Bernie Madoff and the Greatest Ponzi Scheme

844 Words2 Pages
bulb-icon

Recommended: Easy analysis on bernie madoff's scandal

Bernard Lawrence Madoff, the brain behind the largest Ponzi scheme in American history, was born in 1938 during a depressing era. America just went through the Great Depression and was now headed into World War II. The Madoff family were Jewish, and Bernie grew up in a prodominitly Jewish community in Queens, New York. In high school, Bernie Madoff met his future wife, Ruth Alpern. Bernie and Ruth Madoff had two sons, Mark and Andy.
Madoff’s scam started through an affinity bunko scam, which led to an enormous Ponzi scheme. An affinity criminal targets “victims who are linked to them by religion or ethnic background” (textbook, pg. ). The con artist will pay the first group of investors with their own money, while gaining new investors. As the amount of people being deceived increases, the con-artist has more money to splurge on himself; but in order to keep his perpetual scheme going he always needs new investors. Ponzi schemes usually end when too many investors want their money back and the con-artist is unable to pay them all.
Bernie Madoff used his Jewish heritage to connect with other Jews and gain their confidence in him. Bernie Madoff believed in his own power on confidence and convinced his targets that he was rich, powerful, intellegent, and could make them wealthy. It also wasn’t just Madoff’s words that Madoff promised to invest his targets’ money and at first used their own money to pay the investors their interest. After the events of the recent trial, there is evidence to prove that Bernie Madoff’s despicable scheme dates back to the early 1970s, but no one has been able to find an exact time when Bernie began collecting funds for fake investments.
Madoff’s company, Bernard L. Madoff Investment Securities LLC, ...

... middle of paper ...

...raud : The Two-Way : NPR. Retrieved March 28, 2014, from http://www.npr.org/blogs/thetwo-way/2014/03/24/293886296/ 5-ex-madoff-aides-found-guilty-of-conspiracy-securities-fraud
Ross, B., & Schone, M. (2011, October 26). Bernie Madoff and Wife Ruth Attempted
Suicide - ABC News. Retrieved March 28, 2014, from http://abcnews.go.com/
Blotter/bernie-madoff-wife-ruth-attempted-suicide/story?id=14821587
Smith, A. (2013, December 10). Five things you didn't know about Bernie Madoff's epic scam - Dec. 10, 2013. Retrieved March 29, 2014, from http://money.cnn.com/2013/12/10/news/companies/bernard-madoff-ponzi/ Wasik, J. (2012, October 3). Inside the Mind of Madoff: When Did Scam Really
Begin? Retrieved March 29, 2014, from http://www.forbes.com/sites/johnwasik/
2012/10/03/inside-the-mind-of-madoff-when-did-scam-really-begin/

Show More
Related

  • The Ponzi Scheme: Greatest Crimes?

    1653 Words  | 4 Pages

    Middle use the money he was stealing for his personal luxurious lifestyle and also for his family and friends. Invest investigators describe Madoff con game like an inside man. In order to keep his con up he had to "work with others who would help him carry out his complex criminal activity and who he could trust not to betray him"(Lewis, 2013 p.289). He works his family members like his brother Peter who later committed suicide during the trial.

    Read More

  • Madoff's Case: The Madoff Ponzi Scheme In The World

    857 Words  | 2 Pages

    Madoff started the scheme by misleading his clients to think that he was an elite investor because he was on a vast amount of important boards. Many believed the scheme and invested billions of dollars with Madoffs company. He was able to achieve some of the scheming through running his investments through a different part of his business. This was a way for only him to see the investments and the financial reports behind the investments. Bernard Madoff involved people

    Read More

  • The Enron Disgrace

    2858 Words  | 6 Pages

    ...FO at the Houston airport. While Mr. Fastow's parents were undergoing a random search, he stopped to chat with Mr. Schwieger. "I never got an opportunity to explain the partnerships to you," he said, according to Mr. Schwieger. Mr. Schwieger replied, "With everything that has come to light, I probably wouldn't like the answer I would have gotten."

    Read More

  • Reasons behind the White Collar Crimes of Charles Ponzi

    1874 Words  | 4 Pages

    Charles Ponzi was born Carlo Ponzi in Lugo, Italy. His parents were far from wealthy but had an enormous reputation which placed them in aristocracy. From an early age, Ponzi’s mother placed high expectations on him. She had hoped he would restore the family to its former social and financial rank (Zuckoff, 20).

    Read More

  • The Bernie Madoff Ponzi Scheme

    2602 Words  | 6 Pages

    The Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.

    Read More

  • An Analysis Of Ill-Gotten Gains, By Tom Regan

    727 Words  | 2 Pages

    The essay “Ill-gotten Gains” first appeared in a book called ‘Health Care Ethics’ and was written by Tom Regan who is a renowned philosopher, author and animal rights advocate. The essay appeared again in Tom Regan’s best known book called ‘The Case for Animal Rights’ which states Regan’s beliefs regarding animal rights and provides a sound argument as to why animals should not be exploited for our own gain. Tom Regan believes all animal use that benefits humans is morally unacceptable including for food, entertainment, labour, experiments and research. “Ill-gotten Gains” argues that to be on the right moral path we need to view all individuals with inherent value as a ‘subject of a life’. Regan argues that any practice in which a ‘subject of a life’ is used as a resource is immoral, not because of emotion, but because of reason. Any individual with a sense of a future, awareness and purpose is considered to be a ‘subject of a life’ and has equal inherent value. Regan also takes time to explore the argument that humans have souls while animals do not.

    Read More

  • Bernie Madoff

    966 Words  | 2 Pages

    Bernard Lawrence Madoff, better known as Bernie Madoff, was born on April 29, 1938 in Queens, New York. He was a hedge-fund investment manager and the chairman of the NASDAQ stock market. Madoff who was raised in a predominantly Jewish neighborhood went on to continue his studies at the University of Alabama, later transferring to Hofstra University where he earned his political science degree. From there, he went on to study law at the Brooklyn Law School, though only for a short period of time, Madoff founded Bernard L. Madoff Investment Securities with his wife Ruth, in 1960. Considering his many achievements to get where he was at that point in time, Madoff is known best for his infamous Ponzi scheme. His list of clients include celebrities

    Read More

  • The Bernard Madoff Investment Scandal

    2631 Words  | 6 Pages

    Bernard Madoff had full control of the organizational leadership of Bernard Madoff Investments Securities LLC. Madoff used charisma to convince his friends, members of elite groups, and his employees to believe in him. He tricked his clients into believing that they were investing in something special. He would often turn potential investors down, which helped Bernard in targeting the investors with more money to invest. Bernard Madoff created a system which promised high returns in the short term and was nothing but the Ponzi scheme. The system’s idea relied on funds from the new investors to pay misrepresented and extremely high returns to existing investors. He was doing this for years; convincing wealthy individuals and charities to invest billions of dollars into his hedge fund. And they did so because of the extremely high returns, which were promised by Madoff’s firm. If anyone would have looked deeply into the structure of his firm, it would have definitely shown that something is wrong. This is because nobody can make such big money in the market, especially if no one else could at the time. How could one person, Madoff, hold all of his clients’ assets, price them, and manage them? It is clearly a conflict of interest. His company was showing high profits year after year; despite most of the companies in the market having losses. In fact, Bernard Madoff’s case is absolutely stunning when you consider the range and number of investors who got caught up in it.

    Read More

  • Ponzi: The Boston Swindler

    3331 Words  | 7 Pages

    Charles Ponzi was born in Italy in 1882. Born to a wealthy family, Ponzi put off work as long as possible and attended college at the University of Rome. Knowing he was avoiding the inevitable and seeing no appeal in the Italian business world, he immigrated to the United States. In 1903, upon entering the United States at the age of 21, Ponzi proceeded into Canada. In 1909, he was convicted of forgery in events surrounding the collapse of the Montreal banking firm of Zrossi & Co., of which he was a member. As punishment, he was sentenced to a three-year term in the St. Vincent De Paul Penitentiary in Montreal. Released from Canadian Prison after only twenty months for good behavior, Ponzi entered the United States again on July 30, 1910. Within ten days of his release, he violated immigration laws by illegally bringing five Italians over the border from Canada. For this offense, ...

    Read More

  • Essay On Bernie Madoff

    605 Words  | 2 Pages

    Bernie Madoff is one of the greatest conmen in history. The Bernie Madoff scandal takes the gold as one of the top ponzi schemes in America. Madoff started the Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960. Starting off as a penny stock trader with five thousand dollars, earned from his workings as a lifeguard and sprinkler installer, his firm began to grow with the support of his father-in-law, Saul Alpern, who helped by referring a group of close friends and family. Originally, his firm was marketed by the National Quotations Bureau’s Pink Sheets.

    Read More

  • Lack of Ethical Behavior in the Cases of Bernie Madoff and Enron

    669 Words  | 2 Pages

    Bernie Madoff, “a former American stock broker, investment advisor, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in the history of the world”. (Bernard Madoff, 2011, para. 1) Bernie was able to convince investors to give him large sums of money with the promise that they would received between eight percent to twelve percent return a year. Bernie ran a pyramid scheme where Bernie kept the large sums of money for himself, and then he used the new investors funds to pay off the o...

    Read More

  • Remembering the Frauds at Enron and WorldCom

    2739 Words  | 6 Pages

    "This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.

    Read More

  • Fall Of Enron Essay

    1519 Words  | 4 Pages

    Prior to 2000, Enron was an American energy, commodities and service international company. Enron claimed that revenue is more than 102 millions (Healy & Palepu 2003, p.6). Fortune named Enron “American most innovative company” for six consecutive years (Ehrenberg 2011, paragraph 3). That is the reason why Enron became an admired company before 2000. Unfortunately, most of the net income for the years 1997-2000 is overstated because of unethical accounting errors (Benston & Hartgraves 2002, p. 105). In the next paragraph, three main accounting issues will identify for what led to the fall of Enron.

    Read More

  • Essay On White Collar Crime

    1254 Words  | 3 Pages

    Many white-collar offenders may start off as trustworthy, respected businessmen/women in their workplace. Motivated by greed and power, these highly skilled people will use cunning and deceit to earn what they want from innocent people. Some people are very well known through their illegal white collar activities that are brought to light. After a competitor’s representative met with The Securities and Exchange Commission (SEC) with suspicion about Bernard Madoff, founder of Bernard L. Madoff Investment...

    Read More

  • Warren Buffett Case Study

    1809 Words  | 4 Pages

    What is the possible meaning of the change in stock prices for Berkshire Hathaway and Scottish Power plc on the day of acquisition announcement? Specifically, what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp?

    Read More

More about Bernie Madoff and the Greatest Ponzi Scheme

Open Document