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On this day in New York · December 11, 2008

The FBI Knocks on Bernie Madoff's Door

One morning on the Upper East Side, the city's most trusted money manager ran out of new investors to pay off the old ones, and the largest Ponzi scheme in American history finally collapsed.

The facts

Date of arrest
December 11, 2008
Location
His penthouse at 133 East 64th Street, Upper East Side
Money involved
About $65 billion missing from client accounts, including fabricated gains
Sentence
150 years in federal prison, handed down June 29, 2009

On December 11, 2008, FBI agents arrived at Bernard Madoff's penthouse at 133 East 64th Street on the Upper East Side and arrested him for securities fraud. Madoff had run his investment advisory business as a Ponzi scheme for years, paying returns to existing clients with money from new ones rather than actual trading profits. The scheme unraveled in the 2008 financial crash, when a wave of client withdrawal requests left him unable to cover the payouts. The day before his arrest, he told his sons Mark and Andrew, who worked at his firm, that the whole business was "just one big lie." They contacted a lawyer that night, federal authorities were notified, and agents were at his door within hours.

In their words

The day in the words of the people who were there. Every quote is verbatim, and every source links out so you can check it.

  1. just one big lie

    Bernard Madoff, telling his sons Mark and Andrew the night before his arrest

    Source: Wikipedia

  2. a giant Ponzi scheme

    From the criminal complaint's account of what Madoff told his sons about his business

    Source: Wikipedia

Why it still matters

It remains the largest Ponzi scheme in American history, and it exposed how easily one Wall Street name could rope in banks, charities, and retirees for decades while regulators looked the other way.

Sources

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