Justice may have had the last laugh but for a long time the joke was on Bernard Madoff’s investors.
When his crimes first came to light there was disbelief on Wall Street and shock and anger among customers who had lost fortunes. Despite Madoff’s reputation for financial genius there was little ingenuity in his rip-off scheme. He simply pocketed money that initial clients invested in him and repaid them with funds received from subsequent traders. The “Ponzi” scheme – named after a fraudster from an earlier era – was bound to collapse. But while it was paying off no-one complained. When it finally did come crashing down, the impact was felt across the world. The more than 1,300 customer accounts included modest investors and the rich and famous, vast corporate clients and individuals saving for their pension funds. While some suffered heavy losses to their personal finances, others lost everything they had worked for. “They refer to them as the golden years, when you retire and you try and enjoy life, and you get wiped out in 48 hours,” said one victim facing a tougher retirement. As it stands Madoff’s victims are known to have lost a total of the equivalent 9.2 billion dollars. Around 850 million has been returned to some of the victims. But it is estimated the final figure for the amounts stolen could be as high 46 billion euros. The Madoff affair sent shockwaves across the financial world at a time when it was already shaken to its core by the global financial crisis. Wall street will recover, but many of Madoff’s victims may not.