Madoff Ripoff


The Swan fraud is a pygmy compared with the giant Madoff ripoff. Over several decades Bernard Madoff made off with US$50 billion from the inner sanctum of New York’s financial tabernacle via an upmarket Ponzi scheme.

 Charles Ponzi  arrived in the United States in 1903 virtually penniless. The scam which bears his name is an illegal investment vehicle that pays off old investors with money from new ones.  Relying on a constant stream of new investment such schemes eventually collapse under their own weight, especially when times are tough and people inconveniently want their money out.

 Both Ponzi and Madoff played on the credulity of investors like the virtuoso fiddlers they both were.

Ponzi offered first to friends and associates and then to fast multiplying members of the public, many of them new migrants, a 50% return on investment in 45 days based on the “great returns” available from postal reply coupons which, he explained to the credulous, made such incredible profits easy.

Wall Street fixture Madoff’s modus operandi was more upmarket and  conservative-he only offered 11-14%. International banks, hedge funds, charities and wealthy private investors are among the Who’s Who of investors ruefully counting the cost.

When jailed for an earlier financial infraction before he hit upon the scheme which bears his name, rather than inform his mother of this career impeding  development, Ponzi posted her a letter stating that he had found a job as a “special assistant” to a prison warden.  Madoff’s court case is ahead of him but with his insider knowledge he can no doubt aspire to be the Executive Assistant to the Prison Governor.


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