Bernie Madoff is the confessed operator of the largest financial fraud in U.S. history.
Over the years before he was caught, he cultivated a reputation as a financial mastermind and prominent philanthropist.
Prosecutors estimated the fraud to be worth $64.8 billion based on the amounts in the accounts of Madoff's 4,800 clients as of November 30, 2008.
It is said that the ponzi scheme was finally exposed by the global financial crisis in 2008.
Madoff at some point started paying investors with money received from other investors, a Ponzi scheme, according to the SEC.
In 2008, Madoff's investors had requested the return of about $7 billion by the end of the year, part of a broad trend in which investors are pulling massive sums from Wall Street.
Now, the idea of a ponzi scheme means that the withdrawals are always less than the new money being brought into the ponzi.
Madoff told one of his sons that he was struggling to find the money. Then he told his other son that he was ready to pay annual bonuses to employees. The sons confronted their father, asking how the firm could pay bonuses if it couldn't pay investors.
Madoff asked them to come to his apartment, saying "he wasn't sure he would be able to hold it together" at the office, the SEC said. There he said he was "finished." The business was "a giant Ponzi scheme" -- "all just one big lie," the SEC documents said. He estimated that his investors had lost $50 billion. The sons reported Madoff to the authorities.
However, quantitative financial specialist Harry Markopolos spotted Bernard Madoff's $65bn Ponzi scheme years before it imploded, and provided evidence to the SEC 5 TIMES before the ponzi came to an end. Who knows if it would still be going if it weren't for the 2008 Financial Crisis...
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