Ponzi schemes are devilishly easy to pull off (but we advise you NOT to try it at home.) Promise investors astronomical returns, and then just shift the investments around. The money that the earliest members put in would be returned from the investments of the later members; the later members would be paid from the funds of those who joined in after them. The pyramid eventually collapses, but by then the man at the top would have vanished. Schemes of this sort have been around at least as early as 1920 when Charles Ponzi popularized the technique, and probably much earlier. But none were done on the scale of Bernard Madoff’s.

On this day, March 12, in 2009 “Bernie” Madoff entered a guilty plea to all 11 charges of fraud stemming from his wealth management business. He was convicted and sentenced to the maximum penalty under the law: 150 years in prison.

Madoff’s Ponzi vehicle was his Wall Street firm, Bernard L. Madoff Investment Securities LLC. It was seemingly one of the top investment firms, drawing in a who’s who of moneyed elite. None of them had a clear idea of how Madoff supposedly made his returns, and few even cared to ask, as long as the returns were rolling in. An estimated $36 billion went into the scheme, with only half of it ever returned.