Bernard Madoff: Scam Artist

Madoff admitted to this fraud in March 2009 and was sentenced to 150 years in prison. While the total scheme is estimated to be about $50-65 billion from his investors would account to less than $10 billion when discovered. Although the Madoff scandal revealed the activities were illegal and unethical, another scandal equally present in the scheme was that the U.S. government and regulators failed to protect investors.

Many times in a Ponzi scheme the offender targets people they do not know personally but not Madoff. He had family, friends, employees and even charities and non-profit organizations as investors. “He tapped local money pulled in from country clubs and charity dinners, where investors sought him out to casually plead with him to manage their savings so they could start reaping the steady, solid returns their envied friends were getting” (Colesanti, 2012). “Levy invested $100,000” for Dell’Orefice, who felt honored to be a part of the “exclusive fund” (Lewis, 2010). Sheryl Weinstein, who was a friend of Madoffs for nearly 24 years, lost her entire savings to Madoff’s Ponzi scheme. “The charitable foundation of philanthropist Carl Shapiro had invested about 45 percent of its assets ($345 million) in Madoff's fund” (Auerbach, 2009). It is “estimated that Madoff's scam cost Jewish philanthropies at least $600 million, and

Bernie Madoff was raised watching his parents Ralph and Sylvia Madoff run a business that was not successful in the financial trading world. That company was named Gibraltar Securities. Due to the fact that Sylvia failed to accurately report their company’s financial condition, the SEC closed the business in 1963 and started its investigative proceedings to determine if charges were needed to be

Bernie Madoff was known as a hard worker who, at one point, created the largest buying-and-selling market maker at the NASDAQ from being a mere penny stock trader in the 1960s. He was a stock broker, a financial advisor, and a chairman of the NASDAQ. As of December 11, 2008, he primarily became known for being responsible for the largest Ponzi scheme in history. He was able to make $50 billion disappear as if the money had never existed by using new investors’ money to pay out the old. The Securities and Exchange Commission (SEC) had received tips about Madoff’s business, and paid his office a visit for an investigation. However, even after hours were spent searching through fabricated trading records, the SEC wasn’t able

Bernie Madoff started his own market maker firm in 1960 and was an influential individual in the startup of the Nasdaq stock market. He also was on the board of National Association of Securities Dealers and an advisor to the Securities and Exchange Commission on trading securities. This extensive and impressive background in the investment industry allowed him to build and maintain the largest known Ponzi scheme is United States history. Under this Ponzi scheme, Madoff used the money coming in from new investors to pay the previous investors the promised 50% returns in 90 days. Investors would buy into Madoff’s investment plans and invest more money while more investors would join. The exact start date of Madoff’s Ponzi scheme is unknown,

In connection with this Ponzi scheme, Bernard took those billions of dollars from investors money, charitable organizations, trusts, pension funds, hedge funds, and among others. He also caused false and fraudulent certified financial statements including balance sheets, statements of income and cash flows, and reports on internal control. Madoff told his family that if they invested money in him, he would add money to their interest account each year. Investors believed that money was being put into their accounts since it was being added each year, they had no reason to take their money out. Due to the economy, everyone started taking their money out and Madoff couldn't pay his family back. Madoff pleaded guilty to charges of fraud and faces 150 years. This scheme has now caused a big problem to SEC's reputation because people have lost their faith in the

I believe the SEC was unable to discover the Madoff fraud because it was not registered

Bernie Madoff used a Ponzi scheme which lures investors by guaranteeing astronomical returns using unorthodox “investment strategies” with the hopes that, both the investor base will grow exponentially and the returns will not be called upon sparingly (Yang, 2014). For Madoff, the unsustainability of the Ponzi scheme began to unravel when Madoff presented $200-$300 million albeit, his clients” request for $7 billion in returns (Yang, 2014). Therefore, it is logical to suspect that Madoff’s financial figures both documented and reported were compromised; an observation alluded to by a Madoff associate, Mr. DiPascali, who according sources, admitted to manipulating the returns of several clients, jiggering them up or down -- phantom gains added

He was running his firm, Bernard L. Madoff Investment Securities LLC, using a Ponzi scheme. According to the CNNMoney (Smith, Aaron., 2013), no one knows when Bernie Madoff started his Ponzi scheme towards people because he first claimed that he started in 1987, but later he said that it began in 1992, while some reports claim that he started when he first started working on Wall Street which was in the 1960s. I personally think that he probably used the Ponzi scheme for more than 20 years since he got arrested

In 1956, Bernard graduated from Far Rockaway high school where he met Ruth who he would later marry. After graduating

This is why it is important for individuals to try and detect the signs of fraud to avoid losing all of one’s wealth. Auditors and Regulators have not always detected fraud cases of either Ponzi or illegal pyramid structures until it is too late. Not only will individuals want to make returns, but withdraw the profit that was made from the investment. In the Madoff case of 2008, it was up to a whistleblower, Harry Markopolos, to uncover the massive fraud Enterprise Bernie Madoff had constructed. In a story detailing the case Hickery writes. “He reported Madoff's behavior to the SEC five times in eight years. Regulators either ignored or flubbed every opportunity to unmask his Ponzi scheme. In the end it was only uncovered when Madoff confessed to his sons and was handed over to the authorities as the inevitable mathematics of financial entropy caught up with a scheme that was worth US$65 billion by the end of 2008” (Hickery, 2013). This is an example, of how the government unable to protect the victims nor able to catch Bernie after years of false documentation. The laws detailing pyramid schemes and multi-level marketing schemes make it just as difficult to detect and convict organizations before the damage is

Bernard (Bernie) Madoff committed this century’s largest Ponzi scheme to date. First we will define Ponzi Scheme – it is a fraudulent pyramid scheme where original investors are paid their gains out of new investors money so it would appear to old investor that the scheme (business) is producing an unusually large return (Albrecht, 2009). The Ponzi scheme that Madoff created and pulled off for years was quite intricate. In a standard pyramid scheme each victim unknowingly brings in more and more victims, where as a Ponzi scheme has a single entity (group or individual) to keep up with and organize the fraud. The operator of the Ponzi scheme then will take new money brought in from recent investors and

When the financial crisis of 2008 struck the world, there were multiple business scams and schemes that became exposed, creating a colossal uproar and unrest around the world. When the stock market collapsed, people all across America took a hit, with 2.4 trillion dollars of the Americans people’s savings vanishing in just a few weeks. This financial crisis also brought to light an unprecedented amount of fraud, over exposing people who were cutting corners. One of the most famous scams that surfaced in late 2008 was operated and executed by Bernard Madoff, in which he perpetrated the largest Ponzi scam in American history. A Ponzi scheme is a simple swindle where by one set of investors are paid unreal returns out of money received from another investor. A Ponzi scheme is however always disaster prone from the beginning as there is never a strategy to wholly recoup investors money.

Bernard Madoff felt that he needed to prove to everyone that he was the best. He wanted to show everyone that he could be successful. He wanted the recognition and the lifestyle of the rich and famous. He was resentful of the establishment in place as a young man trying to get into the industry and wanted to show them all by being amazingly successful. He encouraged friends and family to let him invest their money into something that benefited from fraud. I do not see any reason to suppose that Bernard Madoff slid into the greatest Ponzi scheme in history without intending to continue for the long haul. I think he only confessed because he was caught with more withdrawals than new investments during the crisis of 2008. A Ponzi scheme needs

Bernard Madoff was able to pull off the largest white collar fraud, in the history of investment trading. His fraudulent activities were later discovered in 2008, when his firm begin to crash. Mr. Madoff was able to gain over $65 billion of investment funds through conducting the Ponzi Scheme. According to Ferrell , Fraedrich and Ferrell (2015), self destruction of the Ponzi scheme results rapidly as the ability to continuously recruit new investors dwindle.