Thoughts on Bernie Madoff and HBO's The Wizard of Lies

8 years ago Bernie Madoff was sentenced to 150 years in prison - he conned billions from investors and went unnoticed for decades. 

It was the largest Ponzi Scheme in the history of the U.S. I find the Bernie Madoff case to be extremely interesting and recently Madoff has been popping up again on the news.

Last week, the total marketcap for crypto reached $65 billion dollars which is the amount that Madoff scammed from his victims. This image was making the rounds in crypto forums with the marketcap amount and an image of Bernie Madoff below. The joke implying that crypocurrency is nothing but a giant Ponzi Scheme. 

Recently, HBO just released the movie The Wizard of Lies, starring Robert De Niro as Bernie Madoff. I just finished the movie and thought it did an decent job in explaining the final days of the scheme. The bulk of the movie takes place during the epicenter of the frauds collapse, with the opening scene beginning with Bernie telling his sons that his investment firm is nothing but a giant lie.  

The movie was quite depressing, especially towards the end. Although the film spends time telling stories of the investors that were defrauded, the movie conveys most of the time telling the devastation Bernie had done to his immediate family. Bernie kept his wife and two sons in the dark about his crimes and the film shows the long lasting damage he has done to the people he loved the most, and none of them ever found out why.

His oldest son, Mark, eventually fed up with what his father had done to him, commits suicide by hanging himself in his apartment. Three other investor also commit suicide, one by jumping off a building and another by slitting his wrists in his office. While the Bernie Madoff case is interesting, it is also quite a sad story. There are no winners here and only losers.  

Not-So-Fun Facts

After watching the movie I was left wanting to learn more about the case and here are a few items I found noteworthy:

Madoff's scheme began to unravel after the wake of the 2007-2008 financial crisis. In December 2008, many of Madoff's investors began to pull out due the unstable economic environment. Madoff was about to lose more money then what his assets on the books could cover. In a last ditch effort, Madoff tried to keep the scheme afloat by desperately trying to find new investors. 

95-year old philanthropist Carl J. Shapiro invested $250 million one week before the scheme was reveled. Shapiro was also one of Madoff's longest friends and biggest financial backers. Another investor gave Madoff $10 million mere days before the scheme came to light. The investor tried to recover the $10 million which was never deposited but the judge ruled that the investor was "indistinguishable" from the the rest of Madoff's clients. Talk about bad timing.

After the government distributed payouts with whatever money was left; there was still $2.5 billion dollars that went unclaimed. According to Daily Mail, about $1.2 billion of that sum came from two Caribbean hedge funds and the reason why it went unclaimed was because some investors used the off-shore funds as tax-shelters from the U.S. government. It isn't against the law to not claim the money but the IRS believes that investors would rather lose the money than go through investigations about their off-shore accounts. 

Image source:

http://www.indiewire.com/2017/01/wizard-of-lies-teaser-trailer-robert-de-niro-bernie-madoff-hbo-film-michelle-pfeiffer-1201764600/