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Where are the clients’ yachts?

The world’s best con man, Bernie Madoff, died last week in a North Carolina prison, where he was 11 years into his 150-year sentence for bilking thousands of investors out of $65 billion in the most devastating Ponzi scheme in history.

In February of 2020, he asked for early release because he was in the final stages of kidney disease and was in palliative care. “I’m terminally ill,” he wrote the judge. But Denny Chin was having none of it, saying “it was fully my intent” that Madoff die in prison, and so he did.

Because con men will always be with us, it’s useful to learn just how good Madoff was at bilking even the most sophisticated investors out of their money. As Diana Henriques, the New York Times reporter who uncovered the whole mess, said: “Telling lies is very easy. Telling lies without getting caught, without raising a whiff of suspicion…Telling lies that inspire trust and belief in everyone who hears them, well, that is very very difficult, and that is what every successful con man must be able to do.”

But Madoff (yes, pronounced “made off”) wasn’t just successful. He succeeded for close to 20 years, and he fleeced everyone from his wife and two sons, one of whom took his life, to Steven Spielberg and Eli Weisel, to packs of hedge fund managers whose association with Madoff made them appear “prone to the lowest forms of witless foolishness, instead of being staffed by brilliantly intuitive experts.”

Madoff also swatted aside frequent probes by the SEC which began in 1992 and ended with this post-mortem report one year after 2008 when he confessed his fraud to his sons, and a day later was under arrest: “The examination teams discovered suspicious information and evidence and caught Madoff in contradictions and inconsistencies. However, they either disregarded these concerns or simply asked Madoff about them. Even when Madoff’s answers were seemingly implausible, the SEC examiners accepted them at face value.”

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