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Madoff - Wall Street baron behind massive con trick

30 Jun 2009 6:30 AM

NEW YORK, June 29 AFP - In a city famous for money and theatre, Wall Street doyen Bernard Madoff was a master of both, using his charm to wheedle billions from his clients who little suspected he was a master con artist.

With little more than his wit and the implicit trust of his elite followers culled mainly from the Jewish community, the silver-haired money manager pulled off a fraud of gargantuan proportions, tricking thousands of savvy investors.

Now the 71-year-old is set to spend the rest of his life in prison, sentenced on Monday to the maximum of 150 years in jail on 11 charges of fraud and theft.

In a bid to mitigate the sentence, Madoff on Monday had turned and for the first time directly faced his victims in the courtroom and said simply "I am sorry".

"I can't offer you an excuse for my behaviour. There is no excuse for that. And I don't ask for forgiveness," he said.

He told judge Denny Chin that he knew he had "made a terrible mistake. I made an error of judgment but I couldn't accept the fact that for once in my life I failed".

"I live in a tormented state now knowing of all the suffering I have created. That's something I'll live with for the rest of my life."

But Chin hit back that he believes Madoff is still hiding secrets from investigators seeking to return funds to his victims. And he revealed not a single family member or friend had written to the court in Madoff's support.

"The absence of such support is telling," Chin said.

Now faced with spending the rest of his life behind bars, Madoff will have time to reflect on the ignominious downfall for the man who once bathed in success as he climbed from lowly beginnings to the top of the Wall Street tree.

The man friends once knew as Bernie started as a Long Island lifeguard before entering the stock market, eventually becoming chairman of the Nasdaq stock exchange.

There, he was credited with helping revolutionise the shift in trading from face-to-face deals, from telephones to computers, with trades made in seconds not minutes, and ushering in an era of ever greater stakes and profits.

But it was as a private money manager that he won a reputation as a financial guru.

Returns of around 10 per cent, with occasional surges a great deal higher, came in so regularly that rich individuals, endowments, and supposedly expert banks lined up to give him money.

When a handful of alarmed journalists and investigators raised concerns, they were ignored.

Madoff himself had several luxury homes, a Manhattan apartment, yachts and a private airplane, but this was to be expected for a big shot on Wall Street -- anything less might have been suspicious.

And he lived in the lap of luxury. Newspapers have been raiding their archives for pictures of the flamboyant lifestyle he led with his wife, Ruth.

There have been photos of him puffing on a cigar, baseball cap on his head, or lounging on one of the couple's yachts Bull, Little Bull and Sitting Bull.

And the list of investors was Madoff's best advertisement: if so many VIPs were on it, what could there be to fear?

Behind this shiny surface, prosecutors say there was little more than a shell game, a Ponzi scheme where new clients' capital was stolen to pay off existing clients and create the illusion of returns.

Prosecutors have detailed how even the Manhattan offices were phony, with unqualified workers churning out fake statements and other paperwork.

Just two weeks before Madoff's arrest, his company claimed to be managing $US64.8 billion ($A80.34 billion), when in reality, the prosecution said, there was only "a small fraction of that".

A columnist for The Wall Street Journal says Madoff lured his victims with a "mysterious allure and sense of exclusivity".

Initially Madoff would rely on a "macher", the Yiddish term for a big shot, who would go to the country club and "brag, 'I've got my money invested with Madoff and he's doing really well'," the Journal wrote.

"When his listener expressed interest, the macher would reply, 'You can't get in unless you're invited ... but I can probably get you in'."