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Bernie Madoff was born in Queens, New York, in 1938. He met and began dating his future wife, Ruth, in his teenage years. Madoff’s father started a sporting goods store which promptly went out of business during the Korean War. His father’s failure served as a motivating factor for Madoff and made him determined to obtain the success his father never could. At age 22, he started his own company: Bernard L. Madoff Investment Securities LLC. He convinced family and friends to invest in his company, but when the stock market shifted in 1962, his father-in-law had to lend him money to prevent from closing. After this initial roadblock, Madoff tried to change with the times. He and his brother Peter developed electronic trading capabilities for the company, adding a more modern and technological component. This digitization made the company more promising and boosted overall business significantly. By the late 1980s, Madoff was making close to 100 million dollars per year. Little did his investors know it was all a scheme – a Ponzi scheme.


In most Ponzi schemes, the perpetrator promises his or her clients a large amount of profit, with little to no risk—ideal for attracting investors. Madoff himself used the money coming in from new investors to pay back older investors that wanted to cash out. Much of the money that should have been kept in the business was used to fund his family’s lavish lifestyle. Madoff would even make up fake earnings reports to satisfy his customers. As long as money continues to flow from new investors, a Ponzi scheme can endure. When the market turns, however, and large numbers of investors want to cash out at the same time, the scheme implodes, leaving countless investors empty-handed. Madoff’s scheme cheated investors and nonprofit organizations out of tens of billions of dollars over at least seventeen years. Organizations such as Hadassah, a women’s charity, and the Elie Wiesel Foundation for Peace, were almost completely wiped out by Madoff’s criminal Ponzi scheme. Many lost their life savings.


In late 2008, the market dropped, and Madoff’s luck finally ran out. Unable to keep his fraud going, he confessed his dealings to his sons, who immediately turned him into the authorities. Madoff pleaded guilty to eleven federal felony charges in 2009, including wire fraud, perjury, money laundering, and securities fraud. He was sentenced to 150 years in prison and ordered to give away 170 million dollars in assets to make reparations. Some of the investors he’d initially paid back had to deposit some of their money into a victim’s fund to help pay back the investors left penniless after Madoff’s elaborate fraud operation.