The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008, with the size of the fraud estimated to be $64.8 billion. Bernard Madoff, the founder of Wall Street firm Bernard L. Madoff, admitted that the wealth management arm of his business was an elaborate Ponzi scheme. Investors were paid returns out of their own money or that of other investors rather than profits. Bernie thought he "made off" with a fortune, but he's rotting in jail.