Virtually everybody who checks the news on the internet, newspapers, newsweeklies know that disgraced financier Bernard Madoff pleaded guilty of eleven charges. These include running a Ponzi scheme, money laundering, perjury and theft. Source NYTimes. Specifically Madoff confessed he ran a Ponzi scheme through the investment advisory side of my business, Bernard L. Madoff Securities L.L.C.” His confession was to Danny Chin Judge Federal District Court in NYC, NY. If you are curious to see what his "investment" firm business was presented, at least, to the internet you can go to www.madoff.com. You need to go to www.archive.org and type in the url in their search box. The site itself in my humble opinion is quite impressive looking. The design is very professional looking. Please note this is the way the site appeared before the scheme was exposed.
Many of the witnesses who mainly made of up of the scammer's victims desperately wanted a trial. I am on the same wavelength with them. Strongly suspect that the con artist confessed his guilt because he is hiding others involved with the scam. I wonder if his sons bought charges against their father in response to a deal for themselves. Update. They are now being considered suspects, 03/18/09. Source NYTimes. The arrest came pretty quickly after his confession to his sons. Were charges to them were dropped so the govt. could get to Madoff the big Mahoff. Did Madoff urge them to press charges to protect them from charges themselves?
One thing about a trial there could be questions on who else was involved. Was his wife, Ruth in on the operation? Technically this is a presumption that others were in cahoots. Conversely many legal and financial experts believe it was impossible for him to pull off such a colossal undertaking for so many years, being the lone operator. Is there a different reason for him taking the entire blame? Thirdly I am wondering does naming the people who were involved, if there were others, make any difference?
I am hoping if it does make any difference, that its finding out how to get the victims financially compensated
I feel I am being naive on this. However perhaps not. I do think the only thing that will make this tragedy any better is remuneration for the victims. Plus learning from this so future Ponzi schemes are less likely to happen.
One thing regarding compensating the victims, is how badly, financially were they hurt. It isn't only how much money but how their finances were before they were swindled. There were quite a few very wealthy men and women involved. How well off were they before the Ponzi scam and how well off are they since. Elie Weisel I read in the news reports lost his life savings. Conversely Kevin Bacon lost ten million dollars. However what percentage of his earnings, finances is that? I don't know. For all I can tell that figure is equivalent to pocket change. I can't tell. I am not presuming anything here. My point some investors could of been victimized more than others. Those who were most monetarily hurt should be helped the most. Families and individuals who are forced to start over, could become homeless, break out of retirement, similar situations to me, need the most assistance.
In the news reports, there were various news interviews with some of those who fell for the scam. While I feel deeply for them, I believe the charitable foundations were the most hurt. My reasoning is because not only were the foundations hurt, but the organizations that they gave to were hurting too. Because of Madoff, these charity foundations are no more. One such example is the "Picower Foundation", according to the Judiciary Report web site, was forced to close for good, due to losing its all its money from investing in Madoff's firm. It was managed by husband and wife team, Barbars and Jeffrey Picower. They were regular donors to Harvard and MIT among other educational institutions. There were other major foundations that lost literally every penny to Madof and were forced to close. This not only hurts them but the charities they gave to. There were several other charitable foundations that now don't exist thanks to Madoff
Its true these charities could obtain funding from other sources. However the way the US economy is so dismal, this probably won't be that easy. For the record some of the causes were The American Civil Liberties Union, Amnesty International, Center for Constitutional Rights etc.
Certainly there is no guarantee in a practical sense it doesn't matter who else was involved. Getting a complete account of everybody involved, no matter what the capacity is may not change the devastating financial and emotional circumstances of the victims. However in terms of justice I think its of utmost importance
My definition of justice is simply this. People getting what they deserve as much as possible. The foundations, banks, charities, families, individuals who lost enormous sums of cash, including for many, their life savings deserve to get their money returned. Perhaps if Madoff's properties were ceased and the dollar equivalent was turned into dollars than that money could go toward those who were ruined. I mean what good are his luxury homes and apts doing him now? Or for that matter obtaining ill gotten gains from his and his family's assets.
I see from somewhat recent headlines that the Madoff's properties were seized. Plus his wife Ruth's tens of millions were forfeited too. Mixed feelings here. If she is innocent then part of me thinks seizing her assets is unfair. However if she was involved with the scam then I say it was justified. Bernard Madoff said he was terribly sorry for the harm did the Ponzi's victims. Please note this is not an exact quote. Its the gist of what he said as he plead guilty on the eleven charges. I say if he is truly is remorseful he should do his best to cooperate with the authorities to give back as much money as possible. I can't say how much can be given back. I do think justice is not only Madoff serving prison time. It includes helping the victims. This is a gigantic swindle where tens of thousands of people lost their live savings. It is a financial disaster that if it were a natural disaster, I think would rival Hurricane Katrina in its immense damage.
One can say these persons don't deserve monetary compensation. It was their fault for being so foolish.
How could they invest in an obvious scam. My question was if you're were not an investment and/or financial expert how clear was it a false endeavor. At any rate below are thoughts from James Hedge IV of LJH Global Investments of the, at least to him, clear signs, something wasn't right.
"The reason is simple, in Hedges' view. Letting Madoff manage your money "wouldn't pass an institutional-quality due diligence process," he says. "Because when you get to page two of your 30-page due diligence questionnaire, you've already tripped eight alarms and said 'I'm out of here.' " In short, in Hedges' opinion, any sophisticated entity that actually did its homework would have seen the warning signs."
My question is how many of the investor victims were rather sophisticated. It seems that sophistication, being cultured doesn't mean one isn't gullible. There is the factor of greed too. On the other hand there were many charities who invested because they believed they could raise funding for their charitable work. Being in on the inner circle and thought as the priviledged few seemed to be factors that Madoff used to lure his investors. They were made to view themselves as the inner circle. Here you have very bright individuals such as Elie Weisell, Steven Speilberg, Mort Drucker, Sandy Koufax, Kevin Bacon and his wife, Kyra Sedgewick faling for the the scheme, losing practically everything. Speilberg and Weisel as most know lost their foundations.
Now is the time for essays, editorials on how to not to be victimized by Ponzis.It seems that every time something like this happens there are such reports. It reminds me of how there are traffic lights installed only after someone is killed. It seems, likewise that there are writings on how to not be a victim of a scam after the fact. Well maybe this time it'll do some good. I personally remember in the mid 90's there was something called the New Era Philanthropy investment fund. The director was John Bennett. He guaranteed he could double those who invested with him, their funds, in a few months. Bennett involved mostly charities, educational, other institutions from the greater Philadelphia area.
It seems that after that Ponzi was pretty much thoroughly invested, reported in the news, that would be the end of Ponzis. Obviously it wasn't.
What is a Ponzi. A Ponzi is simply where new investors are used to pay those who invested earlier. In the beginning a couple of investors invest X amount of money. For example $1000.00. They get ten% of their "investment" returned. In reality its the money is coming from the cash they invested
There is no interest or principle involved. In other words the dollars or what ever currency is not being used to make any earnings for anyone.
Eventually the money source dries up. New investors needed to pay the old investors. These new investors in turn lose their money to newer investors. It kind of reminds me of free radicals. I'm not getting into politics here. Free radicals are cells that are missing an electron. In a normal cell there are eight electrons. In free radical cells there are seven. They need to get that eighth electron. So they "rob" the normal cells of their electron. The normal cell in turn loses an electron and now itself becomes a free radical cell. Likewise the newer investors eventually lose their money by paying for earlier investments. Therefore even newer investments are needed to pay for them until it becomes a vicious cycle.
The lure is a high return in a short period of time. For example doubling your money in less than six months. Doublers and cyclers on the net I suspect are Ponzis.
Never get involved in any investment unless you thoroughly check it out with the Better Business Bureau or your nation's equivalent. Make certain there is a physical location and not just a P.O. Box. Go to a reputable lawyer for certain that it is legit.
Please note multi level marketing aka MLM are legitimate if they are selling a real product. Sales organizations that emphasize recruiting more members as opposed to selling a product are usually pyramid schemes. Businesses that claim they sell a product but its an inferior, overpriced or not that popular are suspect too.
Essentially I believe justice here is twofold. Bernard Madoff getting what he deserves and the people who invested with him, getting monetarily compensated as much as possible. Lastly, lessons learned.
