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00:00on the morning of june twenty ninth two thousand nine journalists from all over the world gathered inside the federal
00:08court in new york
00:09to hear the verdict that will be pronounced against bernard madoff known as the king of wall street and the
00:16genius in financial investment who shocked everyone and executed the largest financial fraud in history
00:24embezzling more than sixty five billion dollars approximately sixty billion euros he took it from his victims pockets cleverly and
00:35without violence to become the greatest swindler of all time
00:40but the pressing question is how did this man whom everyone considered a financial genius descend to this level
00:50how was he able for forty years to deceive thousands of major investors and banks and manipulate all financial regulatory
01:00bodies around the world
01:01the events of our thrilling story begin in the year 2008 the year the world was shaken by the great
01:09stock market crash
01:10during that period bernard madoff was regarded as one of the pillars of finance on wall street the beating heart
01:16of the new york stock exchange
01:18the strongest and most dangerous financial center in the world amid these difficult economic conditions
01:23madoff's star shone among everyone by offering secure investment deals in exchange for unprecedentedly attractive large annual profits
01:34through these legendary offers presented by bernard he caused his competitors to fall one after the other until he dominated
01:42the scene powerfully and crushed everyone mercilessly
01:46depositing your money with madoff was not just an ordinary investment it was like signing a direct contract with wealth
01:53and a promise of achieving enormous financial gains that seemed guaranteed
01:58as for his clients they came from all walks of life ordinary individuals charitable organizations and many banks even wealth
02:07managers like the frenchman
02:08thierry de la ville houche among his clients we also find some celebrities like steven spielberg and john malkovich
02:16all these people placed their trust in him without hesitation blind trust and it did not occur to them that
02:23most of the money they handed over to him might be lost and they would never be able to recover
02:28it
02:29before i explain to you how bernard madoff stole billions first i must tell you where he came from and
02:36understand his beginnings and professional ambitions until he earned the title of king of wall street
02:42he was born in 1938 in the united states in a neighborhood in new york called queens to a wealthy
02:49jewish family
02:50with a father named ralph madoff who worked as a stockbroker and a mother named sylvia munter bernard madoff received
02:59his education at a prestigious school
03:01obtaining his baccalaureate from rockaway high school in 1956 then earned a master's degree in political science in 1960
03:11he grew up in a family working in finance as his parents ralph and sylvia had founded a company called
03:21gibraltar securities the idea seemed beautiful on the surface but the reality was completely different
03:29their activities were always on the edge of the law with unpaid bills endless tax adjustments and suspicions surrounding shell
03:38companies
03:39over time their business became so mired in fraud that it caught the attention of regulatory authorities in the early
03:461960s
03:47afterwards the regulatory bodies moved towards the couple and opened an investigation with them
03:54fortunately they managed to escape miraculously as the mother quickly dissolved the company at the last moment in an emergency
04:03allowing them to evade punishment
04:06at that time bernard madoff was twenty years old witnessing the downfall and setback of his parents
04:12but this did not prevent him from following their path
04:15instead he decided to take the same route with an amount not exceeding five thousand dollars in his pocket
04:22he founded his own investment company and began trading in unlisted stocks
04:28he was a smart young man with a unique talent that quickly earned him a good reputation on wall street
04:33as a successful market maker
04:36and a market maker is simply the intermediary who buys and sells stocks on behalf of companies
04:42and this activity is legally legitimate
04:46but madoff knew that this work would not make him a millionaire
04:50and achieve the wealth he dreams of
04:54he must break into the world's financial stronghold
04:58the new york stock exchange
05:00to achieve this goal
05:01madoff devised a brilliant plan
05:03first he relied on his good reputation
05:06and succeeded in recruiting about twenty clients
05:09promising them profitable and enticing investments in the stock market
05:13the dangerous part is that he did not conduct these operations through his official company
05:19but secretly
05:20even his clients did not know that
05:23they were certain they were investing their money in high risk stocks
05:28hoping for large and quick profits
05:31but they were unaware that the reality was harsher than they imagined
05:36because a slight market shake could make them lose all their money in the blink of an eye
05:43indeed just a few days after he began his investment
05:46what everyone feared happened
05:48a small crisis erupted in the stock market
05:52and madoff lost all the money he invested about thirty thousand dollars
05:57despite the harshness of the loss
05:58madoff decided to cover it up
06:01because if people found out
06:02his career on wall street would be over forever
06:05but the ambitious young man did not give up
06:07instead he cleverly turned the tables using his sleight of hand skills
06:11he approached his accountant friend and asked for a secret loan
06:15his friend agreed and handed him the money
06:17thanks to this financial support
06:19he was able to return the funds to his clients in full
06:22getting out of the predicament as if nothing had happened
06:25in this way
06:26madoff appeared to his clients and other customers
06:29as the smart man who survived the stock market crash with his brilliant skills
06:35thus his image began to form as a brilliant strategic expert in the stock market
06:40in the early 1970s
06:43his name became so prominent
06:44that he was asked to contribute to the founding of NASDAQ
06:48the first 100% electronic stock exchange
06:51which quickly attracted many technology companies
06:54through it
06:55the NASDAQ index recorded an unprecedented huge success
07:00and madoff's brilliance did not stop there
07:03between 1990 and 1993
07:06he took over the presidency of NASDAQ itself
07:09solidifying his status as a legend in the financial world
07:13but what was firmly established in everyone's minds
07:17was that bernard madoff was an even more exceptional legend
07:21due to the stock market crash of 1987
07:26one of the worst crashes in modern history
07:28known as black monday on the 19th of october
07:32when panic swept through the new york stock exchange
07:35causing the indices to fall by more than 22% in a single day
07:40a catastrophic scene the world had not seen since the crisis of 1929
07:45to limit the collapse
07:47all traders in the market stopped buying stocks
07:50everyone stopped
07:52except for one man
07:54bernard madoff
07:55despite the ongoing panic in the market
07:58madoff continued purchasing securities
08:01defying all difficulties as if it were normal
08:04nothing happened
08:05a risky move
08:07but it made the market more resilient
08:09and helped calm the wave of panic
08:12the result was astonishing
08:14instead of the crisis destroying his company
08:17it made him appear as the most stable
08:19and reliable financier on wall street
08:22since then he was dubbed
08:24the king of the new york stock exchange
08:27after that he used his position
08:29to revive his secret activity
08:31as an investment advisor
08:32his clients give him their money
08:34and he promises guaranteed profits
08:37nevertheless
08:38he did not forget his failure in the year 1962
08:41but learned a harsh lesson from it
08:44this time he decided to go further than before
08:47offering his clients investments that are 100% safe
08:51with incredible returns of up to 15% annually
08:54if you ask any financial expert about these profits
08:58they will tell you that it is impossible to achieve
09:01as annual interest rates rarely exceed 4 or 5%
09:06but the clients never doubted and did not ask any questions
09:10because they were dealing with bernard madoff
09:13the genius of wall street
09:14their money was in safe hands
09:17however the hidden truth from the clients
09:20is that bernard did not invest their money in the stock market
09:23as they thought
09:24instead he was putting those millions into his personal account
09:29thus began the largest fraud in history
09:33and everyone might wonder how he can pay the 15% annual returns
09:37he promised the clients
09:38the answer lies in an old fraudulent scheme known as a ponzi scheme
09:45this idea is very simple
09:47the capital brought in by new clients is used to pay fake profits to the old investors
09:53for example when a client deposits 10,000 euros with madoff
10:00expecting an annual interest of 15%
10:03these profits do not come from a real investment
10:07but from the money obtained from new clients
10:11bernard madoff did not invent this scheme
10:14it was made famous by an italian swindler named charles ponzi
10:18from whom the name ponzi scheme originated
10:20however the problem is that this system is inherently fragile
10:24and always ends in catastrophic collapse in two cases
10:28first when the number of people demanding to withdraw their money exceeds the scammer's ability to pay
10:34second when the influx of new investors slows down
10:39and the funds are no longer sufficient to cover the rewards for the old clients
10:43therefore madoff had to continuously attract new clients to ensure the survival of this scheme
10:50to gain more trust from his victims he resorted to a cunning tactic
10:55making them believe they were carefully selected
10:57and that entry into his exclusive investment club was not available to everyone
11:03he deliberately rejected many requests from all over the world
11:07which increased the desire of the wealthy to join him
11:10believing their money was in the hands of a rare genius
11:14opening an account with bernard was not easy
11:17it required showing your credentials and committing to complete secrecy
11:21it was also required that every new client not mention madoff's name in transactions
11:27these conditions were part of his charm to attract clients
11:30in addition to his good reputation and gentle manner in dealing with people
11:35he also cared about his personal appearance
11:38always wearing elegant clothes and ensuring he smelled pleasant
11:44bernard was smart in dealing with his clients
11:47he never forgets on every occasion to send them a small envelope
11:51congratulating them on a birthday or a wedding
11:53and when an employee dies in an accident
11:56he opens an account to provide education for their children
12:00in addition he was publicly generous
12:02making large donations to charities
12:05all to improve his image in front of people and authorities
12:08and leave a warm impression on them
12:10but behind the scenes he had a precise and tight system
12:15he had a secret office located on the upper floor beneath his company's official offices
12:19he formed a two-person team to produce fake documents and records
12:24they create fake activity logs forged invoices and reports designed to convince any skeptic
12:31no one was aware of this dark side
12:34neither his company employees nor his family members
12:38including his brother peter his wife and his sons mark and andy
12:43in the early twenty-first century rumors began to spread about his mysterious wealth
12:49one day the securities and exchange commission received a shocking and fierce report
12:55submitted by financial analyst harry markopoulos
12:58supported by strong evidence clearly indicating that madoff was running a ponzi scheme worth billions of dollars
13:05the report was convincing and harsh
13:08but the strange thing is that it was not enough to open an immediate investigation
13:13because madoff had many friends within the commission
13:15he had previously provided its members with important services in the past
13:21such as helping them pursue fraudsters who were active in the markets before
13:25which gave bernard a wide margin of safety
13:29despite the availability of evidence and growing concerns
13:33everything was left without serious follow up
13:36and madoff continued his activities as if everything was normal
13:40then harry became angry that his warnings were not taken seriously
13:44so he turned to the media which forced the authorities to take action and conduct some examinations
13:51as for madoff he had nothing to worry about
13:54as the investigation did not go beyond a simple phone call
13:57in which he was asked if he had a secret investment fund
14:00his answer was of course no
14:03nevertheless articles were published in newspapers alerting many clients
14:07and urging them to verify the dates of their investment portfolios
14:11but bernard was ready to face that
14:13so with the help of two of his secret employees
14:16they created a fake digital site containing fictitious transactions to justify the movement of money
14:22they also created fabricated balances to hide the deficit
14:26even fake account books
14:29to make them look authentic
14:31he resorted to a strange trick
14:33kneading the papers and then placing them in the refrigerator
14:36to give them an old appearance
14:38with these measures madoff once again escaped punishment
14:41at the beginning of the first decade of the twenty-first century
14:45he had a personal fortune estimated at more than one billion and twenty-three million dollars
14:51he also owns many luxury properties in New York, Miami, and several other cities in the United States
14:58in addition to a stunning villa in the city of Antibes on the French Riviera
15:03he also owns ten million dollars worth of furniture and artwork
15:08a yacht valued at seven million dollars and three million dollars in jewelry and other valuable items
15:16the situation remained as it was until the year two thousand and eight
15:21when the markets were hit by an unprecedented crisis
15:24the sub-prime mortgage crisis that would hasten the fall of the king of wall street
15:30its spark began in 2007
15:33when low-income American families found themselves unable to repay their mortgage debts
15:40granted to them to purchase their homes
15:42as interest rates rose significantly
15:45leading to a wave of payment delays and a drop in property prices
15:51banks began facing significant difficulties in finding liquidity
15:55by the year 2008 the New York Stock Exchange experienced a sharp decline
16:01leading to a global financial collapse
16:03a state of panic prevailed among savers who rushed to financial institutions
16:10eager to retrieve their money invested in the stock market
16:14among these investors were thousands of Bernard Madoff's clients
16:19who hurried to withdraw their investments
16:22but the bitter truth is that Bernard did not invest anything in the stock market at all
16:29in December 2008
16:31he faced significant pressure
16:33and was asked to pay seven billion dollars
16:36but he was unable to do so because his bank balance did not exceed nine hundred million dollars
16:42the Ponzi scheme that Madoff built over many years
16:46collapsed in just a few days
16:49on the 11th of December 2008
16:51due to the immense pressure he was under
16:55Madoff gathered his family and decided to tell them everything
17:00the next day his sons informed the Federal Bureau of Investigation
17:05and Bernard was arrested and immediately placed in prison
17:09after the news of his arrest spread thousands of investors found themselves facing a devastating reality
17:16among the biggest victims was the French billionaire Thierry de la Viloucher
17:20who was defrauded by Madoff for an amount of one billion four hundred million dollars
17:25he not only lost his personal fortune but also the millions entrusted to him by his clients
17:31among the victims we also find Lilian Betancourt
17:34the richest woman in the world
17:36who was driven to a tragic end by debts and scandals
17:40the total losses were estimated at about 65 billion dollars
17:44his list of victims included the largest global banks
17:48financial institutions and charitable funds
17:51for example in the United States
17:54among his victims was the asset management company Bear Stearns
17:58which invested approximately one billion four hundred million dollars
18:02as for the American hedge fund
18:05it lost a huge amount of seven billion five hundred million dollars
18:10as for the company Drome Group Holdings
18:13it invested three billion three hundred million dollars
18:17the Royal Ascot Companies Fund also incurred losses amounting to one billion eight hundred million dollars
18:25among these frauds that occurred in Spain
18:28Banco Santander invested an amount estimated at two billion three hundred thirty three million euros
18:36and Bancomer lost about three hundred million euros
18:40as for the private Austrian bank
18:42it invested nearly two billion one hundred million dollars
18:46in the United Kingdom
18:48HSBC Bank incurred losses amounting to one billion dollars
18:52as for the Bank of Scotland
18:54it lost an amount estimated at four hundred million pounds sterling
18:59in Switzerland
19:00the Union of Private Banks
19:02UBP lost an amount of one billion dollars
19:05while Swiss Life Bank lost about 90 million Swiss francs
19:09in Luxembourg
19:10the AIM Group Company incurred losses estimated at two hundred thirty million dollars
19:16in Italy
19:17Unicredit Bank lost an amount estimated at 75 million euros
19:23additionally
19:24there were many banks and financial institutions
19:27that invested their money with Madoff in complete secrecy
19:31people not only lost their money
19:34but some lost their lives tragically
19:36like the French billionaire Thierry de Laville Ocher
19:39who lost his money and his friends money
19:42and could not bear what happened
19:44so he was found dead by suicide in his office
19:47on the morning of Tuesday
19:49the 23rd of December 2008
19:52as for the Madoff family
19:54they experienced a real collapse
19:56and quickly descended into the hell created by their father
20:01Mark, the eldest son
20:03could not bear the shame his father brought upon the family
20:07on the 11th of December 2010
20:09he committed suicide by hanging in his apartment
20:13after some friends accused him of colluding with his father
20:17to steal people's money
20:19on the 3rd of September 2014
20:21Andrew Madoff
20:23the younger son of Bernard
20:25died of brain cancer
20:27due to psychological pressures
20:28he could not bear
20:30when Bernard Madoff appeared in court
20:33he was sentenced to 150 years in prison
20:37in the state of North Carolina
20:39he spent the rest of his life
20:42and passed away on the 14th of April 2021
20:47at the age of 82 while serving his sentence
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