Claim: Bernard Madoff employed his niece Shana as his firm's rules and compliance officer and attorney.

Bernard Lawrence `` Bernie '' Madoff -LRB- -LSB- ˈmeɪdɒf -RSB- born April 29 , 1938 -RRB- is an American fraudster and a former stockbroker , investment advisor , and financier . He is the former non-executive chairman of the NASDAQ stock market , and the admitted operator of a Ponzi scheme that is considered the largest financial fraud in U.S. history . Prosecutors estimated the size of the fraud to be $ 64.8 billion , based on the amounts in the accounts of Madoff 's 4,800 clients as of November 30 , 2008 .   Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960 , and was its chairman until his arrest on December 11 , 2008 . The firm was one of the top market maker businesses on Wall Street , which bypassed `` specialist '' firms by directly executing orders over the counter from retail brokers . At the firm , he employed his brother Peter as senior managing director and chief compliance officer , Peter 's daughter Shana Madoff , as the firm 's rules and compliance officer and attorney , and his sons Andrew and Mark . Peter has since been sentenced to 10 years in prison and Mark committed suicide by hanging exactly two years after his father 's arrest . Andrew died of lymphoma on September 3 , 2014 .   On December 10 , 2008 , Madoff 's sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme , and quoted him as describing it as `` one big lie '' . The following day , FBI agents arrested Madoff and charged him with one count of securities fraud . The U.S. Securities and Exchange Commission -LRB- SEC -RRB- had previously conducted multiple investigations into Madoff 's business practices , but had not uncovered the massive fraud .   On March 12 , 2009 , Madoff pleaded guilty to 11 federal felonies and admitted to turning his wealth management business into a massive Ponzi scheme . The Madoff investment scandal defrauded thousands of investors of billions of dollars . Madoff said he began the Ponzi scheme in the early 1990s . However , federal investigators believe the fraud began as early as the mid-1980s and may have begun as far back as the 1970s . Those charged with recovering the missing money believe the investment operation may never have been legitimate . The amount missing from client accounts , including fabricated gains , was almost $ 65 billion . The Securities Investor Protection Corporation -LRB- SIPC -RRB- trustee estimated actual losses to investors of $ 18 billion . On June 29 , 2009 , Madoff was sentenced to 150 years in prison , the maximum allowed .