Bernie Madoff's 7 Deadliest Lies
Today is the fifth anniversary of his arrest for the biggest Ponzi scheme ever.
Dec. 11, 2013— -- intro:On the fifth anniversary of Bernie Madoff's arrest for perpetuating the biggest Ponzi scheme ever, here's a look at some of the claims that the 75-year-old has made.
As the trial of five former Madoff employees continues in New York, Madoff is serving a 150-year sentence in a North Carolina prison.
In court this week, Frank DiPascali, Madoff's former lieutenant and the government's star witness against the five former employees, recalled how Madoff called him into his office and then broke down in tears.
"Crying, he said: 'I'm at the end of my rope. I have no more money,'" DiPascali told jurors in federal court on Tuesday.
Read More: Madoff Wept as He Revealed Fraud, NY Witness Says
quicklist:title: He acted alone category: text:
In his testimony, DiPascali described how other staff allegedly made up information on statements for trades that didn't exist. Once, the staff put falsified documents into a refrigerator so an auditor wouldn't know they had just come from the printer, DiPascali said in court.
Last year, Madoff's brother, Peter, pled guilty to falsifying documents and lying to regulators in relation to the Ponzi dcheme. He is serving a 10-year prison sentence.
Read More: Bernie Madoff Family Book Profits Spark Outrage From Ponzi Scheme Victims
On Monday, a judge ruled that trustee Irving Picard, who is entrusted with seeking money for Madoff's victims, could not pursue "unjust enrichment" claims against the wives of Madoff's two sons, Mark and Andrew.
quicklist:title: Madoff's business was profitable category: text:
Though Bernard L. Madoff Investment Securities LLC claimed in Jan. 2008 that it had over $17 billion in assets under management, his trading desk may have lost tens of millions of dollars a year and was funded by his Ponzi scheme, says Bruce Dubinsky, a forensic accountant with Duff & Phelps LLC hired by the bankruptcy trustee, the Wall Street Journal reports.
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Within days of telling DiPascali that he had no money, Madoff sent out statements implying the money he managed had more than tripled since he began investing decades earlier, DiPascali testified.
quicklist:title: The value of his assets category: text:When he listed all of his assets after he was arrested, Madoff valued his securities business at $700 million, the Wall Street Journal reported. However, the bankruptcy trustee, Irving Picard, was only able to sell it in early 2009 for $25 million to Castor Pollux Securities LLC, which made an initial payment of about $1 million.
It was shut down two years later after only one more small payment, according to Picard, the Wall Street Journal reported.
quicklist:title: Giving remaining funds to friends and family category: text: In the government's original complaint against Madoff filed Dec. 11, 2008, after revealing the Ponzi scheme, Madoff allegedly told his sons the prior day that he intended "to distribute any remaining funds at BMIS to employees and certain investors in the investment advisor business, such as family and friends."
"Such a distribution will be unfair and inequitable to other investors and creditors of BMIS," the SEC complaint stated.
quicklist:title: Investors should have known better category: text:In an interview with Wall Street Journal's Marketwatch in May, Madoff said, "People asked me all the time, how did I do it. And I refused to tell them, and they still invested."
"Things have to make sense to you. You should ask good questions," Madoff said from prison.
quicklist:title: Madoff whistleblower was "a guy who was just jealous" category: text: Though a private citizen, Harry Markopolos, warned the SEC five times starting in May 2000 that Madoff may be a fraudster, Madoff has played down that he could have been caught had the SEC listened.
In an interview with David Kotz, former inspector general with the Securities and Exchange Commission, Madoff claimed from prison that Markopolos was "a guy who was just jealous."
"This guy is getting all this press, all this attention," Madoff says, according to Markopolos' book, "No One Would Listen: A True Financial Thriller." "He thinks he's some kind of seer. But believe me, it's all overblown. You know what? He's really a joke in the industry."
Madoff played down the possibility that regulators could have caught him earlier if they had listened to the warnings from Markopolos, saying he was "an idiot" who gave the SEC bad leads, Marketwatch reported.
quicklist:title: Madoff wanted to help customers recover their original investments category:text:
Madoff has claimed that he could offer assistance to help recover customers' money, a point the trustee has adamantly denied.
"As remorseful as I am for the pain and suffering I have shamefully caused, I take some comfort in the fact that my assistance will in fact accomplish what I have originally claimed, that with my assistance all of my customers will recover their original investment principal," Madoff wrote in an email in Feb. 2013 to CNBC.