| A Ponzi scheme is a fraud that pays returns to its investors from their own money or the money paid by subsequent new investors, rather than from any actual profit. |
It is named after Charles Ponzi, who applied the concept to the arbitrage of International Reply Coupons in the early 1920s. Ponzi promised a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States.
|By June 1920, people had invested $2.5 million in Ponzi's scheme. By July, he was raking in a million dollars per week and rising. By the end of July, he was approaching a million dollars per day.|
Ponzi's scheme eventually brought down six banks. His investors received less than 30 cents on the dollar. Investors lost about 20 million in 1920 dollars (244 million in 2017 dollars). Charles Ponzi set the template for Bernie Madoff's scheme that collapsed in 2008 ... the largest Ponzi scheme in history.
|In late 2010, two years after he was first arrested for an $ 18 billion Ponzi scheme, Madoff possessions hit the auction market.|
Thousands of belongings from his New York City penthouse, including his used shoes, went on the auction block.
Bernard Madoff owned about 250 pairs of shoes.
|Madoff's mini fleet of boats were auction stars. A restored 55-foot Rybovich yacht named Bull fetched $700,000. Madoff's former 38-foot Shelter Island sport runabout, named Sitting Bull, went for $320,000. And the 24-foot Maverick center console he dubbed Little Bull got a winning bid of $21,000.|
A black 1999 Mercedes-Benz CLK 320 convertible that belonged to Madoff's wife, Ruth, went for $30,000.
|Madoff's 4,000-square-foot duplex Manhattan penthouse sold for $8m, and a 8,750-square-foot home in Palm Beach $7.4m. Madoff's Montauk beach home sold for $9.4m|
|Morrell Wine Auctions auctioned off 262 bottles of wine and liquor that had been seized by federal authorities from Madoff's mansion in Palm Beach.|
The collection sold for over $41,500.
|While Bernard Madoff serves a 150-year prison term in South Carolina, five former employees were found guilty of conspiracy March 24 2014. A jury ruled they had for years helped conceal his massive Ponzi scheme.|
The verdicts were the first jury convictions since Madoff’s $18bn scam was exposed. Annette Bongiorno worked for Madoff for 40 years as his secretary and at one point had as much as $50m in her accounts. Bongiorno, 65, had multi-million dollar homes in Long Island and Florida and drove a Mercedes worth $100,000.