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With a single, simple sentence, Bernie Madoff's shining reputation as a pillar of the Wall Street community collapsed. "It's all just one big lie," he told his family, admitting that his investment management business was corrupt, according to a complaint drawn up by the FBI.
Born in the New York borough of Queens, Madoff, 70, started his firm in 1960 with savings from jobs as a Long Island lifeguard and an installer of garden sprinklers.
He seemed the ultimate safe pair of hands: in the 13 years to 2007, records suggest he had just five "down" months. Many of his clients were fellow members of well-to-do golf clubs or contacts on the Jewish social scene. He adopted a softly-softly approach, urging investors to put in only small sums to begin with, until they felt comfortable with his methods.
Madoff Securities is a family concern. Madoff's sons, Mark and Andrew, work for the company alongside his brother, Peter, and a nephew and niece. It was best known as a leading market maker, and the firm's fund management was long viewed as a sideline.
Clients describe Madoff as pleasant and easygoing. He was chairman of the technology-focused Nasdaq exchange and is a prominent benefactor to Jewish charities. His investors include New York's private Yeshiva University, the New York Mets owner Fred Wilpon, the New Jersey senator Frank Lautenberg and Long Island's Jewish Health System.Madoff dazzled his followers with statements which, although impressive, were hard to comprehend. There had been whispers that Madoff was illegally "front running" - using knowledge of future activity by his brokerage clients to make money for investors. But few suspected the true depth of his fraud.
Alarm bells began to sound as Madoff's returns proved almost impossibly consistent through this year's market turmoil. He was arrested last week, reportedly wearing a pale blue bathrobe and slippers, at his $9m apartment on New York's Upper East Side.
Madoff's exposure has caused amazement in America's business establishment. "I was surprised," the property tycoon Donald Trump told the Sun Sentinel. "He was a pretty respected guy, but he turned out to be a whack job."
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