10 years later, here's what became of Bernie Madoff's inner circle
- Bernard Madoff has claimed he acted alone in his $65 billion scam, but his family and close associates have never escaped suspicion.
- Fifteen people have been convicted or pleaded guilty in the scandal. Some are already out of prison.
- Madoff’s primary bank, J.P. Morgan Chase, paid billions of dollars in penalties and adopted reforms as part of an agreement with federal prosecutors to settle criminal charges.
Few people outside of Wall Street had heard of Bernard Madoff before he confessed to his epic fraud in 2008. In the decade since, he has become the personification of greed — and a household name. Madoff and his inner circle have been featured in books, movies, even an off-Broadway play.
Here is what has become of some of the major players.
The defendant
Bernie Madoff turned 80 in 2018. He apparently marked the occasion quietly at the medium security Federal Correctional Institution in Butner, North Carolina, where he is in the 10th year of a 150-year sentence. His longtime defense attorney, Ira Lee Sorkin, says he last spoke with Madoff earlier this year.
"He's keeping his mind active. He's doing OK," Sorkin said, "as well as one could expect someone to be OK when they know they're going to die in prison."
Madoff has cut back on his contacts with the news media, not responding to multiple emails from CNBC ahead of the 10th anniversary of his arrest on Dec. 11, 2008. In a 2013 interview at the prison, he said life behind bars was proving to be less stressful than life on Wall Street.
"It's kind of like being in the Army," he said, "only you're not worried about getting killed."
But in a 2015 email, he wrote, "I'm hanging in there. I miss my family terribly. How on earth did I get myself into this nightmare?"
The spouse
Madoff's wife and high school sweetheart, Ruth, was never implicated in her husband's crimes. Nonetheless, she agreed to forfeit some $75 million in assets held in her name, including the couple's Upper East Side apartment. The settlement with federal prosecutors left her with $2.5 million, which reportedly allows her to lead a comparatively modest lifestyle in Old Greenwich, Connecticut.
In one of her only interviews about the scandal, she told NBC's "Today" in 2011 that she knew nothing about her husband's fraud.
"It was something that not in a million years I would have expected," she said.
At the time, she said she had cut off all contact with her husband at her sons' insistence. But the couple is still married, and Bernie Madoff claimed to CNBC in 2013 that he still managed to make contact with Ruth about major family matters.
The sons
In the most Shakespearean twist of the scandal, neither of the Madoffs' two sons survive. Older son Mark Madoff hanged himself in 2010 on the second anniversary of his father's confession. He was 46, and his own 2-year-old son was asleep in the next room.
While both Mark and Andrew Madoff maintained that they knew nothing about their father's crimes, Mark apparently concluded he would never be able to be completely free of the scandal.
Andrew died four years later, at 48, after a long battle with mantle cell lymphoma, a rare cancer that typically strikes men over 60.
While the two sons were never charged criminally, court-appointed trustee Irving H. Picard alleged they received millions of dollars that they should have known were illicit proceeds from the fraud. In 2017, Picard and the Justice Department reached a $23 million settlement with the sons' estates, with the money to go to victims.
The family
As director of compliance for his older brother's investment advisory business, Peter Madoff was in a position to know plenty of secrets. But he insisted that his brother's fraud was not one of them. Nonetheless, the younger Madoff pleaded guilty in 2012 to one count of falsifying records and one count of conspiracy to commit securities fraud. He was sentenced to 10 years in prison and is scheduled to be released in 2021.
Peter's daughter Shana also worked in compliance for the Madoff firm. She briefly raised eyebrows when it was revealed that she was married to Securities and Exchange Commission attorney Eric Swanson, and that the couple had dated since 2003. A subsequent investigation by the SEC's Office of Inspector General found no evidence that the couple's relationship compromised the agency's examinations of the Madoff firm, and neither was accused of wrongdoing.
Today, Shana reportedly works as a yoga instructor. Swanson left the SEC in 2006 and is CEO for the Americas at XTX Markets, an electronic market-making firm.
The star witness
Bernie Madoff has always claimed he acted alone, but federal prosecutors sought to prove that could not possibly be true. Doing so would require testimony from a true insider, and Frank DiPascali fit the bill perfectly. DiPascali, Madoff's chief financial officer and right-hand man, pleaded guilty to 10 felony counts in 2009, and proceeded to sing like a canary.
For two weeks in late 2013, the Brooklyn-born college dropout mesmerized a federal jury in the trial of five ex-Madoff employees with stories about how they conspired for years to thwart federal investigators. That includes the time they produced a stack of false records for SEC examiners on site, but not before putting the papers in a refrigerator to hide the fact that they had just come out of the printer. He also recounted how he and the others tossed the stack around the office like a football to make them appear to be worn.
For more on Madoff: 10 Years Later, subscribe to American Greed on Apple Podcasts or wherever you listen.
DiPascali faced up to 125 years in prison for his own crimes, but he died of lung cancer in 2015, four months before his scheduled sentencing.
The employees
DiPascali's testimony helped seal the fate of the so-called Madoff Five, backroom staffers at Madoff's investment advisory business, which was at the heart of the fraud.
Daniel Bonventre was director of operations. Annette Bongiorno — one of Madoff's longest serving employees — joined the firm out of high school. She worked as Madoff's personal secretary for a time, eventually becoming a portfolio manager. Joann Crupi was an investment advisor, and George Perez and Jerome O'Hara developed the computer programs Madoff used to falsify trades.
All five were convicted in 2014 on a variety of fraud charges, though none was accused of knowing about Madoff's scam. Crupi, O'Hara, and Perez have already completed their sentences, Bongiorno could be out as soon as next year, and Bonventre is scheduled for release in 2023.
The bank
Madoff could not have carried out his fraud without banks, and his financial institution of choice was J.P. Morgan Chase. While Madoff told his investment advisory clients that he was investing their money in stocks, he was in fact simply depositing the funds in a Chase bank account.
Federal prosecutors said Chase should have known it was being used to commit fraud, and in 2014 they charged the bank with two felony counts for failing to maintain adequate controls. But in a deferred prosecution agreement, the feds said they would drop the charges if, within two years, the bank adopted a proper compliance system and paid $2.6 billion in fines and penalties.
The agreement did not require the bank to publicly disclose the changes it made, but in 2016, the feds kept up their end of the bargain. They told a federal judge that they were dropping the case after the bank instituted unspecified reforms and paid the money, which amounts to about 10 days of revenue.
Hear more about the major figures in the scandal, and about Madoff's life behind bars, in a special "American Greed" podcast series: "Madoff: Ten Years Later. "Subscribe on Apple Podcasts, or wherever you listen.