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Bernie Madoff Dies In Federal Prison At Age 82

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Bernie Madoff, the financier who pleaded guilty to a scheme ripping off thousands of investors of more than $60 billion, has died in federal prison; CBS2's Alice Gainer reports.

Video Transcript

- Bernie Madoff, the financier who pleaded guilty to a scheme ripping off thousands of investors of more than $60 billion, has died in federal prison.

- He had been sick for some time with end stage renal disease and other chronic medical conditions. CBS 2's Alice Gainer live now outside the federal courthouse in Lower Manhattan with more. Alice.

ALICE GAINER: Last year, Bernie Madoff's lawyers tried to get him released from prison during the COVID-19 pandemic, but that request was denied. More than 15,000 claims have been filed against Madoff. About 70% of lost funds to investors has been paid back.

- Mr. Madoff, when are you going to say something to the victims?

ALICE GAINER: Bernard Madoff, the mastermind behind the biggest Ponzi scheme in history, died while serving his 150-year sentence in North Carolina. Madoff, a former chairman of the NASDAQ, wiped out the life savings of thousands of people, the investments of universities, charities, and celebrities.

MIRIAM SIEGMAN: 40 years of savings and all my pension, my entire IRA, nothing left, so I'm on food stamps.

FRED WILPON: That betrayal is very difficult for me because this was a man who, we were friends for 35 years and investors for 25 years.

ALICE GAINER: Before making his name on Wall Street, Madoff grew up in Queens, where he married his high school sweetheart, Ruth. He started his investment business with several thousand in savings and set up shop in the financial capital in the 1960s. For decades, his investment fund made no trades, allowing investors to redeem their accounts by drawing from the account of new investors. In 2008, the financial crisis triggered investors to make withdrawals. He couldn't keep up and told his family.

RUTH MADOFF: He said, I have a confession to make. I've been running a Ponzi scheme.

- My brother was trembling with rage.

ALICE GAINER: His two sons turned him in. In 2009, he pleaded guilty to securities fraud and other charges, admitting to forging client statements with fictional profits. A trustee was appointed to recover funds, sometimes by suing hedge funds and other large investors who came out ahead. So far, more than $13 billion of an estimated $17.5 billion that investors put into Madoff's business has been recovered. Attorney Robert Wallner represented the litigation trustee of two funds that invested with Madoff and went bankrupt.

ROBERT WALLNER: There were cascading bankruptcies because he could not repay people, many investors themselves went bankrupt. You think about all the victims he left behind, and frankly, that's what I thought about, not his demise.

ALICE GAINER: Half a dozen Madoff associates, including his brother, were also arrested. His one son, Mark, hanged himself on the second anniversary of his father's arrest. His other son died of cancer four years later. His wife cut him off. Bernie Madoff was 82 years old. Live outside of federal court in Lower Manhattan, Alice Gainer, CBS 2 News.

- Alice, thank you.