Bernie Madoff's last surviving son Andrew dies at 48

Insisted he had nothing to do with his father's massive Ponzi scheme

Sep 3, 2014 @ 4:49 pm

By Bloomberg News

madoff, ponzi
+ Zoom
Bernie Madoff

Andrew Madoff, convicted conman Bernard Madoff's last surviving son, who insisted he had nothing to do with his father's massive Ponzi scheme, has died. He was 48.

He died Wednesday at Memorial Sloan Kettering Cancer Center in New York after battling mantle cell lymphoma, his attorney, Martin Flumenbaum, said in an e-mailed statement.

As heads of the trading desk at Bernard L. Madoff Investment Securities LLC, Mr. Madoff and his brother, Mark, led the market-making business of the once-respected firm while their father, based on another floor, invested client money.

The firm's clients invested $17.5 billion in principal and were led to believe, through falsified statements and trade confirmations, that they had a total of $64.8 billion in their accounts. Irving Picard, the trustee appointed to collect money for the victims of the fraud, had recovered $9.8 billion as of July to partially reimburse clients who lost money.

(See also: Madoff aides convicted in Ponzi trial)

On Dec. 10, 2008, the brothers contacted the Federal Bureau of Investigation to expose their father's long-running fraud.

The brothers called the FBI, they said, only hours after first learning of the fraud from their father, who confessed to them because his investment-management business was being inundated with redemption orders he could not fulfill.

Though sued for millions of dollars, the brothers were never charged with complicity in the fraud, or with any other criminal wrongdoing.

PUBLIC SUSPICIONS

Even so, neither they nor their mother, Ruth, ever fully shed public suspicions that they had been involved in a scheme that had enriched their family for decades.

“Did the Sons Know?” Vanity Fair magazine asked in the headline for a 2009 article.

Even their call to the FBI was seen by some skeptics as “something the Madoffs set up” to get the sons “off the hook,” reporter Morley Safer told Andrew Madoff in a 2011 interview on CBS's “60 Minutes.”

“I wish it were” a setup, Mr. Madoff replied to Mr. Safer. “I wish none of this was real. You know, I knew absolutely nothing about this before my father shared the information with us. And it was the most shocking and terrible moment of my life.”

For Andrew Madoff, life would never be the same.

His father was sentenced to 150 years in prison. His mother said she and Bernard tried to kill themselves by prescription-drug overdose two weeks after his arrest.

BROTHER'S SUICIDE

Mark Madoff took his own life on Dec. 11, 2010, the second anniversary of his father's arrest; he was found hanging from a dog leash attached to a pipe in the living room of his Manhattan apartment.

And Andrew Madoff, in April 2013, disclosed the recurrence of his mantle cell lymphoma, a form of cancer for which he had been treated in 2003. He underwent a stem-cell transplant in May 2013, following chemotherapy and radiation.

“One way to think of this,” People magazine quoted him saying, “is the scandal and everything that happened killed my brother very quickly, and it's killing me slowly.”

Mr. Picard sought $73.8 million in repayment from Andrew Madoff, part of $255.3 million he targeted from Madoff family members who, he said, used money from the firm to “fund personal business ventures and personal expenses such as homes, cars and boats.”

Andrew Howard Madoff was born on April 8, 1966, and raised in the New York suburb of Roslyn, on Long Island. He was the better student, and his older brother was the better athlete, according to Laurie Sandell's “Truth and Consequences: Life Inside the Madoff Family” (2011), written with Andrew Madoff's approval and participation.

DOCK BOYS

During summers, both brothers worked as dock boys at what became the Montauk Yacht Club. They started a boat-washing business. Then they began working as summer interns for their father's firm.

Andrew Madoff majored in finance in the undergraduate business program at University of Pennsylvania's Wharton School, graduating in 1988. Following a month backpacking around Europe, he began working for his dad on Aug. 1, 1988. His brother, too, had gone to work for their father upon graduating from the University of Michigan two years earlier.

The brothers supervised the stock-trading desks on the 18th and 19th floors of the so-called Lipstick Building on Third Avenue in Manhattan. Andrew Madoff, as head of equities, built the firm's proprietary-trading desk; Mark Madoff was head of sales. Down on the 17th floor, their father ran the investment-management business that seemed to produce consistently stellar returns, before it was exposed as a sham.

In hindsight, Andrew Madoff told Ms. Sandell for her book, it became evident that his father had used the market-making bustle of the 18th and 19th floors “as a shield” against any suspicion among those who entrusted their money to him.

“He would parade clients through the legitimate trading operation, then sit down with them in a conference room for an hour,” Andrew Madoff said of his father.

“The fact that they could physically see us in the trading room, working, might have lent to the air of legitimacy,” he said.

The brothers took home $3 million each in their peak earning years, Ms. Sandell wrote. His father also helped Andrew Madoff buy an apartment in New York City and a summer home in Old Greenwich, Conn.

In 1992, Andrew Madoff married the former Debbie West, whom he had met through his brother's wife. They had two daughters, Anne and Emily.

CANCER RESEARCH

His initial bout with cancer in 2003 inspired Mr. Madoff to give time and money to medical research. He joined the board of the Lymphoma Research Foundation, rising to chairman in 2008, and started an initiative that targeted his particular type of lymphoma.

After his cancer went into remission, he spread his wings beyond the father's firm. He became the largest investor in Urban Angler, a fly-fishing store on Manhattan's Fifth Avenue, and took the lead in creating Madoff Energy, an oil- and gas-exploration business formed with his brother and their cousin, Shana Madoff Swanson.

In September 2008, separated from his first wife, he became engaged to Catherine Hooper, an owner of Urban Angler and mother of a 3-year-old daughter, Sophie. He went to work with Ms. Hooper on the company she founded, Black Umbrella, which customizes emergency safety plans for families and individuals.

With Ms. Hooper and his mother, Mr. Madoff worked with author Sandell on the book that presented their story, and granted interviews to “60 Minutes,” NBC's “Today Show” and other programs to emphasize their innocence, outrage and sorrow.

“What he did to me, my brother and my family is unforgivable,” Andrew Madoff said in the “60 Minutes” interview. “What he did to thousands of other people -- destroyed their lives -- I'll never understand, and I'll never forgive him for it. And I'll never speak to him again.”

He told People magazine in 2013 that his feelings toward his father hadn't changed.

“Even on my deathbed,” he said, “I will never forgive him for what he did.”

Must Watch

Featured Video

Grow Your Top Line

Sponsored by Commonwealth Financial Network

Upcoming Event

Oct 09

Webcast

Beyond Benchmarks: The New Rules of Fixed Income

Are yesterday's investment strategies adequate for today's complex bond markets? Many advisers recognize the limitations of traditional benchmarks and are turning to more flexible, unconstrained approaches to help clients seek return - both now, and ... Learn more

Accepted by the CFP Board for 1 CE credit and by IMCA for 1 CIMA®/CIMC®/CPWA® CE credit.

Get Daily News & Intel

Breaking news and in-depth coverage of essential topics delivered straight to your inbox.

X

Subscribe and SAVE over 72%

View our best offer
Subscribe to Print