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Kevin Bacon loses part of his fortune in a pyramid scheme

Kevin Bacon and his wife Kyra Sedgwick have been building successful careers in Hollywood for decades. Roles in well-known movies and series placed the couple among the most sought-after and best-paid actors in the American entertainment industry. However, their fortune is not consistent with that journey and not precisely because of their high level of expenses: the couple was scammed by one of the greatest swindlers in the history of their country.

This was revealed by the actor Footlose in the podcast smartless, performed by Jason Bateman, Sean Hayes and Will Arnett. There, Bacon claimed to have lost “most” of his wealth in Bernie Madoff’s Ponzi scheme.

This scheme, used by Madoff, was one of the biggest frauds in history. In addition to Bacon, other equally famous victims fell, including John Malkovich, Steven Spielberg, the owners of the New York Mets and L’Oreal heiress Liliane Bettencourt.

Bacon and Sedgwick invested “most” of their money in the scheme before evidence of fraud was discovered. “However, that experience left us with several obvious life lessons. You know (…), if something is too good to be true, it is too good to be true”, reflected the actor last Tuesday, October 11.

He added that “when something like this happens, you look at yourself and then say, ‘Well, this sucks. Let’s roll up our sleeves and get to work.’”

With the same positive attitude, Bacon was grateful because in his case the scam did not break them emotionally. “We have come this far, our children are healthy, we are healthy,” continued the 64-year-old interpreter.

“We can still both work and you certainly get angry about what happened, but I have to say that there were a lot of people who ended up much worse off than us. Seniors, people whose retirement funds were completely decimated,” he added.

Bacon said that “you must never lose sight of the fact that there is always someone who is having a much worse time than you”, he reinforced and ended the topic with advice for those who are going through a similar situation: “Even if it seems like a clicheWhat does not kill you makes you stronger”.

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Madoff died in April 2021, aged 82, while serving a 150-year sentence. The millionaire ex-investor had enjoyed a life of privileges, the product of having kept the wealth of others until he was indicted for carrying out one of the biggest financial scams in history. The man spent 12 years in prison for having put together a financial pyramid of $65,000 million.

In 2009, after being denounced by his own children and seeing that a major investigation was about to take place, he admitted in New York courts to having defrauded thousands of clients with billions of dollars in investments over decades.

Madoff always moved in the field of finance and his company, Bernard Madoff Investment Securities, had a great reputation in the Wall Street environment. It is not known when he got involved in the Ponzi or pyramid scheme. It is only known that this is how he began to earn money without risking his own and maintain his life of luxury: he used money from new investors to pay older ones.

In 2000, Harry Markopolos was the first to notice the fraud, and a year later he collaborated with journalist Michael Ocrant on a report for investors. That information did not have any kind of rebound in public opinion, or in the courts, or on Wall Street. Because of that, he began to wonder how big Madoff’s influence was.

Four years later, Markopolos filed a 19-page complaint with the Securities and Exchange Commission (SEC), the agency that regulates the stock market. It also didn’t get much of an impact, even a Madoff niece later married one of the SEC officials.

Apparently, everything began to be made public in the face of the financial crisis that the United States was going through and when some of the investor’s clients decided to withdraw nearly $7,000 million of their funds and Madoff could not cover those withdrawals. This caused the beginning of the collapse of his empire and with it his clients, which included charities and foundations, as well as middle-class families who had relied on the image he had built.

From one day to the next he became the most hated man, since having clients as public as Spielberg, his story did not go unnoticed. It was then that his two sons, in 2008, decided to report him for pyramid schemes and Madoff accepted his guilt and was sentenced to 150 years in prison. Perhaps his strategy was a way to protect his mother, Ruth –who would also have been aware of the fraud–, her family and third parties involved.

A court-appointed trustee has already recovered more than $13 billion of an estimated $17.5 billion that investors put into Madoff’s business. At the time of his arrest, fake account statements told clients they held $60 billion worth of holdings.

The rest of his family came out unscathed from the social condemnation. Both of Madoff’s children died: Andrew of cancer at 48 and Mark by suicide at 46 in 2010. Only his wife, Ruth, managed to survive him.

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