Bernard Madoff was an American financier who executed the largest Ponzi scheme in history, defrauding thousands of investors out of tens of billions of dollars over the course of at least two decades. A Ponzi scheme is a type of scam that promises significant returns on investments, but in reality, the payouts come from money new contributors have invested. Madoff attracted investors by promising them high returns on their investments, but instead of investing their money, he deposited it into his personal bank account and paid earlier investors using the money obtained from later investors.

Madoffs operation differed from a typical Ponzi scheme in that his brokerage operation arm was very real, and he handled large trades for institutional investors. He also claimed to use a legitimate strategy and offered "unusually consistent" annual returns of around 10%, which were a key factor in perpetuating the fraud. Madoffs scheme was able to go undetected for a long period because he managed money mainly for charities, and the 5% payout rule, a federal law requiring private foundations to pay out 5% of their funds each year, allowed him to keep the scheme going.

Madoffs Ponzi scheme came to an end after his sons turned him over to authorities, and in 2009, he pleaded guilty to 11 federal felony counts, including securities fraud, wire fraud, mail fraud, perjury, and money laundering. He was sentenced to 150 years in prison and forced to forfeit $170 billion as restitution.