Madoff Sought Cash to Keep Scheme Afloat

Disgraced financier given $250 million by friend to stave off collapse of business
By Jim O'Neill,  Newser User
Posted Jan 7, 2009 8:33 AM CST
Disgraced financier Bernard Madoff, left, leaves US District Court in Manhattan escorted by US Marshals after a bail hearing in New York, Monday, Jan. 5, 2009.   (AP Photo/Kathy Willens)
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(Newser) – As the feds closed in and Bernard Madoff scrambled to shore up his crumbling firm, a longtime friend gave the disgraced financier $250 million, reports the Wall Street Journal. With investors seeking to redeem $7 billion from the fund, Madoff turned to 95-year-old Carl Shapiro for help, promising a quick return. Shapiro is estimated to have lost $400 million in what investigators call a $50 billion Ponzi scheme.

The criminal complaint against him says Madoff told one of his sons he was "struggling to obtain the liquidity necessary to meet those obligations, but that he thought that he would be able to do so." Madoff also sought cash from others, offering a 19-page pitch book for what he said was to be a new fund for exclusive investors. He was able to entice at least one investor to put up $10 million on Dec. 5, less than a week before his arrest.