Madoff admitted swindling thousands of clients out of billions of dollars in investments over decades.
A court-appointed trustee has recovered more than $13 billion of an estimated $17.5 billion that investors put into Madoff’s business. At the time of Madoff’s arrest, fake account statements were telling clients they had holdings worth $60 billion.
For decades, Madoff enjoyed an image as a self-made financial guru whose Midas touch defied market fluctuations. A former chairman of the Nasdaq stock market, he attracted a devoted legion of investment clients — from Florida retirees to celebrities such as famed film director Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax.
But his investment advisory business was exposed in 2008 as a multibillion-dollar Ponzi scheme that wiped out people’s fortunes and ruined charities and foundations. He became so hated he had to wear a bulletproof vest to court.
Madoff pleaded guilty in March 2009 to securities fraud and other charges, saying he was “deeply sorry and ashamed.”
After several months living under house arrest at his $7 million Manhattan penthouse apartment, he was led off to jail in handcuffs to scattered applause from angry investors in the courtroom.
“He stole from the rich. He stole from the poor. He stole from the in between. He had no values,” former investor Tom Fitzmaurice told the judge at the sentencing. “He cheated his victims out of their money so he and his wife … could live a life of luxury beyond belief.”
U.S. District Judge Denny Chin showed no mercy, sentencing Madoff to the maximum 150 years in prison.
“Here, the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead … one that takes a staggering human toll,” Chin said.
The Madoffs also took a severe financial hit: A judge issued a $171 billion forfeiture order in June 2009 stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife, Ruth, had claimed were hers. The order left her with $2.5 million.
The scandal also exacted a personal toll on the family: One of his sons, Mark, killed himself on the second anniversary of his father’s arrest in 2010. And Madoff’s brother, Peter, who helped run the business, was sentenced to 10 years in prison in 2012, despite claims he was in the dark about his brother’s misdeeds.
Madoff’s other son, Andrew, died from cancer at age 48. Ruth is still living.
Madoff was sent to do what amounted to a life sentence at Butner Federal Correctional Complex, about 45 miles northwest of Raleigh, N.C. A federal prison website listed his probable release date as Nov. 11, 2139.
Madoff was born in 1938 in a lower-middle-class Jewish neighborhood in Queens. In the financial world, the story of his rise to prominence — how he left for Wall Street with Peter in 1960 with a few thousand dollars saved from working as a lifeguard and installing sprinklers — became legend.
“They were two struggling kids from Queens. They worked hard,” said Thomas Morling, who worked closely with the Madoff brothers in the mid-1980s setting up and running computers that made their firm a trusted leader in off-floor trading.
“When Peter or Bernie said something that they were going to do, their word was their bond,” Morling said in a 2008 interview.
In the 1980s, Bernard L. Madoff Investment Securities occupied three floors of a midtown Manhattan high-rise. There, with his brother and later two sons, he ran a legitimate business as middlemen between the buyers and sellers of stock.
Madoff raised his profile by using the expertise to help launch Nasdaq, the first electronic stock exchange, and became so respected that he advised the Securities and Exchange Commission on the system. But what the SEC never found out was that behind the scenes, in a separate office kept under lock and key, Madoff was secretly spinning a web of phantom wealth by using cash from new investors to pay returns to old ones.
Authorities say that over the years, at least $13 billion was invested with Madoff. An old IBM computer cranked out monthly statements showing steady double-digit returns, even during market downturns. As of late 2008, the statements claimed investor accounts totaled $65 billion.
The ugly truth: No securities were ever bought or sold. Madoff’s chief financial officer, Frank DiPascali, said in a guilty plea in 2009 that the statements detailing trades were “all fake.”
His clients, many Jews like Madoff and Jewish charities, said they didn’t know. Among them was Nobel Peace Prize winner and Holocaust survivor Elie Wiesel, who recalled meeting Madoff years earlier at a dinner where they talked about history, education and Jewish philosophy — not money.
Madoff “made a very good impression,” Wiesel said during a 2009 panel discussion on the scandal. Wiesel admitted that he bought into “a myth that he created around him that everything was so special, so unique, that it had to be secret.”
Like many of his clients, Madoff and his wife enjoyed a lavish lifestyle. They had a $7 million Manhattan apartment, an $11 million estate in Palm Beach, Florida and a $4 million home on the tip of Long Island. There was yet another home in the south of France, private jets and a yacht.
It all came crashing down in the winter of 2008 with a dramatic confession at Madoff’s 12th-floor apartment on the Upper East Side. In a meeting with his sons, he confided that his business was “all just one big lie.”
After the meeting, a lawyer for the family contacted regulators, who alerted the federal prosecutors and the FBI. Madoff was in a bathrobe when two FBI agents arrived at his door unannounced on a December morning. He invited them in, then confessed after being asked “if there’s an innocent explanation,” a criminal complaint said.
Madoff responded: “There is no innocent explanation.”
As he had from the start, Madoff insisted in his plea that he acted alone — something the FBI never believed. As agents scoured records for evidence of a broader conspiracy and cultivated DiPascali as a cooperator, the scandal turned Madoff into a pariah, evaporated life fortunes, wiped out charities and apparently pushed some investors to commit suicide.
A trustee was appointed to recover funds — sometimes by suing hedge funds and other large investors who came out ahead — and divvying up those proceeds to victims. The search for Madoff’s assets “has unearthed a labyrinth of interrelated international funds, institutions and entities of almost unparalleled complexity and breadth,” the trustee, Irving Picard, said in a 2009 report.
The report said the trustee has located assets and businesses “of interest” in 11 places: Great Britain, Ireland, France, Luxembourg, Switzerland, Spain, Gibraltar, Bermuda, the British Virgin Islands, the Cayman Islands, the Bahamas. More than 15,400 claims against Madoff were filed.
At Madoff’s sentencing in June 2009, wrathful former clients stood to demand the maximum punishment. Madoff himself spoke in a monotone for about 10 minutes. At various times, he referred to his monumental fraud as a “problem,” “an error of judgment” and “a tragic mistake.”
He claimed he and his wife were tormented, saying she “cries herself to sleep every night, knowing all the pain and suffering I have caused.”
“That’s something I live with, as well,” he said.
Afterward, Ruth Madoff — often a target of victims’ scorn since her husband’s arrest — broke her silence that same day by issuing a statement claiming that she, too, had been misled by her high school sweetheart.
“I am embarrassed and ashamed,” she said. “Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.”
About a dozen Madoff employees and associates were charged in the federal case. Five went on trial in late 2013 and watched DiPascali take the witness stand as the government’s star witness.
DiPascali recounted for jurors how just before the scheme was exposed, Madoff called him into his office.
“He’d been staring out the window the all day,” DiPascali testified. “He turned to me and he said, crying, ‘I’m at the end of my rope. … Don’t you get it? The whole goddamn thing is a fraud.’”
In the end, that fraud brought fresh meaning to “Ponzi scheme,” named after Charles Ponzi, who was convicted of mail fraud after bilking thousands of people out of a mere $10 million between 1919 and 1920.
“Charles Ponzi is now a footnote,” said Anthony Sabino, a defense lawyer specializing in white collar criminal defense. “They’re now Madoff schemes.”
How Republicans Became the ‘Barstool’ Party
A half-decade ago, the originally Boston-based site and its rabid fan community wouldn’t have scanned as “political” at all. But now, its proudly Neanderthal, reactionary ethos aligns perfectly with the side of our political binary that Trump reconfigured: the one whose common denominator is a tooth-and-nail, middle-finger unwillingness to accept liberal social norms.
If you looked at Portnoy circa 2010 — a budding bro-entrepreneur, popping champagne with models in cheesy photo shoots — you’d have to squint pretty hard to see a potential Republican standard-bearer. If you look now, it’s hard not to. It’s commonplace by now to observe that the Trump presidency “changed everything” for Republicans, from conventional wisdom on policy to how their internal politics are conducted. But first and foremost, it changed the face the party presented to the world. Where onetime nominees like Mitt Romney and John McCain tried and failed to subordinate cultural grievance to a more professionalized, inclusive style of politics, Trump succeeded by placing it right on the front of the tin. And when he casually dismantled that old fusion of free-market economic fervor and country-club traditionalism, Barstool was ready.
The rise of the “Barstool Republican,” to coin a phenotype, doesn’t necessarily explain Trump. It is, however, a useful way to understand what’s happened to American politics without constantly invoking the former president’s name. Portnoy’s devotees aren’t MAGA fanatics or Q fans who live to torment liberals, and they’re certainly not part of the GOP’s evangelical base. (One could imagine the last thing they’d want is a Supreme Court that strikes down Roe.) But the Barstool Republican now largely defines the Republican coalition because of his willingness to dispense with his party’s conventional policy wisdom on anything — the social safety net, drug laws, abortion access — as long as it means one thing: he doesn’t have to vote for some snooty Democrat, and, by proxy, the caste of lousy deans that props up the left’s politically-correct cultural regime.
The backlash to liberal domination of pop culture and the past decade’s transformation of speech norms created the Barstool Republican long before Portnoy’s name was bandied about in jest as a political candidate. And if you’ve been paying attention, their cultural revolution dates back to a time when such antics were more likely to get you kicked out of Mar-a-Lago than installed as its lifelong “El Presidente.”
Lost in the annals of a time when culture wars weren’t quite as central to our national politics is a nomenclature that now seems almost quaint: the so-called “South Park Republican.”
As far back as 2001, the gadfly conservative blogger Andrew Sullivan was using the term to describe members of his political tribe who shared the anti-P.C., socially libertarian views of “South Park” creators Matt Stone and Trey Parker. Stone and Parker, true to form, loudly protested their hatred of both major parties. Still, the label stuck, inspiring sparring New York Times columns and even a book-length exploration of the concept by conservative writer Brian C. Anderson.
In the political climate of the mid-2000s, the concept’s appeal was obvious: As Gen X-ers and younger Baby Boomers entered the ranks of the political elite, it made sense that they would dispense with the blue-blooded stuffiness and social conservatism of the Reagan-Bush imperium in favor of a vaguely countercultural, post-Sixties tolerance. W traded his father’s country-club affect for a pair of cowboy boots, but he wasn’t fooling anyone: The cultural energy in the Republican Party, to the extent that it had any, was in its feather-ruffling libertarian wing, whose influence would soon reach its zenith with the self-proclaimed Ron Paul Revolution. But like so many would-be revolutions, this one was denied — or at least delayed and mutated.
Paul’s 2012 bid to become the Republican Party’s presidential standard-bearer fizzled out in spectacular fashion, failing to convert internet hype into any meaningful primary support. Romney won the nomination and invited the youthful Wisconsin congressman Paul Ryan along for the ride (whose rad workout gear and politically inscrutable love of Rage Against the Machine, alas, failed to inspire a Romney-Ryan youth movement).
Crashing on the rocks of both Barack Obama’s megawatt cultural celebrity and the looming coronation of Jeb Bush as the post-“autopsy” face of the GOP, the Rude Republican cohort was at loose ends — until an unlikely salvation came in the form of a 6’3” reality show host and frequent Howard Stern guest descending his golden escalator into the first paragraph of 21st-century American history.
Trump was at first an uneasy fit for both the more culturally-sophisticated, libertarian-leaning members of the Republican coalition as well as their staid religious counterparts. But at the same time he was hotwiring Republican culture and pushing it to the limits of street-legality, anti-P.C. critics saw another revolution happening within liberal politics — and, by the transitive property, pop culture writ large. In their eyes, Hillary Clinton’s campaign represented the triumph of a pro-establishment cultural nanny state that rejected Obama’s attempted de-escalation of the culture wars in favor of a rigid new etiquette of social justice: A rainbow flag hoisted, in effect, over the Bushes’ Kennebunkport compound.
One of Trump’s early adopters articulated the mindset perfectly in August 2015, back when Jeb! was still his closest primary threat: “I am voting for Donald Trump. I don’t care if he’s a joke. I don’t care if he’s racist. I don’t care if he’s sexist. I don’t care about any of it. I hope he stays in the race and I hope he wins. Why? Because I love the fact that he is making other politicians squirm. I love the fact he says shit nobody else will say, regardless of how ridiculous it is.”
No points for guessing the author: Dave Portnoy, birthing the Barstool Republican with a single 200-word blog post. Trump transformed the political landscape by tapping into a powerful desire for freedom from criticism or censure — a desire that Portnoy shared, and which has only grown more intense and widespread as the panopticon of social media becomes the primary stage for not just national politics, but civic life at every level.
In a column this February for The Week, the Catholic social conservative writer Matthew Walther referred to “Barstool conservatives” as primarily sharing a “disdain for the language of liberal improvement, the hectoring, schoolmarmish attitude of Democratic politicians and their allies in the media, and, above all, the elevation of risk-aversion to the level of a first-order principle by our professional classes.” In other words: culture-war issues.
Oddly enough, despite the inherent thirst for conflict that it brings, the ascent of Barstool-ism within the Republican Party can be chalked up to ideological diversity within the GOP. What could unite free-market libertarians, revanchist Catholics, Southern evangelicals, and working-class Reagan Democrats but their shared hatred of… actual Democrats?
With that as the party’s guiding principle, and no clear policy agenda to speak of — the 2020 RNC literally did not have a new policy platform — those willing to trash the Democratic cultural regime most loudly and consistently are firmly in command, with more staid Republicans forced to at least provide cover, if not actively follow their cues.
They’re forced to defend freshman North Carolina Rep. Madison Cawthorn in the face of his attention-seeking tweets and allegations of sexual harassment from his (very recent) college days, while he ranks in the top 10 members of Congress in missed votes. They’re forced to defend Florida Rep. Matt Gaetz as he faces his own allegations of sexual impropriety — not to mention his frat-boy antics, like showing up to Congress in a gas mask in the earliest days of the coronavirus pandemic. They’re forced to defend Colorado Rep. Lauren Boebert as she fends off complaints from constituents about her “embarrassing” freshman term in Congress, after winning a primary and general election largely on the strength of her, well, bar ownership.
So just as anti-P.C., vaguely amoral Barstool-ism can be a strength, it can also be a weakness. In a media environment built to reinforce and intensify one’s ideological beliefs, being on the attack all the time can leave you in an exhausting state of constant defense. Yes, it can galvanize — nearly 75 million people voted to re-elect Donald Trump, the Stoolie-in-chief — but it can also exasperate and infuriate in turn — a record 81 million Americans voted for Trump’s purposely less-pugilistic opponent, Joe Biden. It also runs the risk of all novelty: that people might just bore of it. Yesterday’s provocation becomes today’s status quo, and in turn tomorrow’s epic cringe.
When Republican voters made Trump their presidential nominee in 2016, they chose gloves-off culture war over either Jeb Bush’s earnest compromise or the imitations of a careerist provocateur like Sen. Ted Cruz. Trump tapped into a very real dissatisfaction in the American electorate with the liberal status quo around speech and culture, and reaped both the attendant rewards and backlash. Someone like Dave Portnoy is, if not a viable presidential candidate, at least a credible successor to the role of the office’s last Republican occupant: Trump, Gaetz, Boebert, Cawthorn and their ilk all share Portnoy’s single-minded obsession with scoring headlines and affirming their constituents’ cultural identities at any cost.
In a media-obsessed world, it’s a powerful, intoxicating skill. And now that it’s proven a viable pathway to electoral success, Republicans are — perhaps wisely — clinging to it for dear life. As a creation of Judd Apatow, the 21st century’s great dorm-room comedy auteur, once said: “Pandora doesn’t go back in the box, he only comes out.”
Driver crashes into Florida Pride parade; mayor says 1 dead
News outlets reported that the driver of the pickup truck was taken into custody. Authorities did not immediately give details about the victims or say whether they believe the crash was intentional.
“This is a terrorist attack against the LGBT community,” Trantalis told reporters. “This is exactly what it is. Hardly an accident.”
Photos and video from the scene showed Democratic Rep. Debbie Wasserman Schultz in tears while in a convertible at the parade. A spokesperson for Wasserman Schultz did not immediately return an email seeking comment.
Spectator Christina Currie told the South Florida SunSentinel that she was with her family at the start of the parade.
“All of a sudden there was a loud revving of a truck and a crash through a fence,” Currie said. “It was definitely an intentional act right across the lanes of traffic.”
Wilton Manors police tweeted Saturday night that the public is not in danger.
“A tragic incident occurred at today’s Stonewall event,” Wilton Manors Mayor Scott Newton said in a statement, according to WPLG-TV. “Out of respect for everyone involved, the parade has been canceled and a thorough investigation is being conducted.”
June is Pride Month, commemorating the June 1969 police raid targeting gay patrons at the Stonewall Inn in New York that led to an uprising of LGBTQ Americans and served as a catalyst for the gay rights movement.
Hard-line judiciary head wins Iran presidency amid low turnout
In initial results, former Revolutionary Guard commander Mohsen Rezaei won 3.3 million votes and moderate Abdolnasser Hemmati got 2.4 million, said Jamal Orf, the head of Iran’s Interior Ministry election headquarters. The race’s fourth candidate, Amirhossein Ghazizadeh Hashemi, had around 1 million votes, Orf said.
Hemmati offered his congratulations on Instagram to Raisi early Saturday.
“I hope your administration provides causes for pride for the Islamic Republic of Iran, improves the economy and life with comfort and welfare for the great nation of Iran,” he wrote.
On Twitter, Rezaei praised Khamenei and the Iranian people for taking part in the vote.
“God willing, the decisive election of my esteemed brother, Ayatollah Dr. Seyyed Ebrahim Raisi, promises the establishment of a strong and popular government to solve the country’s problems,” Rezaei wrote.
The quick concessions, while not unusual in Iran’s previous elections, signaled what semiofficial news agencies inside Iran had been hinting at for hours: That the carefully controlled vote had been a blowout win for Raisi amid the boycott calls.
As night fell Friday, turnout appeared far lower than in Iran’s last presidential election in 2017. At one polling place inside a mosque in central Tehran, a Shiite cleric played soccer with a young boy as most of its workers napped in a courtyard. At another, officials watched videos on their mobile phones as state television blared beside them, offering only tight shots of locations around the country — as opposed to the long, snaking lines of past elections.
Balloting came to a close at 2.a.m. Saturday, after the government extended voting to accommodate what it called “crowding” at several polling places nationwide. Paper ballots, stuffed into large plastic boxes, were to be counted by hand through the night, and authorities said they expected to have initial results and turnout figures Saturday morning at the earliest.
“My vote will not change anything in this election, the number of people who are voting for Raisi is huge and Hemmati does not have the necessary skills for this,” said Hediyeh, a 25-year-old woman who gave only her first name while hurrying to a taxi in Haft-e Tir Square after avoiding the polls. “I have no candidate here.”
Iranian state television sought to downplay the turnout, pointing to the Gulf Arab sheikhdoms surrounding it ruled by hereditary leaders, and the lower participation in Western democracies. After a day of amplifying officials’ attempts to get out the vote, state TV broadcast scenes of jam-packed voting booths in several provinces overnight, seeking to portray a last-minute rush to the polls.
But since the 1979 revolution overthrew the shah, Iran’s theocracy has cited voter turnout as a sign of its legitimacy, beginning with its first referendum that won 98.2% support that simply asked whether or not people wanted an Islamic Republic.
The disqualifications affected reformists and those backing Rouhani, whose administration both reached the 2015 nuclear deal with world powers and saw it disintegrate three years later with then-President Donald Trump’s unilateral withdrawal of America from the accord.
Voter apathy also has been fed by the devastated state of the economy and subdued campaigning amid months of surging coronavirus cases. Poll workers wore gloves and masks, and some wiped down ballot boxes with disinfectants.
If elected, Raisi would be the first serving Iranian president sanctioned by the U.S. government even before entering office over his involvement in the mass execution of political prisoners in 1988, as well as his time as the head of Iran’s internationally criticized judiciary — one of the world’s top executioners.
It also would put hard-liners firmly in control across the government as negotiations in Vienna continue to try to save a tattered deal meant to limit Iran’s nuclear program at a time when Tehran is enriching uranium at its highest levels ever, though it still remains short of weapons-grade levels. Tensions remain high with both the U.S. and Israel, which is believed to have carried out a series of attacks targeting Iranian nuclear sites as well as assassinating the scientist who created its military atomic program decades earlier.
Whoever wins will likely serve two four-year terms and thus could be at the helm at what could be one of the most crucial moments for the country in decades — the death of the 82-year-old Khamenei. Speculation already has begun that Raisi might be a contender for the position, along with Khamenei’s son, Mojtaba.
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