what madoff was really doing was depositing client funds into a single bank account that he used to pay existing clients who wanted to cash out he funded the redemptions by attracting new investors and their capital this is the classic ponzi scheme model take in a constant stream of new money while paying enough back to maintain the appearance of outsized gains 
inevitably the fraud unraveled when the market turned sharply lower in late 2008 and too many clients sought to withdraw their money on dec 10 2008 he confessed his wrongdoing to his sons who worked at his firm the following day they turned him over to the authorities bernie remained adamant that his sons and his wife were not aware of his scheme the fund s last statements indicated it had 64 8 billion in client assets 2it is not certain when madoff s ponzi scheme began he testified in court that it started in the early 1990s but his account manager frank dipascali who had been working at the firm since 1975 said the fraud had been occurring for as long as i remember 1011even less clear is why madoff carried out the scheme at all i had more than enough money to support any of my lifestyle and my family s lifestyle i didn t need to do this for that he told fishman adding i don t know why the legitimate wings of the business were extremely lucrative and madoff could have earned the wall street elites respect solely as a market maker and electronic trading pioneer 12madoff repeatedly suggested to fishman that he was not entirely to blame for the fraud i just allowed myself to be talked into something and that s my fault he said without making it clear who talked him into it i thought i could extricate myself after a period of time i thought it would be a very short period of time but i just couldn t 13madoff put some of the blame on his clients several wealthy individuals and a number of fund managers funneled vast amounts of money into madoff s firm some were feeder funds that essentially handed over their clients entire assets to madoff to manage everybody was greedy everybody wanted to go on and i just went along with it madoff told fishman he indicated that these investors at least must have had their suspicions about the returns he claimed to be producing how can you be making 15 or 18 when everyone is making less money madoff said 14