Since 1991, Madoff and his wife have contributed about $240,000 to federal candidates, parties and committees, including $25,000 a year from 2005 through 2008 to the Democratic Senatorial Campaign Committee. The Committee has returned $100,000 of the Madoffs' contributions to Irving Picard, the bankruptcy trustee who oversees all claims. Senator Charles E. Schumer returned almost $30,000 received from Madoff and his relatives to the trustee, and Senator Christopher J. Dodd donated $1,500 to the Elie Wiesel Foundation for Humanity, a Madoff victim.
Concerns about Madoff's business surfaced as early as 1999, when financial analyst-whistleblower Harry Markopolos informed the U.S. Securities and Exchange Commission (SEC) that he believed it was legally and mathematically impossible to achieve the gains Madoff claimed to deliver. He was ignored by the Boston SEC in 2000 and 2001, as well as by Meaghan Cheung at the New York SEC in 2005 and 2007 when he presented further evidence. He has since published a book, No One Would Listen, about the frustrating efforts he and his team made over a ten-year period to alert the government, the industry, and the press about the Madoff fraud. Others also contended it was inconceivable that the growing volume of Madoff accounts could be competently and legitimately serviced by his documented accounting/auditing firm, a three-person firm with only one active accountant.
The Federal Bureau of Investigation complaint says that during the first week of December 2008, Madoff confided to a senior employee, identified by Bloomberg News as one of his sons, that he said he was struggling to meet $7 billion in redemptions. According to the sons, Madoff told Mark Madoff on Dec. 9 that he planned to pay out $173 million in bonuses two months early. Madoff said that “he had recently made profits through business operations, and that now was a good time to distribute it." Mark told Andrew Madoff, and the next morning they asked their father to explain how he could pay bonuses if he was having trouble paying clients. They went to Madoff's apartment, with Ruth Madoff nearby. Madoff told them he was “finished,” that he had “absolutely nothing” left, that his investment fund was “just one big lie” and “a giant Ponzi scheme.” According to their attorney, Madoff's sons then reported their father to federal authorities.
On December 11, he was arrested and charged with securities fraud(Sherwell, 2008). Madoff posted $10 million bail in December 2008 and remained under 24-hour monitoring and house arrest in his Upper East Side penthouse apartment until March 12, 2009, when Judge Denny Chin revoked his bail and remanded him to the Metropolitan Correctional Center. Chin claimed Madoff was a flight risk, because of his age, wealth, and the prospect of spending the rest of his life in prison. Prosecutors filed two asset forfeiture pleadings which include lists of valuable real and personal property as well as financial interests and entities. On June 26, 2009, Chin ordered Madoff to ...