Madoff 's The Great Ponzi Scheme

Introduction: Bernie Madoff was a well-respected financier, his company Bernard L. Madoff Investment Securities, LLC was very well known and even helped launch the Nasdaq stock market. Madoffs company was well trusted and he even had celebrity cliental such a Steven Spielberg, Kevin bacon, and Kyra Sedgwick. Madoff came from a low income family however, he was able to start his company from getting a $50,000 loan from his in-laws and he using money that he had saved from side jobs such as lifeguarding and installing sprinkler systems to found his company. The successfulness of Madoff’s company came from the company’s ability to adapt to change and us modern day computer technology. As his business grew he stated employing family members to help “His younger brother, Peter, joined him in the business in 1970 and became the firm 's chief compliance officer. Later, Madoff 's sons, Andrew and Mark, also worked for the company as traders. Peter 's daughter, Shana, became a rules-compliance lawyer for the trading division of her uncle 's firm, and his son, Roger, joined the firm before his death in 2006”(Bernard Madoff Biography 2016) Unfortunately on December 11th 2008 Bernie Madoff became well known for a whole new reason. He had been accused of performing an elaborate Ponzi scheme and he had been reported to the federal authorities by his own sons. A year later he admitted to the investigators that he had lost $50 billion dollars of his investors’ money and pled guilty to 11

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.

Madoff required a $100,000 minimum to invest, was by invitation only, and made each client feel like they were his only client (Ferrell, Fraedrich, & Ferrell, 2018). He was a highly successful business man who was respected and trusted for his knowledge of investments. Madoff had clients begging him to invest their money. The reason, he claimed he could make 10 to 12 percent on returns for investors no

Convictions of the Bernie Madoff conspirators prove the Ponzi scheme could not have been the work of one person. Furthermore, the conspirators each played a critical role in facilitating the Ponzi scheme and concealing it from regulators, and auditors. For instance, Annette Bongiorno, was employed for Madoff for approximately 40 years as his secretary (Lappin, 2014). Consequently, Bongiorno was charged with manufacturing the false statements sent to clients that indicated they were worth a lot more than they actually were. Moreover, Bongiorno transferred $50 million of client’s funds into her own private account (Lappin, 2014).

Bernie Madoff was one of the most prolific Ponzi-scheme artists in history. Madoff schemes netted him millions of dollars. Mr. Madoff used his BMIS Bernard L. Madoff Investment Securities a New York Limited Liability company, to commit fraud, money laundering, and perjury. This is just a few things that Mr. Bernard Madoff has done to many innocent investors, who believed in Mr. Madoff, and everything he stated. Due to Mr. Madoff’s action he has changed so many people’s lives. Some have lost everything, some committed suicide, and others just humiliated by Mr. Madoff. This paper is to tell you about Mr.

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

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

Bernie intently accepted large sums of funds from investors with the knowledge that he was not going to make legitimate investments with his the stackholders money. Bernie Madoff’s was conducting his business practices off of maximizing profits for himself over twenty years, which he intentialy defrauded his clients of almost sixty-five billion dollars. It is in my opinion that Bernie Madoff’s apparently knew what he was doing when he was engaging in un-ethical practices. When Madoff pled guilty to all charges in March 2009, which includes securities fraud, mail fraud, false statements, false filings with the SEC, investment advisor fraud, wire fraud, money laundering, and theft from an employee benefit plan, I believe that he completely understood that his scam would be exposed at some time.

Mr. Madoff’s Ponzi scheme took careful coordinating and preparation to last as long as it did and to become the largest Ponzi scheme in history. He used his greed to entice the greed of his investors by offering them unrealistic

Madoff was able to align himself with wealthy individuals, leaders involved in foundations, business entities, and government. This gave him unlimited access to different groups of investors. Among Madoff’s Ponzi scheme victims, it is easy to find wealthy individuals, charitable organizations, and its stakeholders, such as employees, communities, vendors, and even the government.

There are many peculiarities in Madoff's world that contributed towards making his mind’s outcomes so very suspicious. The answer to how Madoff was still able to conceal his fraud can be explainable through his techniques, methods, and darkly hidden tricks that he has been demonstrating throughout his long period of wrongful criminal deception.

This paper introduces Bernard L. Madoff a fraudster who orchestrated a multi-billion dollar Ponzi scheme. The paper discusses elements that make up a Ponzi scheme and explains what a Ponzi scheme is. The paper goes on to introduce some of the victim’s and examines some reasons why someone might fall victim to a Ponzi scheme. The paper describes the three elements making up the fraud triangle and how they relate to the fraud and the fraudster. This paper covers Bernard Madoff’s background and history and how he committed the fraud analyzing the fraud triangle. The paper describes ways to correct the issue, accounting principles violated, and recommendations for a fix. Finally, the paper looks at internal and external controls violated and ends with a conclusion.

A Ponzi scheme can be distinguished as “a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victims into much bigger risks (Unabridged, 2016).” Madoff kept all extra money to expand his business and pay his employees, most of which were his family. The fact that Madoff engaged in a Ponzi scheme ultimately lead to his personal and professional demise. Madoff ended up in jail and his once prestigious company shut

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

The Madoff’s Ponzi scheme had consequences which affected all the society. In pratical terms, those consequeces were extended to assets management firms, commercial banks, financial services companies, charity organisations, among others. It has concerned several parts of the globe, such as the United States, Spain, France, the Netherlands, Switzerland and several others.