Mr. Madoff, onetime chairman of the Nasdaq Stock Market and a fixture on Wall Street for decades, shocked the world in December 2008 when he confessed his investment business was a multibillion-dollar Ponzi scheme. He pleaded guilty in March 2009 and was given the longest sentence allowed.

The size and duration of his fraud were elusive. Initial reports indicated $65 billion had been wiped out at Bernard L. Madoff Investment Securities.

But it soon became clear that the assets Mr. Madoff boasted of managing existed only on paper. He hadn’t invested clients’ money, instead shuffling billions of dollars through his company’s bank account and fabricating statements showing profits year after year. Ultimately, a court-appointed trustee estimated Mr. Madoff took $17 billion of customer money through the scheme.

A statement from the Bureau of Prisons on Wednesday said Mr. Madoff died at the Federal Medical Center in Butner, N.C. Mr. Madoff’s death came roughly a year after his attorney asked a federal court to release him from prison as he fought a terminal illness.

Mr. Madoff, who had served the first decade of a 150-year sentence, had chronic kidney failure and 18 months to live, his attorney wrote at the time.

Mr. Madoff “doesn’t dispute the severity of his crimes nor does he seek to minimize the suffering of his victims,” his attorney wrote at the time. “Now, after over 10 years of incarceration and with less than 18 months to live, Mr. Madoff humbly asks this Court for a modicum of compassion.”

On Wednesday, Mr. Madoff’s lawyer said his client had been on kidney dialysis for some time.

Mr. Madoff was a brilliant con artist. He exuded respectability and cut an aristocratic figure, with a mane of silver hair. He enticed victims with an air of exclusivity, luring investors to plunk down huge sums by threatening to turn them away. Mr. Madoff let it be known that he wouldn’t be bothered with clients who couldn’t invest enough. He was famously secretive about his methods, adding to the allure—and allowing him to escape detection.

Mr. Madoff cultivated a large, though not solely, Jewish clientele. His wealthy and well-known clients included members of the Wilpon family, the previous owners of the New York Mets; the late Elie Wiesel, the Holocaust survivor and Nobel laureate; banks, hedge funds and charities; and thousands of elderly retirees. Victims crowded into his 2009 sentencing hearing.

“The fallout from having your life savings drop right out from under your nose is truly like nothing you can ever describe,” Dominic Ambrosino, a retired corrections officer, said in court.

Irving Picard, the court-appointed trustee assigned to recover funds for victims, had collected more than $14 billion, largely through lawsuits and settlements against investors who withdrew more from Mr. Madoff’s firm than they invested and institutions he accused of ignoring red flags because of Mr. Madoff’s healthy profits.

As a result, many victims recouped what they had initially invested with Mr. Madoff. But they didn’t recover the wealth they once thought they had because of his lies.

The scandal was depicted in many books, by journalists, victims and the fiancée of Mr. Madoff’s younger son. In 2016, an ABC television movie called “Madoff” starred Richard Dreyfuss as the con man. HBO released its own film, “The Wizard of Lies,” based on a book by Diana Henriques, in 2017 with Robert DeNiro as Mr. Madoff and Michelle Pfeiffer as his wife, Ruth.

Mr. Madoff helped lead a revolution in finance in the 1970s through his legitimate market-making business. He was among the first to use computer screens to display equity prices and execute trades.

His fraudulent investment-advisory business—where Mr. Madoff falsely claimed to beat the market with his “split-strike conversion strategy”—helped fund a life of luxury for him, his wife and their sons, Andrew and Mark. The family acquired homes in Manhattan, the Hamptons and Palm Beach, Fla.; a multimillion-dollar yacht; country-club memberships, and shares in private jets.

Mr. Madoff seemed to mock victims after his arrest, inciting rage as he smiled for the television cameras when he passed throngs of reporters on the street. As he faced sentencing, he rejected the notion that he was unsympathetic. “I will live with this pain, with this torment for the rest of my life,” Mr. Madoff told then-U.S. District Court Judge Denny Chin.

Later, he would lay some blame on his investors, saying they had enough warning signs to catch on. “Everyone was greedy,” he told New York magazine in a jailhouse interview published in 2011. “I just went along. It’s not an excuse.”

Rejecting pleas by Mr. Madoff’s lawyer for a sentence that might allow him some life after prison, Judge Chin sentenced him to 150 years.

“The message must be sent that Mr. Madoff’s crimes were extraordinarily evil, and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper,” the judge said.

After his exposure, authorities set out to convict others involved in the scheme. Mr. Madoff’s older brother, Peter, pleaded guilty to fraud for faking documents and lying to regulators but denied knowing about the Ponzi scheme. Peter Madoff was sentenced in 2012 to 10 years in prison. Bernard Madoff’s lieutenant, the late Frank DiPascali, did admit to complicity in the Ponzi scheme, pleading guilty to fraud charges. Mr. DiPascali died in 2015, without having been sentenced for his crimes.

Five ex-employees were convicted in 2014 of crimes related to the fraud, such as falsifying records, but weren’t shown to have known about the Ponzi scheme.

Members of Mr. Madoff’s immediate family maintained they didn’t know about the fraud either and weren’t charged. But the family was destroyed.

His sons worked for years in Mr. Madoff’s market-making business, on the 19th floor of Manhattan’s Lipstick Building, two floors above the epicenter of the fraud. It was they to whom he confessed, and they who reported him to authorities.

Ruth Madoff, cut off by her sons for standing by her husband, eventually stopped speaking to him. Mark Madoff hanged himself by a dog leash in 2010 on the second anniversary of the scheme’s revelation. Andrew Madoff died of cancer in 2014.

In a statement on Wednesday, Mr. Madoff’s lawyer, Brandon Sample, said that “Bernie, up until his death, lived with guilt and remorse for his crimes. Although the crimes Bernie was convicted of have come to define who he was—he was also a father and a husband. He was soft spoken and an intellectual. Bernie was by no means perfect. But no man is.”

Bernard Lawrence Madoff was born on April 29, 1938. He was raised in a middle-class family in Laurelton, a suburban neighborhood in Queens, N.Y. While at college at Hofstra University on Long Island, he married childhood sweetheart Ruth Alpern and applied for a broker-dealer license.

Mr. Madoff found a niche as a market maker for people who wanted to trade in small quantities, mostly of bonds, also known as odd lots, he told New York magazine in the jailhouse interview. These were “the crumbs” big banks had passed over, but it was a high-margin business, he said.

In the early 1970s, Mr. Madoff joined a consortium of dealers that developed the screen-based trading system that became the Nasdaq Stock Market. Before that, prices were propagated nightly via “pink sheets.” His break came in 1975, when the brokerage industry deregulated commissions, allowing regular investors to trade affordably without a broker. Mr. Madoff began handling large blocks of trades. He was Nasdaq chairman in 1990, 1991 and 1993.

Mr. Madoff had already begun managing private wealth. Carl Shapiro, a philanthropist, met him in the early 1960s and gave Mr. Madoff $100,000 to invest. “He did very well with it,” Mr. Shapiro told the Palm Beach Daily News.

It isn’t clear when Mr. Madoff turned to crime. Federal prosecutors said his fraudulent activity began in the 1970s. Mr. Madoff said he recalled his scheme beginning during the recession of the early 1990s, when he began fabricating profits to please institutional clients. In the U.S. and abroad, so-called Madoff feeder funds that helped private investors get access to his fund multiplied the impact of the fraud.

Meanwhile, inside the Madoff investment-advisory offices on the 17th floor of the Lipstick Building, only a few trusted employees had access with a keycard.

There, Mr. Madoff told them to create phony trades to be included on account statements, giving higher returns to favored investors, prosecutors have said. Employees once put a new fake document in a refrigerator to cool it after it came off the printer and threw it around like a “medicine ball” to make it look old before turning it over to an auditor, Mr. Madoff’s former lieutenant, Mr. DiPascali, testified at a trial of former colleagues.

Mr. Madoff didn’t go unsuspected. A 2001 Barron’s article focused on the improbability of his returns. Whistleblower Harry Markopolos, who concluded Mr. Madoff’s reported gains were impossible after trying and failing to replicate them, complained to the Securities and Exchange Commission, sparking an inconclusive investigation.

Some bank and hedge-fund employees privately questioned his methods and wondered if he was a fraud. Mr. Madoff, insisting that his trading operation remain a black box, rebuffed requests from these institutional investors to visit his operations or explain them, according to lawsuits filed by Mr. Picard, the trustee. While some didn’t work with him because of these questions, others nevertheless put their questions aside in light of his steady profits.

The SEC’s failure to discover Mr. Madoff’s fraud revealed it, in the minds of many, as an ineffectual guardian of the markets. A nearly 500-page report by the agency’s inspector general in 2009 concluded that substantive, specific complaints and news articles over 16 years should have raised significant questions about whether Mr. Madoff was trading.

Yet during three examinations and two investigations, the agency never gave him “thorough and competent” scrutiny, for instance by independently verifying his trading, the inspector general found.

Only the pressure from the crisis brought Mr. Madoff down, as his fund was overwhelmed with redemption requests when people lost money elsewhere.

This story has been published from a wire agency feed without modifications to the text.

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