I don't remember any threads on the Bernie Madoff, Ponzi scheme, its a few years old now and Bernie is in jail. I am sure that Wilkipedia has a facts page if some background is needed. Are the Madoff victims the innocents that they claim to be? do they deserve our sympathy? And what of The Banking Regulators; do they deserve to pay a price for allowing the Ponzi scheme to go on? Do these regulators deserve our trust? Ia all of this an abberation or is this how the whole system works?
One of the hallmarks of a good con is to bring your victims into your "confidence". If you can talk the average person into taking part in something underhanded, ever so slightly, they become part of the crime itself, willingly. This is exactly how Ponzi got his victims. He showed them that stamps could be purchased for one amount and redeemed for more in another currency. Sure, it "worked" on paper. But to actually work would require stamps that technically didn't exist at the time in the quantities needed for the scheme to work. Instead Ponzi paid off older investors with the money from new investors. Only a few stayed in long enough to collect. They were the smart ones who already had a goal limit and a plan for their lives. The bulk of the Ponzi investors not only knew the plan was technically dubious and a bit illegal, but they decided to let their money roll over, back into the plan. Ponzi lost his objectivity and stayed in too long. The government notices when a limited pool of money goes into a singular vortex. Madoff played a modernized version of this game and the money that was siphoned off will never be fully recovered. The unfortunate part though is that in Madoff's scheme most of the investors didn't know it was a con or scheme at all. Those investors thought it was all above board. So you can't use Ponzi's example entirely. And I think it's why Madoff belongs in prison.
Madoff Clerical employee Annette Bongiorino (sp) drove a Rolls Royce in blue collar Staten Island, NY. She was convicted and jailed for her role in the ponzi scheme.
A lot of investment houses refused to do business with Madoff because they knew it was a scam. Not because they were "insiders", but because they knew the returns he was claiming were unrealistic. Complaints to the SEC flowed in for years but they were ignored. It finally reached a point where the SEC had to ask its Inspector General to investigate itself. That's when the ball dropped....not because SEC took notice of Madoff, but because SEC took notice of itself, they needed to investigate why they themselves let it happen. As it turns out, the SEC Assistant Director responsible for investigating Madoff was married to Madoff's neice. It was basically an inside job. One of my mother's clients invested heavily with Madoff. I'm not convinced he didn't know exactly what was going on, this guy is a billionaire. He gave Madoff another $100 million two months before it all came crashing down. He lost so much it made him a lowly millionaire again, but it didn't take long until he was back to billionaire though his wife kept complaining she couldn't show her face at the country club anymore. Boo hoo. I wish I had to suffer the humiliation of being just a lowly millionaire. A lot of people did get hurt though. He screwed over a lot of unsuspecting folks.
