On March 12, Bernard Madoff pleaded guilty to an 11-count criminal complaint charging him with defrauding numerous investors of possibly more than $60 billion. During his plea, Madoff read from a prepared statement: “I am painfully aware that I have deeply hurt many, many people, including family, friends and associates.” Investors in the courthouse complained that he showed no emotion.
Madoff, who had been confined to his Upper East Side penthouse apartment in Manhattan since December 2008, steadfastly claimed that he alone perpetrated the crime. Prior to pleading guilty, he requested that his wife be allowed to maintain possession of their $7 million penthouse and more than $60 million in savings. He now sits in jail awaiting sentencing.
Thousands of people who counted on Madoff to guard their investments are now faced with the horrible truth that their principal has vanished, and they face financial devastation. Charities that trusted Madoff have to reduce or eliminate their good works, and in some cases, dissolve their organizations.
Perhaps the most aggrieved parties are the retired people who had invested all of their nest eggs with Madoff. Many are forced to sell their homes and move in with relatives. They’re also seeking any type of employment just to put food on the table. Their financial futures are bleak.
Ponzi schemes are collapsing around the world because of the severe economic downturn. Though the losses total a fraction of the size of Madoff’s scheme, the victims are just as destitute. The stories are all the same: Investment advisors lived an affluent lifestyle by stealing from their friends and neighbors while masquerading as respected members of the community.
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