ON THIS DAY

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June 29, 2009

Bernie Madoff sentenced

2009 mugshot

Bernard Madoff (1938 – 2021) was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion.Madofff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business.

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian confidence artist Charles Ponzi, this type of scheme misleads investors by either falsely suggesting that profits are derived from legitimate business activities (whereas the business activities are non-existent), or by exaggerating the extent and profitability of the legitimate business activities, leveraging new investments to fabricate or supplement these profits. A Ponzi scheme can maintain the illusion of a sustainable business as long as investors continue to contribute new funds, and as long as most of the investors do not demand full repayment.

On March 12, 2009, Madoff pleaded guilty to 11 federal felonies, including securities fraud, wire fraud, mail fraud, money laundering, making false statements, perjury, theft from an employee benefit plan, and making false filings with the SEC. It is speculated he pleaded guilty to all charges without a plea bargain in order to avoid naming any associates and co-conspirators in the scheme.

On June 29, 2009, Madoff was sentenced to the maximum sentence of 150 years in federal prison. His lawyers initially asked the judge to impose a sentence of 7 years, and later requested that the sentence be 12 years, because of Madoff's advanced age of 71 and his limited life expectancy.

Madoff died of hypertension, atherosclerotic cardiovascular disease, and chronic kidney disease at the age of 82 in a federal prison for inmates with special health needs on April 14, 2021.

In a May 4, 2011, statement, it was calculated that the total amount owed to customers (with some adjustments) was $57 billion.

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