 his guilty plea on March 12, 2009.
[125] 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.
[126] 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.
[136][137] According to an SEC indictment, office workers Annette Bongiorno and Joann Crupi created false trading reports based on the returns that Madoff ordered for each customer.
He knew that if the amount he "managed" became known, investors would question whether he could trade on the scale he claimed without the market reacting to his activity, or whether there were enough options to hedge his stock purchases.
[118] Additionally, at least one hedge-fund manager, Suzanne Murphy, revealed that she balked at investing with Madoff because she did not believe there was enough volume to support his purported trading activity.
Erin Arvedlund, who publicly questioned Madoff's reported investment performance in 2001, stated that the actual amount of the fraud might never be known, but was likely between $12 and $20 billion.
The plea was the response to a criminal complaint filed two days earlier, which stated that over the past 20 years, Madoff had defrauded his clients of almost $65 billion in the largest Ponzi scheme in history.
[111][155] He pleaded guilty to all charges without a plea bargain; it has been speculated that he did this instead of cooperating with the authorities in order to avoid naming any associates and co-conspirators in the scheme.
[158] Friehling extensively cooperated with federal prosecutors and testified at the trials of five former Madoff employees, all of whom were convicted and sentenced to between 2 and a half and 10 years in prison.
Madoff's right-hand man and financial chief, Frank DiPascali, pleaded guilty to 10 federal charges in 2009 and (like Friehling) testified for the government at the trial of five former colleagues, all of whom were convicted.
He stated that he always intended to resume legitimate trading activity, but it proved "difficult, and ultimately impossible" to reconcile his client accounts.
I know that doesn't help you.Judge Chin had not received any mitigating factor letters from friends or family testifying to Madoff's good deeds.
[169] Ruth did not attend court but issued a statement, saying: "I am breaking my silence now because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie's crime, which was exactly the opposite of the truth.
[178] On December 18, 2009, Madoff was moved to Duke University Medical Center in Durham, North Carolina, and was treated for several facial injuries.
[185] In February 2020, his lawyer filed for compassionate release from prison on the claim that he had chronic kidney failure, a terminal illness leaving him less than 18 months to live, and that the COVID-19 pandemic further threatened his life.
[200] He served on the executive council of the Wall Street division of the UJA Foundation of New York which declined to invest funds with him because of the conflict of interest.