Speakeasy forum

General discussion

Bernard Madoff made off with 50 Billion dollars, and

by Ziks511 / December 13, 2008 12:24 PM PST

apparently little of it is recoverable, or so early media reports suggest. He confessed to his family who subsequently called the police. He even made a video for investors saying that embezzlement was impossible in the current regulatory environment. Apparently this is the largest Ponzi scheme in history, where early investors money is pocketted by Madoff, and profits were distributed from later investors.

Rob

Discussion is locked
You are posting a reply to: Bernard Madoff made off with 50 Billion dollars, and
The posting of advertisements, profanity, or personal attacks is prohibited. Please refer to our CNET Forums policies for details. All submitted content is subject to our Terms of Use.
Track this discussion and email me when there are updates

If you're asking for technical help, please be sure to include all your system info, including operating system, model number, and any other specifics related to the problem. Also please exercise your best judgment when posting in the forums--revealing personal information such as your e-mail address, telephone number, and address is not recommended.

You are reporting the following post: Bernard Madoff made off with 50 Billion dollars, and
This post has been flagged and will be reviewed by our staff. Thank you for helping us maintain CNET's great community.
Sorry, there was a problem flagging this post. Please try again now or at a later time.
If you believe this post is offensive or violates the CNET Forums' Usage policies, you can report it below (this will not automatically remove the post). Once reported, our moderators will be notified and the post will be reviewed.
Collapse -
(NT) Thanks Doug. Sorry for the delay -- R
by Ziks511 / January 4, 2009 4:13 PM PST
In reply to: There's a link here:
Collapse -
From the blog you cited:
by Paul C / December 16, 2008 8:06 PM PST
Considering Madoff was a very generous contributor to Lautenberg, Charles Schumer and Charles Rangel, among others, it's no wonder the media is avoiding any connection between Madoff and Democrats.

I recall Schumer milking Enron and Ken Lay for years. He seems unusually silent that one of his big bucks contributors has just pulled off a global scam of epic proportions.

Chuckie always has a Sunday press conference. What will it be about today? Being he's touted as a champion of consumers, what about all those bilked by his big bucks donor? Will he be urging a bailout of all those swindled by Madoff?

He's a member of the Banking and Finance Committees and this happened on his watch. Stay tuned.


Just as the media has allowed Barack Obama to tap dance around the connections between himself and Rod Blagojevich. Instead, they're trying to blame George Bush.
Collapse -
I wish somebody responsible and trustworthy would assemble
by Ziks511 / December 15, 2008 10:04 AM PST

all the costs of business chicanery, fraud, theft and other misappropriation, and compare it with the cost of Welfare and Unemployment Insurance. I am quite convinced that the cost of business crookedness would far outweigh these programs that are so reviled by the right as drags on the economy and free loaders.

I never hear any right wingers revile the CEO's huge bonuses while their companies are failing to show profit, let alone going down the tubes. I never hear complaints about Charles Keating and the Savings and Loan folks who gutted their companies and embezzled billions. I never hear any complaints about all the crooks from Enron, or all the executives who conspired to create the current Economic disasters.

Is it that you expect people to steal, and feel it doesn't matter? Is it that if you're rich enough your crimes aren't crimes anymore, or aren't worthy of comment, but are merely the cost of business.

It should actually be pretty easy to work out approximate figures for both sides of the equation, I just don't have access to that information..

I keep suggesting that the best period of economic growth ran from 1945 to 1972, during which period taxes were low on the lower and middle classes and high on those who earned the most. Consumption of American made goods were high, which is what happens when the lower and middle classes have money to spend. Now production has moved outside the US, but a modest import tax would help correct the cost of imports and would help to turn people toward the American product.

I was riding with my furniture-owning friend today, and he was commenting on how the purchase of automobiles had changed, moving from a new car every 2 years in the 50's to a new car every 10 years. That is a tribute to the design and engineering of General Motors (he was driving an Impala) and to the performance of the United Auto Workers, and all the other manufacturers and workers on domestic cars.

I may be repeating myself, but Ford UK had this great car, called the Ka which looked like the VW Bug for the new millennium, but it never was imported into the US. It offered everything, fuel efficiency, motorway speeds, manoeuverability, and a great price.

Now if it took us from 1960 (I'm using that date because of the VW Beetle sales and the beginning of the Japanese assault) until 2000 to screw things up, it'll probably take 25 years to fix it, but if the US as a whole would make a concerted effort, with strict limits on compensation based on company performance and the over-all economic performance. It's a situation that can be turned around, so long as perfidy and greed are removed from the marked.

Adam Smith wrote the Wealth of Nations, Robert Reich wrote The Work of Nations addressing many of the things left unaddressed by Adam Smith. Nobody lives on an economic manual more than 200 years old, not even Marxists, in fact does anybody believe in strict Marxism anymore? But lots of people quote Adam Smith as though it were Scripture inerrant and unquestionably perfect.

Now all of this is about Economics. Right and Left embrace opposing economic principles but I'm asking for a conversation about economic realities which face us in the next 25 years. Without a manufacturing base, the US becomes a service economy. If the economic and administrative classes continue to suck all the money out of the system, then more economic chaos and uncertainty will prevail, and the US will become a former great power.

Rob

Collapse -
You seem to be saying that only rich business people
by Kiddpeat / December 15, 2008 12:05 PM PST

are thieves and charlatans. You seem to be missing most current events. The government employees that run those welfare and unemployment programs are equally dishonest. So are the politicians, and the lower and middle classes. All of those groups are equally populated by thieves. You won't find many heroes.

Oh, Keating? If my memory is correct, he went to jail. What more did you want to happen to him? Many people did make a lot of money in the S&L fiasco. There was one interesting deal called Whitewater. Perhaps you've heard of it? That could be one reason you don't see a lot of outrage.

Collapse -
Response
by JP Bill / December 16, 2008 4:11 AM PST
So are the politicians,

government employees that run those welfare and unemployment programs

and the lower and middle classes.

All of those groups are equally populated by thieves

There was one interesting deal called Whitewater.



Was there some reason you chose Whitewater as an example?

It's those darn "humans"?

It's those darn "humans" that belong to a certain political party?
Collapse -
My point was that wealthy criminals do greater damage than
by Ziks511 / December 17, 2008 8:02 AM PST

mere receivers of public assistance, even when they are dishonest. I see no reason to assume that administrators of Welfare or Disability Benefits are corrupt. They don't benefit from disbursing funds they would already be giving out. Do you have any examples of Administrators of Welfare or anything similar being charged with unlawful disbursement or bribery by people they were paying?

The Madoff situation was apparently deliberately not investigated by the SEC, they declined to forward the allegations to Washington.

Just as an example of the preferential treatment Madoff was charged in a scam making off with $50 Billion, his bail was set at $10 million. Now if you write that down on a piece of paper, it indicates that if he'd made off (so to speak) with $50,000 then his bail would be $10. That's it, Ten bucks. The more you steal, the less your bail, and seemingly the less your sentence, usually at Club Fed. I think that the tender treatment of big white collar criminals is blatantly unfair. I wish Keating had been put in a cell with a 300lb gang member, just to ensure that he understands that he did something truly heinous that cost people their pensions, their savings, some of them perhaps their lives. Same thing is true of Enron destroying peoples' lives, but being sent to minimum security.

Rob

Collapse -
Bail is not based on how much you stole.
by James Denison / December 17, 2008 2:21 PM PST

It's based on your ability to post it. Also white collar criminals get easier treatment because they aren't using weapons and putting lives at immediate risk while stealing the money. It's just like an armed robber gets more time for the $50 he stole off someone than a burglar who maybe made off with a few hundred, but while no one else was around. We really need two types of prison systems, one for the violent and one for those who aren't violent, but have comitted other types of non violent crimes.

Collapse -
I find myself conflicted here. On one hand I agree with you
by Ziks511 / January 4, 2009 3:28 PM PST

that violent offenders should be in one sort of institution and non-violent offenders should be in another. On the other hand people with the resources of Madoff have fled the country: Bernard Korfeld is the classic example.

Part of what I was looking for in that critical unbiased assessment was just how many people whose life savings get snatched commit suicide in despair after their resources get heisted. At that point it ceases to be a simple stealing and becomes something worse, "reckless endangerment" which is I think second degree murder.

Besides, if you are charged with stealing 20 or 30 million, surely you can pay more than a million bucks. Of course there's the innocent until proven guilty argument but the issue is to ensure the person shows up for trial. I hear Argentina is very nice this time of year.

Rob

Collapse -
Not only did Madoff send more than a million dollars in
by Ziks511 / January 8, 2009 9:56 AM PST

jewellery out of the country (according to CBS, much of it recovered) he also had $173 million in cheques in his office in information released today by the prosecution, to distribute his gains among family members, friends and employees. The prosecution is arguing that both of these things breach the conditions of his bail.

Not that I foresaw this in detail, but I certainly expected him to do a Bernie Kornfeld and skip the country. Apparently he was more concerned with getting his assets out of town instead of his ***.

Rob

Collapse -
Those who cheat the welfare system are far worse.
by Kiddpeat / December 17, 2008 11:55 PM PST

That's because their numbers are far larger, and are largely hidden and unreported. If you don't know that government employees are ripping off the system, then you aren't keeping up with the news. A case in point is the current governor of Illinois. Another is the previous governor of Illinois, and all the lower level state employees which advanced his schemes. Then, there is the President of the Cook County Board who is jacking up taxes to support himself, his relatives, and his friends. It goes on and on.

This Madoff, as far as we know, has not hurt the common person. He has hurt the extremely wealthy. It's rich to see you condemning a guy who ripped off the wealthy. That's not the kind of guy who really impacts society. The kind of guy who really hits us is the common guy who rewards himself and his friends in numerous ways. That hits us because that kind of guy occurs in large numbers. Something like the UAW in Detroit which has jacked the price of cars out of sight for the past several decades.

Collapse -
He did hurt "common" people
by critic411 / December 18, 2008 12:42 AM PST

There were a lot of charities that lost out on this scam.

BUT, there should have been much more diligence paid to the details by those charged with investing that money.

Collapse -
I'm not defending this creep.
by Kiddpeat / December 18, 2008 3:28 AM PST

My sincere hope is that he becomes penniless, and spends many years in prison.

I'm pointing out that this behaviour does not exist solely, or even primarily, among the rich. I'm pointing out the error in the proposition that the lower and middle classes do not exhibit the same behaviour. I'm also pointing out the error in saying that the same behaviour does not come from the government.

The charities have been hit mainly because the rich were hit. If the rich are the source of evil, how is it that they are funding all these charities?

However, unless new details emerge, it doesn't look like he hit pension funds or 401Ks where the common person would be hit. It looks like it was the rich, "in crowd" that were hit the hardest.

Collapse -
RE: price of cars out of sight.
by JP Bill / December 18, 2008 3:42 AM PST

Something like the UAW in Detroit which has jacked the price of cars out of sight.

Got a car?

For me, a ride on the Vomit Comet is out of sight, but I can afford a car, NOT a Ferrari, but "a car".

Collapse -
How many welfare cheats does it take to steal 50 million?
by Ziks511 / January 4, 2009 4:11 PM PST

If you add up all the scams from the S&L crisis forward (just an arbitrary beginning) including Enron and all the Banks that had to be rescued with taxpayer funds, and Bernie Madoff too, then I suspect that it would far outstrip Welfare fraud.

You talk about Illinois well known penchant for criminal enterprise among it's politicians, most of whom are Democrats as if it is part and parcel of Welfare fraud. It's not. They're two different things. Party fraud enriches the individual and in a peculiar way strengthens the party. Now don't go attributing approval of that circumstance to me. I don't approve and I wish all the crooks would turn green one morning, so we could see who they all are. I am saying that somebody who defrauds welfare for whatever the average dollar value each individual makes off with steal less than the accumulation of big crooks handling big sums of money.

Gail Sheehy did an early book on the Welfare Hotels of New York City. It's a crazy system where a lot of wealthy people own these horribly run down places from which they get the housing allowance directly from the State and City Governments. Were a similar amount of money funnelled into public housing, they could be housed much cheaper and in more sanitary conditions, but there is not public will to change the system so the owners of the Welfare Hotels go on collecting their money, and those on Welfare continue living in roach and rat infested buildings where maintenance is usually forced by city ordnance. If their inhabitants had the choice of moving to a better building then maintenance would be a priority, but once assigned to an address the welfare recipient, short of winning a lottery, from which previous Welfare payments will be deducted, are essentially locked in.

I think your antipathy to unionization in general and to the UAW speaks for itself. The problem with the car companies is that they have abandoned large segments of a constantly fragmenting business to competitors. There's no reason GM couldn't have come up with a Prius, but American Automakers have been wedded to the "Bigger is Better model all the way from the 50's to the Hummer. They also were so accustomed to automatic repeat business that their product reliability was once totally wretched.

I was talking this over with a friend up here, and in the 1950's both his father and mine got a new car every 2 years. That wasn't a choice, the cars became too expensive to repair constantly. He now drives a Chevy Impala, and has been driving it for 7 years and has had absolutely no trouble with it. His next car will be a hybrid in 2 or 3 years. Now reliability is a good thing for the consumer, but a bad thing for the Auto Companies because they sell less product.

And maybe I'm crazy but when I look at cars, they all seem to gather around certain price points. I don't see Amercan/Canadian made vehicles as wildly over-priced, but I do see Japanese cars that look better at the same price point. But just to avoid the expected repercussions I live in a city with one of the finest Public Transit Systems in the world, and that's my means of getting around. There's also the option of ZipCars and other short term rental places where you can get a car for 3 hours to do the difficult shopping, or you can take a taxi.

Rob

Collapse -
You just described.....
by James Denison / January 4, 2009 9:17 PM PST

...exactly what Obama was doing in Chicago while a community organizer, in a way.

"Gail Sheehy did an early book on the Welfare Hotels of New York City. It's a crazy system where a lot of wealthy people own these horribly run down places from which they get the housing allowance directly from the State and City Governments. Were a similar amount of money funnelled into public housing, they could be housed much cheaper and in more sanitary conditions, but there is not public will to change the system so the owners of the Welfare Hotels go on collecting their money, and those on Welfare continue living in roach and rat infested buildings where maintenance is usually forced by city ordnance. If their inhabitants had the choice of moving to a better building then maintenance would be a priority, but once assigned to an address the welfare recipient, short of winning a lottery, from which previous Welfare payments will be deducted, are essentially locked in."


You can find the information about the housing area he was supposed to help get funding and how much was given and how little it did for the residents and the buildings and how they appeared later after all that money was poured down....somewhere.

This is an eternal problem where you have the government spending money on behalf of citizens, many who aren't helping the govt keep accurate track of the funds, and are in need of help specifically because they've clearly shown they don't have the personal responsibility to deal with such in the first place. So, others are given the responsibility to act on their behalf and some of them take unfair advantage of that situation for their own personal gain, all at taxpayer expense.

Jesus probably put it best when he said, "The poor will be with us always".

Collapse -
There are college courses in ethics.
by Angeline Booher / December 16, 2008 3:41 AM PST

There are graduate school courses in ethic, like business ethics.

Those who are religious are taught moral values. Those who are not aver they also live their lives by a good value sustem.

When we hear of a person doing the "right things", we are pone to say that he/she was "raised right".

Even with all of these positive influences we continue to get the Madoffs of the world. I sure don't know why, but there have always been those who play the system. This guy knew "important people" who relied on him, which must have stroked his ego. Coupled with his own greed and being armed with what he thought was a perfect plan, he rode the rocket for a long time.

To sum up, Rob, IMO there is no way to guarantee another Madoff won't come down the pike. People want to make a return on their money.

Angeline
Speakeasy Moderator

Collapse -
Speaking of greed, Angeline,...
by Paul C / December 17, 2008 7:53 PM PST

...what about the greed of those Mr. Madoff swindled? It seems to me that every time a Ponzi scheme like this unravels, we discover that the people who gave their money to the scammer were expecting a return on their investments which was all out of proportion to reality and far in excess of what might be expected from such investments.

This is not an effort to excuse Mr. Madoff for his criminality. It is an attempt to point out that when P.T. Barnum famously said that "there's a sucker born every minute," he was quite right, and that it's people's greed that make them suckers.

It takes two to tango...

Collapse -
I agree completely.
by Angeline Booher / December 18, 2008 1:03 AM PST

What's that axiom, "If it sounds too good to be true, it probably isn't".

Angeline
Speakeasy Moderator

Collapse -
No, the tag line is "it probably is."
by Kiddpeat / December 18, 2008 3:47 AM PST
In reply to: I agree completely.

You see, it doesn't really work when you say "it probably isn't".

Collapse -
We little folks always get warnings
by drpruner / December 20, 2008 12:05 AM PST

(from the same big folks in business and gov't now blushing) that "Too good to be true probably is." That has meant 20% earnings "guarantees", for instance. It seems the Madoff dupes were getting 10%, but regularly, regardless of market performance. In their league, I believe, that should have been a Ponzi flag.

Collapse -
Another axiom....
by EdHannigan / December 20, 2008 12:13 AM PST

"You can't cheat an honest man."

Collapse -
I don't know the actual source of that,
by drpruner / December 20, 2008 12:35 AM PST
In reply to: Another axiom....

but I always associate it with W.C. Fields! Care to reconsider? Happy

Anyway, it's true about many scams, but not e.g. about telling a little old lady to draw out money 'to check the honesty of the tellers'.
I could excuse the charity money managers, since charities are always more desperate for money than most, so they're more vulnerable. However, their managers are hired for management expertise, not soup line experience, so they should have known better.

BTW let's not forget 'almost a decade of warnings'. Maybe some of those came from hard-working managers- the big news will be 'who knew and when' at the SEC.

Collapse -
Telling a little old lady...
by EdHannigan / December 20, 2008 1:58 AM PST
to draw out money 'to check the honesty of the tellers'.

That's why I specified, "You can't cheat an honest man."


(JOKE! JOKE!)
Collapse -
Man, that 's cold!
by drpruner / December 20, 2008 2:47 AM PST

Oops ... let me scroll down a bit ... Happy

Collapse -
Hence regulation of investment which used to exist but
by Ziks511 / January 4, 2009 3:32 PM PST

doesn't seem to any more.

Rob

Collapse -
Responsible AND trustworthy?
by Dan McC / December 19, 2008 2:48 PM PST

Where have you been???

Give it a few months and ask again.

Dan

Collapse -
Heard on TV
by Willy / December 16, 2008 4:19 AM PST

I heard on TV from a brokerage pontiff that those that made "profit" and closed their acct. maybe years before *may* have to return the profits. Now, how in the heck can they do that when they had no idea and certainly weren't part of the scam as least willingly. That's a slap in the face for those that simply got out for whatever reason and felt were done with it.

Again, where were regulators no where to be found? AND the last time he was audited was like in '99,. hey, its 2009, don't they do this more often? Afterall, this is seriously amounts of money. Watch, this sucker won't service much time and be allowed to leave when convicted. -----Willy Sad

Collapse -
Good guess.
by drpruner / December 16, 2008 12:21 PM PST
In reply to: Heard on TV
SEC chairman says agency failed to probe Madoff
"WASHINGTON - Securities and Exchange Commission chairman Christopher Cox said Tuesday his regulatory agency repeatedly failed for at least a decade to pursue allegations of wrongdoing by Wall Street figure Bernard L. Madoff, the alleged perpetrator of a $50 billion pyramid scheme."
http://home.peoplepc.com/psp/newsstory.asp?cat=TopStories&referrer=welcome&id=20081216/494735d0_3421_1334520081216243678368

So, there were some who knew enough "for at least a decade" to 'allege wrongdoing'. And others, no doubt, who knew but cashed in instead.

Popular Forums

icon
Computer Newbies 10,686 discussions
icon
Computer Help 54,365 discussions
icon
Laptops 21,181 discussions
icon
Networking & Wireless 16,313 discussions
icon
Phones 17,137 discussions
icon
Security 31,287 discussions
icon
TVs & Home Theaters 22,101 discussions
icon
Windows 7 8,164 discussions
icon
Windows 10 2,657 discussions

FALL TV PREMIERES

Your favorite shows are back!

Don’t miss your dramas, sitcoms and reality shows. Find out when and where they’re airing!