Bernard Madoff's secret life

The former Nasdaq chairman turned world's-biggest fraudster was a pillar of the Wall Street establishment. But it will be a long time before we really find out how he pulled off his massive con trick.

The secret life of Bernard Madoff unravelled as he stood in his Upper East Side apartment in a pale blue bathrobe and slippers, facing two FBI agents. "We're here to find out if there's an innocent explanation," they told him. "There is no innocent explanation," Madoff replied. Within hours, says the New York Daily News, investors were reeling at charges that one of the most trusted names on Wall Street was a fraud, responsible for $50bn in losses globally "a sum that provokes slack-jawed awe".

"In its conception, the scam is a classic. In its size, it is breathtaking," says The Independent. As Madoff, 70, confessed to his sons, Mark and Andrew, who later alerted the authorities, his money-management business was "just one big lie... a giant Ponzi scheme". Madoff managed $17bn directly for clients but, through derivatives, an estimated $50bn was banking on his performance. Yet the complex trading he claimed to be carrying out in his closed-off eyrie on the 17th floor of the Lipstick Building in mid-town Manhattan was a sham: the magic returns were "simply cash brought in from new victims". Madoff knew he was "finished" when investors under pressure to release cash demanded $7bn in redemptions. The money had long since evaporated.

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