Bernie Madoff, the king of Ponzi schemes who defrauded investors of billions, won’t be getting out of jail any time soon.
Madoff, who is now 82 years old, requested that he be allowed to leave federal prison in order to die at home. He is suffering from kidney failure and reportedly has about 18 months to live.
The First Step Act allows elderly prisons to apply for “compassionate release” if they are in failing health and pose no further threat to society.
Judge Denny Chin denied Madoff’s request, however. He originally sentenced Madoff to 150 years in prison, and he believes that the fraudster should remain behind bars.
“When I sentenced Mr Madoff in 2009, it was fully my intent that he live out the rest of his life in prison,” Chin wrote. “Nothing has happened in the 11 years since to change my thinking.”
Apparently, Madoff’s lawyer is hoping to go over Judge Chin’s head. Brandon Sample plans to ask Donald Trump to commute Madoff’s sentence in a last-ditch effort to get his client released.
The issue is further complicated by the coronavirus pandemic. Many prisoners are asking for early release or home imprisonment, especially those at the crowded Rikers Island complex. Other high-profile names joining Madoff are convicted rapist Harvey Weinstein and Trump’s former lawyer Michael Cohen.
500 of Madoff’s victims wrote to the judge to oppose his early release. He defrauded famous people (including Stephen Spielberg,Kevin Bacon, and Kyra Sedgewick) along with individuals, charities, and hedge funds. It’s estimated that he stole up to $65 billion over 20 years before finally getting caught.
Ponzi schemes operate on a deceptively simple principle. The scammer at the head of the operation offers unusually high returns on investment. In Madoff’s case, he positioned himself as a stockbroker who promised returns of up to 20%.
It helped that Madoff had served as the chairman of NASDAQ for several years in the early 90s. That patina of legitimacy, along with the lure of easy money, kept investors flocking to him for decades.
Ponzi schemes only survive as long as new investors keep coming. Anyone further up the pyramid who wants to withdraw their funds is paid out from the money invested by people downline. Meanwhile, the man at the top of the pyramid continues to rake in cash without actually investing anything for his clients.
Madoff specifically targeted charities, which are less likely to make unexpected withdrawals from their investment funds. This helped keep Madoff afloat for longer than most Ponzi schemes.