Madoff Investment Scandal By Ashton Leyens, David Lerman, and Jordan Cohen
Bernard Lawrence "Bernie" Madoff
Born April 29, 1938
Grew up in New York City
Graduated from Hofstra
Wife and two children
Start of Career
Founded Bernard L. Madoff Investment Securities where he was chairman
Worked as lifeguard and sprinkler installer on the side until business picked up
Gained access to the leading securties industry trade group
Securities Industry and Financial Markets Association
Madoff’s brother and niece both were active in this group
Came to America from Italy. His scheme in 1903 involved postage stamps.
Invented the Ponzi Scheme
A Ponzi Scheme is a fraud investment operation that pays returns to investors from their own money or money paid from other investors, rather than from actual profit earned
Madoff was the chairman of the Bernard L Madoff Securities LLC( limited liability company)
Starting in the early 1990’s, Madoff told family and friends that if they invested money in him, he would add 10% interest to their account each year.
Investors believed the 10% was put into their account and spread the word that Madoff was reliable, and he became more and more popular each year.
The Scam Cont.
Since people believed the 10% was being added each year, they had no reason to take their money out.
If they did take the money out, Madoff would pay them with other peoples money
Madoff continued doing this until October of 2008
Due to the economy, everyone started taking their money out and Madoff could not pay them back.
His sons found out and informed authorities
Magnitude of Scam
Madoff committed the biggest scam by a human being, scamming close to 65 billion dollars
Afffected thousands of investors
Madoff plead guilty to charges of fraud
Remains in jail until June hearing
Faces 150 years in charges
"Your Honor, for many years up until my arrest on December 11, 2008, I operated a Ponzi scheme." -- Bernard Madoff
"When I began my Ponzi scheme, I believed it would end shortly and I would be able to extricate myself and my clients from the scheme." -- Madoff
“ His greed has torn apart livelihoods, and further eroded the public's trust. It is appropriate that he is no longer relaxing comfortably in his luxury Upper East Side home, and will be in jail, where he belongs." -- U.S. Republican Rep. Spencer Bachus, of the House Financial Services Committee