Are the Madoff Family Members Innocent Victims or Willing Accomplices?

Hello DINKS. Today we are discussing a topic that is related to both finance and to couples.  When we are in a couple everything we do or don’t do in our lives is directly or indirectly related to our spouse.  The money we make and the money that we spend affects our spouse.  If we do something wrong in life and it has awful repercussions, we have to be aware that the back lash does not only affect us; it also affects our spouse.




I saw an episode of the Oprah Winfrey show that interviewed the families of convicted Pedophiles.  One of the victims who was abused as a child said that as much as she hates her abuser, she feels bad for his family.  As much as we want to hate on Pedophiles in the media we have to remember that that Pedophile has a wife or a husband.  That Pedophile is a brother or a sister, and they have a family who are also affected by their actions.  This is true for any type of criminal, even financial criminals who commit fraud.

A news topic that we have all been hearing about recently is the trial and conviction of Bernie Madoff and his Ponzi scheme which landed him in jail for the rest of his life. Bernie Madoff’s wife Ruth Madoff and her (surviving) son Andrew Madoff recently did an interview on 60 Minutes.  I watched the interview because I wanted to see how the family of the most notorious financial criminal in history has been living with the loss of their Father and Husband to a life of crime, and the loss of their son and brother to suicide.

The Bernie Madoff Story

Bernie Madoff met his wife Ruth in 1954 in Queens New York; they had two sons named Mark and Andrew.  Bernie Madoff started a Money Management Business while living in Long Island.  Andrew Madoff says that his Dad was a Good Father. He installed good work ethics and family values into both of his sons.  Ruth Madoff says that she and Bernie Madoff lived a moral life and they both knew right from wrong.

Andrew and Mark Madoff grew up to work as Traders for their Father in New York City.  They enjoyed a life of luxury complete with Yachts and homes in both New York and Palm Springs.  The Madoff financial company employed over 100 people, but Bernie Madoff repeatedly told his sons that there would be no succession of the company after he was gone.  Bernie Madoff would not hand off the company to his two sons Andrew and Mark upon his retirement.

The Ponzi Scheme

A Ponzi scheme is a completely fake operation.  Bernie Madoff created phony paper statements that showed profits for his clients, when in fact his company was not profitable at all.  The Madoff Company actually had $50 billion in liabilities, but Bernie Madoff was still reporting profits to his clients.

Andrew Madoff remembers that his father’s way to keep everyone happy was to give them money.  It wasn’t necessarily hush money because Bernie Madoff was not paying off people to keep his scandalous secret; he just kept the money coming in and therefore no one was asking questions.

The Madoff family had an endless supply of cash and therefore they (just like everyone else) assumed that Bernie Madoff’s company was profitable.  There was no need to ask questions or have any doubts about the company’s solvancy.

The Madoff Family: Victims or Accomplices?

In 2008 Bernie Madoff asked his wife Ruth to transfer $10 million from her brokerage account to her personal checking account. Ruth Madoff did not ask any questions because this was not an unreasonable request.  Soon after this transaction Bernie Madoff called a family meeting in his office and confessed to his Wife and two sons that he was broke, and that he had been lying to everyone.

Mark was furious with his father and later turned him into the authorities which led to the arrest of Bernie Madoff.  All three family members claim that they did not know anything about the Ponzi scheme until the day that Bernie Madoff confessed his crimes to them.  To this day Bernie Madoff claims that he acted alone, but I am not sure that I believe him.

His two sons Andrew and Mark Madoff worked for their father but they both claim that they had no knowledge of the Ponzi scheme.  When Bernie Madoff was offered bail his wife Ruth asked their son Andrew to co sign a $10 million Bail Bond, but Andrew refused.

The repercussions for the Madoff family have been horrible, and I do feel bad for them; but that doesn’t mean that they had no knowledge of Bernie Madoff’s “bad” business.  Mark Madoff could not bear the backlash of his father’s shame, and on December 11^th 2010 he committed suicide while his wife and daughter were away on a vacation.

Andrew Madoff’s (the surviving son) assets have all been frozen pending an investigation into his involvement in the Ponzi scheme.  Andrew Madoff’s current net worth is approximately $60 million.  Since Bernie Madoff’s arrest Andrew’s wife has changed her last name, although they still remain married.  It is interesting to know that Ruth Madoff also still remains married to Bernie Madoff, even though he will spend the rest of his life in jail.

The Bernie Madoff Ponzi Scheme has definitely impacted his family and the financial world forever.  My question to you DINKS is… Should Bernie Madoff be the only person punished for the Ponzi scheme?

Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.