5. Bernie Madoff’s Sons Died Soon After His Arrest
One of the most devastating parts of Bernie Madoff’s fall from grace was the impact his arrest had on his family and the deaths of his two beloved sons soon after his arrest for his gigantic Ponzi scheme. Two years to the day after Bernie was arrested, his son Mark was found dead in his apartment. Horrifyingly, Mark was found hanging from a dog leash while his toddler son slept not too far away. Just before he committed suicide, he sent his wife an email asking for someone to check on their son, and by the time someone got to the apartment Mark was dead.
After Mark’s death, people close to him said he’d been unable to get over the toxic reputation of his own last name. Many of the civil lawsuits to have come out of the fraud investigation named Mark, as well as Bernie’s other son, Andrew. Bernie’s sons maintained they had no idea what their father was doing even though they worked at their father’s firm as stock traders. The trustee appointed by the court to investigate Madoff’s fraud eventually accused the brothers of living lavish lifestyles from their father’s ill-gotten gains.
Madoff experienced yet another heartbreaking tragedy when Andrew died from mantle cell lymphoma a few years later in late 2014. After announcing the recurrence of cancer, Andrew said he blamed the cancer on the stress that came from being his father’s son. While they were alive, Andrew and Mark escaped criminal court and were never charged with any involvement in their father’s Ponzi scheme. Since the deaths of his sons, Madoff has looked frailer each time he’s appeared in public or in an interview.
4. Madoff Makes $40 a Month in Prison by Cleaning Phones and Computers
Although Bernie Madoff’s prison sentence hasn’t exactly required hard time and work on a chain gang, the former billionaire has been given a job at Butner Federal Correctional Complex where he’s been serving his sentence of 150 years behind bars. According to an interview with CNN, Madoff was put in charge of keeping the common area clean which included dusting the computers and the phones. His work day wasn’t exactly a 40-hour a week job, and he just worked a few hours a day for a paycheck of about $40 a month. CNN revealed that Madoff was so strapped for cash that his phone call for the interview was made collect.
Some of the posh assets Madoff was required to give up when he confessed to his crimes included a Manhattan penthouse worth $7 million, several homes in Florida, a beach house in Montauk, a residence in France, and even a giant yacht. Not surprisingly, his current accommodations are vastly different from those luxurious surroundings, and Madoff told CNN that he couldn’t sleep at night. However, it wasn’t the change in scenery that caused him to lose sleep so much as it was his role in the Ponzi scheme, which he says he started in 1987 after the famous Black Monday crash that was so catastrophic that it closed down trading on Wall Street.
Madoff is serving his sentence at the same time as his brother, Peter, who was given a sentence of 10 years for working with Bernie to cover up the Ponzi scheme. Peter’s sentence was part of a plea deal he struck with prosecutors, but he never actually admitted to knowing all the details about Bernie’s Ponzi scheme.
3. Lawyers on the Case Have Collected Hundreds of Millions of Dollars in Fees
The billions of dollars lost by Bernie Madoff’s investors amounted to an absolutely incredible sum of money, but it’s also shocking how much the lawyers on the case have earned. In working to recover the billions of dollars Madoff swindled from his investors, the lawyers earned a staggering $701 million in fees as of May 2013. In addition to hundreds of millions going to various law firms, the legal tab even included $25 million labeled as administrative costs. The costs have been funded by the Securities Investor Protection Corporation, which collects fees from participating Wall Street firms and then uses the money to provide payouts during fraud or bankruptcy.
It’s probably not a surprise that law firms are making serious money off the case, but the fees charged by the bankruptcy trustee, Irving Picard, are pretty impressive in their own right. Picard makes an astounding $890 an hour and sends a bill to the court each month with all the fees and hours billed by lawyers working on the case. Some of the charges included more than $60,000 in copying costs and $161,000 for online research. In addition, forensic accountants hired to investigate Madoff’s fraudulent activities added many more millions to the legal tab.
To recover money for victims, the forensic accountants, lawyers, and administrative staff investigate parties that benefited from the fraud. After locating investors who made money from the scheme, settlements are reached, and the money is then sent to victims. However, not every person labeled as a participant and beneficiary has had to settle with the court. For example, Picard wanted money from Sonja Kohn, a banker in Austria, but the judge couldn’t find evidence Kohn personally took part in organized crime.