Risk register · entry
Q-F · FraudMadoff
The steadiest returns in history. None of the trades ever happened.
The fifth quadrant, where the thing was never real. The tell is that the story is too clean.
Why this quadrant
Ten to twelve percent a year, in every market, for two decades. Returns that flat cannot come from a market that is not. The steadiness was the evidence, and it was read as the reassurance. There were no trades to lose money on, so the loss was not a drawdown but the whole balance, arriving the week redemptions outran new money.
The record
- Roughly $65 billion in fictitious client account value reported as of November 2008certain
- About 4,800 client accountscertain
- Madoff arrested December 11, 2008, one day after confessing to his sonscertain
- Pleaded guilty to 11 felony counts, sentenced to 150 years in March/June 2009certain
- Markopolos first warned the SEC in 2000, then again in 2001 and with a 21-page, 29-red-flag memo in November 2005certain
- Trustee Irving Picard has recovered or reached agreements for roughly $14.8 to 15.3 billion as of late 2025/early 2026likely
- Picower estate forfeiture of $7.2 billion in December 2010, called the largest single forfeiture in US judicial historycertain
- JPMorgan Chase settlement of $2.05 billion in January 2014certain
- Estimated actual principal losses (money in minus money out) of roughly $17 to 20 billion, distinct from the $65 billion in fictitious statement valuelikely
Sources
The newsletter
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