More than money was lost. At least two people, desperate over their losses, committed suicide. A major Madoff investor suffered a fatal heart attack after months of litigation over his role in the system. Some investors have lost their homes. Others lost the trust and friendship of relatives and friends who had inadvertently put them at risk.
Mr. Madoff was not spared these tragic aftershocks. His older son Mark committed suicide at his Manhattan apartment early in the morning on December 11, 2010, the second anniversary of his father’s arrest. He has been characterized by his lawyer Martin Flumenbaum as an “innocent victim of his father’s monstrous crime who succumbed to two years of relentless pressure from false accusations and innuendos”. One of the last messages from Mark Madoff to Mr. Flumenbaum before his death was: “Nobody wants to believe the truth. Please take care of my family. “
In June 2012, Bernard Madoff’s brother Peter, a lawyer by training, pleaded guilty to tax and securities fraud charges related to his role as Chief Compliance Officer at his older brother’s company. However, he was not accused of knowingly participating in the Ponzi scheme. In December 2012, he forfeited all of his personal property to the government to compensate his brother’s victims and was sentenced to 10 years in prison. And on September 3, 2014, Andrew, Mr Madoff’s younger son, died of cancer at the age of 48. He had blamed the stress of the scandal for the return of the cancer he fought in 2003.
In addition to the number of people, professional reputations were also destroyed. More than a dozen prominent hedge funds and money managers, including J. Ezra Merkin and the Fairfield Greenwich Group, had to admit that they turned their clients’ money on to Mr Madoff and lost it all. Swiss private bankers, global commercial banks, and large accounting firms have all been dragged to court by clients who have relied on them to monitor their Madoff investments.
Securities Investor Protection Corporation, the industry-funded organization founded in 1970 to provide limited protection for broker clients, spent more on Madoff’s bankruptcy than on all previous liquidations combined – and was heavily attacked by victims who did the Felt they had been wrongly refused remuneration.
And for the Securities and Exchange Commission, which since at least 1992 has unsuccessfully investigated more than half a dozen credible tips about Mr. Madoff’s fraud program, it was the most humiliating failure in its 75-year history.
