Bernie Madoff's Ponzi Scheme

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In December 2008, one of the largest Ponzi scheme surfaced when Mark and Andrew Madoff reported the works of their father, Bernard Madoff to the federal authorities. A Ponzi scheme is an investing scam that promises high rates of return with little risk to investors. The operator generates returns for older investors by gaining new investors. Bernard was arrested on December 11, 2008 and charged with securities fraud. He pled guilty to 11 counts and was sentenced to 150 years in federal prison-the maximum possible prison sentence. A reported $17.3 billion was invested into the scam by Bernie’s clients and only about $2.48 billion have been returned to these victims as of September 2012.

Judge Denny Chin presided over the Bernie Madoff Ponzi scheme case where Madoff was sentenced to 150 years in prison. “The penalty sparked a burst of applause in a courtroom packed with victims of the fraud.” (Frank). Mr. Madoff ruined hundreds of lives that put their life savings and trust in his hands. Bernie expressed remorse after fraud victims address their concerns in the courtroom in regards to massive Ponzi scheme. Friends and family were not there to support Madoff in his day of sentencing and remain inadequate of further information of details about the fraud. Bernie Madoff is believed to have betrayed everyone including his two sons who work for the investment firm. Rich and poor people alike shared in this despair after all of their

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

At first, Madoff was in a broad sense unusual Ponzi manipulator. The extraordinary model was social, connecting with, and set out to bewilderment others with his cerebrum, his thoughtfulness, his thriving. Madoff sharpened a sort of energized spirit about his character, turning that radiant speculation that people would overlook: He won trust not by endeavoring to influence people that he was gorgeous making to move, yet expected that they were well-known. People who may never have fallen for the excellent Ponzi progressive were totally debilitated by Madoff's hypothesis.

Bernard Madoff founded Bernard L. Madoff Investment Securities in 1960, with an investmento of only $5,000 earned as a beach lifeguard and a lawn sprinkler installer. He was seen as a genius and the most sympathetic and friendly broker in the country. Madoff became the responsible for the largest financial scam in history after applying the most jaded of financial scheme. A stroke of billions of dollars and harmed many customers. But after 20 years of this scam, he admitted having ridden a giant pyramid scheme type after being arrested. The scheme is to pay older clients with money from new investors, without producing real income. Madoff even became chairman of Nasdaq, the

Introducing Bernard L. Madoff born April 29, 1938 in Queens, NY and is presently serving a one hundred fifty-year prison sentence. Who is this fraudster Bernard L Madoff also known as “Bernie” and what fraud did he commit? Bernie’s parents Ralph and Sylvia Madoff were Polish immigrants struggling and working during the Great Depression Era. In later years, his mother worked in finance as a broker-dealer for their company Gibraltar Securities. The SEC eventually forced the business to close due to non-reporting issues regarding the businesses financial condition. Around age twenty-two, Bernie Madoff started his own investment firm Bernard L. Madoff Investment Securities LLC and was

Bernard Madoff was an investment advisor and former chairman of NASDAQ and he was most famous for perpetrating the largest Ponzi Scheme in history. In 1960, Bernie founded Madoff Investment Securities, LLC, and his firm was one of the first to use computer technology to trade. They specialized in over the counter stocks. He grew his company by networking and got his family involved in running the company. His first clients were people in his neighborhood, and people who went to his same church.

Madoff Investments Securities was founded by Bernie Madoff and believed to be run honestly until 1987. After the crash of the stock market, Black Monday, Bernie needed to improve business and satisfy his greed or avarice. To satisfy his avarice he set up a Ponzi scheme by methods previously listed and forged documents to make all seem fine. The scheme ran successfully for years before Madoff admitted to his two sons and employees on December 10, 2008. His sons, horrified by the allegation uttered by there father, turned him in to the police on December 11, 2008.

Bernie Madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the New York Stock Exchange (NYSE). From the 1960’s through the 1990’s, Madoff’s success and business grew substantially, mainly from a closed circle of known investors and friends through word of mouth. In the 1990’s Bernard L. Madoff Investment Securities traded up to 10 percent of the NASDAQ on any given day. With the success of the securities business, Madoff started an illegal money-management business, promising his investors consistent returns from 10-12 percent, unheard of returns at the time, which should have tipped off most investors that something was amiss.

The Bernie Madoff case was the largest dollar amount and longest running fraudulent Ponzi scheme identified to date. Madoff has admitted that the fraud started in the early 1990s and ran for 18 years before it was above his head when the economic depression set in and investors began to request payouts.

In essence, the majority of the people who fall victims to cases of fraud are the successful and sophisticated as well as educated individuals (Biegelman, 2013). The persons are easily taken advantage of due to their status in society. Most of them will most likely not talk about a case of fraud if they fall, victims, as they will not want to be viewed as anything other than triumphant. This fact that the thriving people in society want to remain and be seen as successful is what Madoff used in convincing investors to sponsor his Ponzi scheme. Also, Madoff is most likely to have relied on investor’s psychology such as blindness of the sponsors (Carlson, 2015). The majority of the investors must have been reading the newspapers rather than following

“A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors” (Ponzi Schemes 2013). Ponzi schemes enable fraudsters to approach victims and solicit funds from them by guaranteeing that their low risk investments will yield high rates of return. In return, investors receive dividends paid by the fraudster from the funds solicited from newer victims. The attraction of new victims enables the fraudster to make dividend payments to his or her older investors, which stimulates the legitimacy of the investment company. A prime example of a Ponzi scheme is Bernie Madoff and Bernie L. Madoff Investment Securities. Over a period of twenty

Operated through a complex, cryptic structure Bernie Madoff, CEO of Bernie L. Madoff Investment Securities (BMIS), perpetuated the most embellished Ponzi scheme the world has ever seen. The basis of the securities fraud that took place approximately between 1991 – 2008 was influenced by Bernie Madoff’s reliance upon an unqualified staff, outdated software, organizational seclusion, a personal halo effect, and weaknesses in the regulating body. Madoff had the confidence of the public, yet to pull off such an elaborate scheme, he relied on a startling number of family members, vital accomplices working on the illegal trading floor such as Frank D. Pascali, IT staff members, and a separate BMIS branch of international employees

On Dec. 11, 2008, Bernard Lawrence Madoff confessed that his vaunted investment business was all "one big lie," a Ponzi scheme colossal in volume and scope that cost investors $65 billion. Overnight, Madoff became the new poster child for Wall Street gall, greed and