Bernard Madoff

Few falls from grace have been as precipitous as that of financier Bernard Madoff. Once the head of his own famed investment securities firm, Madoff now will likely spend the rest of his life in prison for running a massive Ponzi scheme with a lengthy roll of A-list victims, many of whom lost everything.

To those who earned an invitation to the exclusive fund, he was "Uncle Bernie" — a wizened market guru who offered a consistent rate of return, independent of the market's performance. He had the system beat, or he did at least on paper. But it turned out his whole operation was only paper: On December 10, 2008, Madoff reportedly told both his sons that the asset management fund was "just one big lie." He had been using money from new investors to pay returns on older investments, but with the market in freefall and more and more withdrawal requests coming in, the scheme fell apart.

On Dec. 11, 2008, Madoff was arrested at his Manhattan home in what could be the largest fraud in Wall Street history. On March 12, 2009 the 70-year-old pleaded guilty to all 11 federal felony counts against him, including securities fraud, money laundering and perjury, which could earn him a total of 150 years behind bars. In addition to the charges, the government is trying to seek at least $170 billion in forfeited assets — something Madoff's lawyers are fighting. For now, Madoff will spend his days waking up in a tiny prison cell until his June sentencing hearing — a big change from his penthouse on the Upper East Side.

Madoff started his firm in 1960 and was instrumental in the development of the NASDAQ, which he eventually chaired. His fund was one of the largest on Wall Street; authorities estimate about $65 billion may be involved.

But, the biggest questions now remain for regulators, who have to figure out how Madoff was able to deceive so many for so long — and how to prevent it from happening again.

—Dan Fletcher and Katie Rooney