(Photos: AFP/Imagebank)

Louie Schwartz picked up the phone at his accounting firm and heard his wife’s voice on the other end of the line. “Louie,” she said, gasping. “Louie, Bernie’s been arrested.”

Bernie was Bernie Madoff, the Wall Street titan and longtime employer of Louie’s wife. Schwartz (name changed) instantly suspected that Madoff, who was known for his volatile temper, had been arrested for a bar fight or some similar altercation. But it soon became apparent that Madoff was in much bigger trouble.

“The things that were said about him in the days and weeks afterward were just incredible,” Louie says.

Ten years ago, on December 11, 2008, Bernard Madoff made history as the world’s most notorious financial criminal. The former chairman of the Nasdaq stock exchange and an investor with a long list of admirers was exposed as a huckster running the world’s largest Ponzi scheme. When the totality of his crooked dealings were uncovered, it was revealed that approximately 10,000 investors had lost $65 billion, among them Jewish novelist Elie Wiesel, whose entire life savings were wiped out, and Yeshiva University, which lost $100 million.
One war veteran who’d fought in Afghanistan was so broken by his losses that he took his life. Others were forced to recognize that their bulging nest eggs were a mirage. Storied institutions and national organizations went from boom to bust. In the words of investigative journalist Richard Behar, it was the “9/11 of the financial world.”
So how did one man fool the entire financial world into believing that he was running a sophisticated hedge fund when he was really just depositing and withdrawing money from a Chase banking account? It all started with lax oversight at the US Securities and Exchange Commission — and a willingness to believe.

“People Are Greedy”

The modus operandi of Bernard L. Madoff Investment Securities LLC was like any other on Wall Street — make money for your clients in both good and bad times. For many years, federal investigators agree, Madoff did just that.

Born April 29, 1938, in Queens to a struggling plumber father and a mother who dabbled in stocks, Bernard Lawrence Madoff’s first love was politics, earning a bachelor’s in political science at Hofstra University. His first job was as a college lifeguard.His ambitions, though, went considerably beyond surfing the waves and staring at the blue yonder. In 1960, using some work space provided by his father-in-law and $5,000 saved from guarding the beaches, he started investing in penny stocks for a steadily growing client list. Through thick and thin, boom and bust, while Wall Street might fizzle, Bernie’s clients always came out on top.

In good times that meant Madoff, who sat on the boards of State of Israel Bonds and Yeshiva University, was delivering a 20 percent return. In bad times, a “mere” 12 percent. Those eye-popping numbers attracted a growing clientele.

“People are greedy,” Madoff told Diana Henriques, author of The Wizard of Lies, during a jailhouse interview. “I told everyone, ‘don’t put more than half of your money with me — you don’t know, I could go crazy.’”