World

Bernie Madoff, the Ponzi scheme mastermind, dies in jail

NEW YORK Bernie Madoff, who was convicted for running the largest known Ponzi scheme in history, died yesterday in federal prison where he was serving a 150-year sentence, the Bureau of Prisons said. He was 82.

Madoff had been suffering from chronic kidney failure and several other medical ailments.

He had been held at a federal prison in Butner, North Carolina, after being sentenced in June 2009 for engineering a fraud estimated as high as US$64.8 billion (S$86.6 billion).

Madoff's thousands of victims, large and small, included individuals, charities, pension funds and hedge funds.

Among those he betrayed were the actors Kevin Bacon, Kyra Sedgwick and John Malkovich; and a charity associated with director Steven Spielberg.

Owners of the New York Mets, long-time Madoff clients, struggled for years to field a good baseball team because of losses they suffered.

"We thought he was God. We trusted everything in his hands," Nobel Peace Prize winner Elie Wiesel, whose foundation lost US$15.2 million, said in 2009.

Some victims lost everything. Many came from the Jewish community, where Madoff had been a major philanthropist.

Madoff's crimes were revealed to the authorities in 2008 by his two sons, who were not part of the scheme.

The fraud exposed holes at the US Securities and Exchange Commission, which through incompetence or neglect botched a half-dozen examinations.

Madoff had been the largest market-maker on the Nasdaq, once serving as its non-executive chairman. Employees at his firm said they felt like part of Madoff's family. They did not know he was running his fraud on a different floor.

Only a trusted few did.

In a typical Ponzi scheme, money from newer investors is used to pay sums owed to earlier investors.

Madoff said his fraud began in the early 1990s, but prosecutors and many victims believe it started earlier.

Investors were entranced by the steady, double-digit annual gains that Madoff seemed to generate, and which others found impossible to explain or duplicate.- REUTERS

WORLD