The Madoff Scam

[Pakboong]

From the initial announcement of the Fraud admission by Bernie Madoff I was suspicious. After all, he confessed to his two sons who both worked for the firm. How could they not have known?

If the investors were simply subject to bad investment choices, their money is simply lost. But, if they were fraud victims, they have protection under the US governments financial protection scheme. They are facing a tax break and are able to litigate a return. They will likely get most if not all of their money back while other funds are losing over 40%, the Madoff funds could break even for his customers while Bernie spends a couple of years at one of the Federally run retreats for white collar criminals.

Over half of Madoff's clients were large investment firms. These firms have a system of checks and balances to protect themselves.

This story is very fishy to say the least.

[OriginalPoster]

From the initial announcement of the Fraud admission by Bernie Madoff I was suspicious. After all, he confessed to his two sons who both worked for the firm. How could they not have known?

If the investors were simply subject to bad investment choices, their money is simply lost. But, if they were fraud victims, they have protection under the US governments financial protection scheme. They are facing a tax break and are able to litigate a return. They will likely get most if not all of their money back while other funds are losing over 40%, the Madoff funds could break even for his customers while Bernie spends a couple of years at one of the Federally run retreats for white collar criminals.

Over half of Madoff's clients were large investment firms. These firms have a system of checks and balances to protect themselves.

This story is very fishy to say the least.

What are you saying, that Madoff wasn't really bilking investors, that it was all part of a larger conspiracy in which noone lost any money and Bernie would obstain his dream of getting a couple of years of free room & board at Club Fed?

Any, individual investors are protected against brokerage fraud up to $500,000 by federal SIPC insurance. That might make a certain number of investors whole again but not that many. Beyond that, whatever they can deduct off thier taxes will allow recovery of only a fractional amount of what they lost.

Not sure what you're getting at with the point about Madoff's clients who were large investment firms either. Clearly they lost money, you think that they did so on purpose?

Edited January 27, 2009 by OriginalPoster

[hhgz]

"From the initial announcement of the Fraud admission by Bernie Madoff I was suspicious. After all, he confessed to his two sons who both worked for the firm. How could they not have known?"

Do you know of any company anywhere that every employee knows exactly as much as every other employee? His kids that he was a financial wizard.

"If the investors were simply subject to bad investment choices, their money is simply lost. But, if they were fraud victims, they have protection under the US governments financial protection scheme. They are facing a tax break and are able to litigate a return."

Bernie had admitted that he perpetrated a fraud, and I'm inclined to believe him.

"They will likely get most if not all of their money back while other funds are losing over 40%, the Madoff funds could break even for his customers while Bernie spends a couple of years at one of the Federally run retreats for white collar criminals."

That's not true. The victims are not likely to receive any money.

"Over half of Madoff's clients were large investment firms. These firms have a system of checks and balances to protect themselves."

The checks and balances failed.

"This story is very fishy to say the least"

You mentioned that earlier.

It's going to take some time to ascertain the amount of the loss and, perhaps, defining what a "loss" is. Supoose you invested $1 million with Bernie, and he told you that it had increased to $3 million. Later, it was discovered that there was no money in your account. Did you lose $1 million, or $3 million?

[Shotime]

Did the people who committed suicide know they'd get both their and their clients money back?

I think Bernie did it because he could.

[BigSnake]

A shame, a Scam to the MAX let this old dude rot in JAIL and then to hel_l

[Pakboong]

Obviously I am speculating.

But, " A judge has already given his approval in principle for compensation, without any evidence having been presented and financial fraud being demonstrated in a court of law. And it would appear that there will never be such a demonstration in a court of law. Why? It would appear that all the funds financial records are mostly "missing" (rather like Dov Zakheim's US$1.4tn) and those few records that do survive are in a terrible mess."

"the investors in this fund only get to litigate the fund directors against Lloyds insurers in London for even more compensation."

"since the guy has pleaded guilty we do not need to demonstrate the fraud, because he says he is guilty."

" But assuming this actually did happen, the market risk team would have been watching these losses, as would have the accountants. It is not possible to hide things like this internally for very long, months at the most; 20+ years, NEVER."

http://www.rense.com/general84/madoff.htm

just an opinion but logical.

[OriginalPoster]

Obviously I am speculating.

But, " A judge has already given his approval in principle for compensation, without any evidence having been presented and financial fraud being demonstrated in a court of law. And it would appear that there will never be such a demonstration in a court of law. Why? It would appear that all the funds financial records are mostly "missing" (rather like Dov Zakheim's US$1.4tn) and those few records that do survive are in a terrible mess."

"the investors in this fund only get to litigate the fund directors against Lloyds insurers in London for even more compensation."

"since the guy has pleaded guilty we do not need to demonstrate the fraud, because he says he is guilty."

" But assuming this actually did happen, the market risk team would have been watching these losses, as would have the accountants. It is not possible to hide things like this internally for very long, months at the most; 20+ years, NEVER."

http://www.rense.com/general84/madoff.htm

just an opinion but logical.

Now it's making sense. You should have told us up front that this was a Rense thing, it would have been easier to understand then.

Edited January 27, 2009 by OriginalPoster

[Pakboong]

Obviously I am speculating.

But, " A judge has already given his approval in principle for compensation, without any evidence having been presented and financial fraud being demonstrated in a court of law. And it would appear that there will never be such a demonstration in a court of law. Why? It would appear that all the funds financial records are mostly "missing" (rather like Dov Zakheim's US$1.4tn) and those few records that do survive are in a terrible mess."

"the investors in this fund only get to litigate the fund directors against Lloyds insurers in London for even more compensation."

"since the guy has pleaded guilty we do not need to demonstrate the fraud, because he says he is guilty."

" But assuming this actually did happen, the market risk team would have been watching these losses, as would have the accountants. It is not possible to hide things like this internally for very long, months at the most; 20+ years, NEVER."

http://www.rense.com/general84/madoff.htm

just an opinion but logical.

Now it's making sense. You should have told us up front that this was a Rense thing, it would have been easier to understand then.

Actually, it is not a Rense thing. I posted on this days after it became public. On a thread started by Lao. I just added the Rense article in case somebody wanted another opinion.

[PeaceBlondie]

I read recently that Bernie did not make trades, he just pretended to be trading. That might explain much of the absence of records. Some earlier investors in the pyramid got big profits and cashed out. Not everything was lost, was it? How much did Bernie personally gain?

[Pakboong]

It is hard to say. However, I suspect his two sons did not work in the mail room.

[geriatrickid]

Pakboong, if you wish to rely on a bigoted Islamic radical's propaganda, then at least say so up front. You are so wrong and your post has the taint of a cheap hate tract. Here's why;

1. The $50billion loss is just an estimate. As as been discussed on other threads, the true loss will be the actual monies lost, not the assumed time value of the investments + initial investment. Need me to make it clearer? If Little Edna had invested $1million 10 years ago and was getting the 12-15% interest payments over that decade, then she would have gained $1.2million to $1.5 million. Yes, she's screwed but guess what? She got her money back. And that is what was happening to the bulk of investors. The monies already paid out will reduce the alleged $50billion significantly.

2. The people that benefited were the brokers that sold the funds. There were multiple complaints made over the years about the funds. Hence the multiple SEC investigations. If other analysts questioned the sustainability of a fund paying 10-15% when the market was at 5% ROI, then these advisers should have known something was wrong. They were lured by the big commissions. If you know anything about financial product sales, you'd know how that system works. It's all about commission, contingencies, profit sharing and incentives.

3. If people withdrew funds or obtained interest disbursements, they will have that money deducted from the alleged losses. This is why the SIPC is requiring all claimants to provide a full declaration of their interest payments and withdrawals. At the end of the process, alot of the so called victims are going to be asked to pay back some of their earnings.

Let me dumb it down for you. The SIPC has a maximum indemity of $500,000.

If the SIPC takes the position that depositors are limited in the recovery to deposits, minus the withdrawals including interest then an investor who redeemed more than $500,000 since depositing will collect nothing. If an investor put in $5million and received a payout of $500,000. he or she will still most likely get nothing according to the rules.

Need an example? Look up the payments made for the Bayou Investment Fund Collapse back in 2005.

That means that the premise of your source that this evil group of victims would all be compensated up to $50billion bankrupting America while people starve is false.

I suggest that next time you want to use a guttersnipe hate monger as an information source, you at least get someone that knows something about the subject.

[Pakboong]

Pakboong, if you wish to rely on a bigoted Islamic radical's propaganda, then at least say so up front. You are so wrong and your post has the taint of a cheap hate tract. Here's why;

1. The $50billion loss is just an estimate. As as been discussed on other threads, the true loss will be the actual monies lost, not the assumed time value of the investments + initial investment. Need me to make it clearer? If Little Edna had invested $1million 10 years ago and was getting the 12-15% interest payments over that decade, then she would have gained $1.2million to $1.5 million. Yes, she's screwed but guess what? She got her money back. And that is what was happening to the bulk of investors. The monies already paid out will reduce the alleged $50billion significantly.

2. The people that benefited were the brokers that sold the funds. There were multiple complaints made over the years about the funds. Hence the multiple SEC investigations. If other analysts questioned the sustainability of a fund paying 10-15% when the market was at 5% ROI, then these advisers should have known something was wrong. They were lured by the big commissions. If you know anything about financial product sales, you'd know how that system works. It's all about commission, contingencies, profit sharing and incentives.

3. If people withdrew funds or obtained interest disbursements, they will have that money deducted from the alleged losses. This is why the SIPC is requiring all claimants to provide a full declaration of their interest payments and withdrawals. At the end of the process, alot of the so called victims are going to be asked to pay back some of their earnings.

Let me dumb it down for you. The SIPC has a maximum indemity of $500,000.

If the SIPC takes the position that depositors are limited in the recovery to deposits, minus the withdrawals including interest then an investor who redeemed more than $500,000 since depositing will collect nothing. If an investor put in $5million and received a payout of $500,000. he or she will still most likely get nothing according to the rules.

Need an example? Look up the payments made for the Bayou Investment Fund Collapse back in 2005.

That means that the premise of your source that this evil group of victims would all be compensated up to $50billion bankrupting America while people starve is false.

I suggest that next time you want to use a guttersnipe hate monger as an information source, you at least get someone that knows something about the subject.

I respect your right to have an opinion.

[geriatrickid]

That's gratifying. You made claims, and I refuted them. Can you substantiate your claims? You cited Rense as a corroborating opinion. That's the equivalent of getting the ruler of North Korea to give a lesson on human rights.

[Pakboong]

That's gratifying. You made claims, and I refuted them. Can you substantiate your claims? You cited Rense as a corroborating opinion. That's the equivalent of getting the ruler of North Korea to give a lesson on human rights.

There is no question that Madoff is a criminal. In question is who the victims will ultimaetly be. The is no question that Madoff is a brilliant individual and given that, I expect that if he is given a choice between his investors, friends and neighbors as opposed to the nameless, faceless American taxpayer to victimize, is it completely plausible that he would choose the latter. To accept the simple version of this story is in my opinion, foolish. We don't know what the truth is but, it would not hurt to look into other possibilities on nothing more than this man's reputation. He is not a bumbling and fumbling petty crook. He is in fact brilliant.

It is also reasonable to believe that he would protect his two sons to whatever extent possible. He is a crook and a fraudster. A very smart one at that. It is reasonable to expect more deception.

It is more or less a matter whether or not the American Justice system accepts this case as presented or considers a broader fraud.

Everyone is getting bailed out. No reason for his investors not to be among them.

In the mean time. His British investors are lining up to sue.

UK investors are planning legal action against HSBC, UBS, Barclays and Nicola Horlick’s Bramdean fund over advice received before the Bernard Madoff $50 billion (£36.8 billion) investment scandal.

[Jingthing]

Under Bush, the oversight was a joke. That is going to change. It doesn't help the victims though.

[AlexLah]

Expect more "small" money to be transferred, I call it vaporise but Geria does not agree with me.

Another small bundlle somewhere else, missing.

Why?

Expect story's like they spend it on a:

Or some other small stuff.

[OriginalPoster]

That's gratifying. You made claims, and I refuted them. Can you substantiate your claims? You cited Rense as a corroborating opinion. That's the equivalent of getting the ruler of North Korea to give a lesson on human rights.

There is no question that Madoff is a criminal. In question is who the victims will ultimaetly be. The is no question that Madoff is a brilliant individual and given that, I expect that if he is given a choice between his investors, friends and neighbors as opposed to the nameless, faceless American taxpayer to victimize, is it completely plausible that he would choose the latter. To accept the simple version of this story is in my opinion, foolish. We don't know what the truth is but, it would not hurt to look into other possibilities on nothing more than this man's reputation. He is not a bumbling and fumbling petty crook. He is in fact brilliant.

It is also reasonable to believe that he would protect his two sons to whatever extent possible. He is a crook and a fraudster. A very smart one at that. It is reasonable to expect more deception.

It is more or less a matter whether or not the American Justice system accepts this case as presented or considers a broader fraud.

Everyone is getting bailed out. No reason for his investors not to be among them.

In the mean time. His British investors are lining up to sue.

UK investors are planning legal action against HSBC, UBS, Barclays and Nicola Horlick's Bramdean fund over advice received before the Bernard Madoff $50 billion (£36.8 billion) investment scandal.

Or, maybe Madoff is a psychopath who happened to take up finance instead of serial killing. Ted Bundy was quite brilliant too. I don't see where your theory is more plausible than the one that he's a man without a conscience.

Edited January 27, 2009 by OriginalPoster

[Jingthing]

I doubt Madoff is any kind of psychopath. I think he believed his own press releases that he is a super finance genius and perhaps he was (lucky) at some point. Then the social pressure to keep delivering on the myth and he took the moral low ground to keep the ball rolling. It is outrageous that the checks and balances didn't catch him years ago. The way it turned out, what ruined the game for him was the market crash. Who knows how many more years he would have operated this way without it, and so many happy (on paper) investors!

Edited January 27, 2009 by Jingthing

[Pakboong]

I doubt Madoff is any kind of psychopath. I think he believed his own press releases that he is a super finance genius and perhaps he was (lucky) at some point. Then the social pressure to keep delivering on the myth and he took the moral low ground to keep the ball rolling. It is outrageous that the checks and balances didn't catch him years ago. The way it turned out, what ruined the game for him was the market crash. Who knows how many more years he would have operated this way without it, and so many happy (on paper) investors!

It is outrageous that the checks and balances didn't catch him years ago.

My point exactly.

[OriginalPoster]

I doubt Madoff is any kind of psychopath. I think he believed his own press releases that he is a super finance genius and perhaps he was (lucky) at some point. Then the social pressure to keep delivering on the myth and he took the moral low ground to keep the ball rolling. It is outrageous that the checks and balances didn't catch him years ago. The way it turned out, what ruined the game for him was the market crash. Who knows how many more years he would have operated this way without it, and so many happy (on paper) investors!

But the Rense theory being presented in this thead is the whole scam is itself a scam, and that the real scam's endgame is to intentioanally soak the US tax payers and let the investors walk away whole. And the sheeple are just too stupid to see it. Whether or not Madoff feels bad about the whole thing, that scenario sounds like a bit of a stretch.

Edited January 27, 2009 by OriginalPoster

[geriatrickid]

Rather than relying on crackpot theories, how about going to the guy that blew the whistle. Starting in 1999 Charles Markopolos said there was something wrong. He laid it out to the SEC in Nov. 2005. No one listened. The brokers didn't care.

Read it.

http://www.scribd.com/full/9134697?access_...1gf08qx0c966i8w

[hhgz]

"He is not a bumbling and fumbling petty crook. He is in fact brilliant."

Absolutely. There have been "Ponzi schemes" ever since there's been a Ponzi. Many of the Schemes have been based on bilking members of certain religious beliefs. The only things that are different now is the size of the scam, and the fact that the perpetrator has admitted his involvement.

[Jai Dee]

Topic is not related in any way to Thailand.

/Closed.