The Ponzi Scheme

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

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).

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

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.

In the 1960s Bernie Madoff was hard worker known for creating one of the largest buying/selling market in NASDAQ. He rose from a penny stock trader to becoming a stockbroker, financial advisor, then chairman of the NADDAQ. But, from December 11, 2008 to present day, Bernie Madoff will be remember in history as the man who pull of the largest Ponzi scheme. Madoff was to make $50 billion disappear in this scheme, by using new investors’ money to pay out old investors. After numerous tips about how Madoff conducted business the Securities and Exchange Commission (SEC) chose to investigate. The SECs investigation included searching through fabricated trading records of which no evidence was found to support the claim. It wasn’t until another

There is very little in the way except conjecture as to the motivation to why Madoff committed theses frauds for so long, and it appears that he is not telling either except that in 2009 where he said that in 2008 when admitting to his sons that his whole business was “just one big lie” to which the next day Madoffs sons reported him to authorities that led to his subsequent arrest. It seems as though it was not an attack of Madoffs conscious that led him to the confession, but it was because of the nature of how ponzi schemes work where the bulk of investors comprising the lower segment of investors pay for the few higher investors profits, which eventually there is no money left to pay back the vast majority of lower tier investors any profits since really the only money involved is the deposits from these investors themselves and not interest earned or investments (Henriques, 2009).

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

David Friehling will quite possibly be a future case study in auditing textbooks and courses throughout the United States. Mr. Friehling was the auditor for Bernard Madoff, who was recently convicted of running the largest Ponzi scheme ever uncovered through his business, Bernard L. Madoff Investment Securities, LLC (BMIS). Mr. Madoff claimed to actively oversee more than $65 billion in private investments (it was later revealed that roughly $823 million remained of the more than $170 billion that went through his accounts over the years).(1) Mr. Friehling flagrantly and purposely violated provisions of the American Institute of Certified Public Accountants’ Code of Professional Conduct,(2) Generally Accepted Auditing Standards,(3)

To combat this assumption it turns out large amounts of money of the value of $300million was invested in Bernard Madoff accounts in the form of pension funds. Some officials knew that the unscathed performance of Madoff securities were too good to be true as their prices consistently climbed up in spite the financial crisis. However, still they pawned its own shareholders’ funds with the hopes of jumping on the same band wagon as Madoff and reaping further profits. Another angle at probing the case was that the CEO, directors as well as executives were only looking out for themselves. Evidently they had direct benefits in the form of handsome compensation packages for retaining high profile clients such as Madoff and Wise which

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.

With early school start times, students tend not to have enough sleep. National Sleep Foundation and American Academy of Pediatrics recommend an eight to ten-hour sleep, which is sufficient. However, 69 percent of the students in the United States sleep less than eight hours per night, which is insufficient. It affects students negatively through health, behaviors, and grades. The lack of sleep promotes students to become sleepy, defenseless, and lead to the inability to concentrate, which may cause injuries and lack of knowledge in school. This dilemma has been around for years and years in the United States. Schools should start later to avoid this dilemma because it provides students with more time to sleep and an efficient work-and-rest

The Bernie Madoff scam truly made history. Bernie Madoff probably would not have been able to prolong this scam without the continued help of the Accounting Firm of Friehling & Horowitz CPAs PC, who at last reported purported to audit financial statements and disclosures of Madoff firm for the last 17 years. Ponzi schemed to help Madoff by trying to go undetected because of Friehling deceiving investors and regulators by declaring that Madoff enterprise had clean audit records. Ponzi’s scheme enabled Madoff by falsely stating in annual audit reports that F & H audited Madoff financial statements pursuant to GAAP, including the requirements to maintain auditor

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

All family members denied knowing about Madoff’s money scam. The negative effects on the family were horrendous. One of his sons killed himself, and the other changed his name due to his damaged reputation. Madoff’s wife gave her assets to federal prosecutors, leaving her broke. Madoff went to prison for 150 years in prison, and his entire family was left fighting a $200 million lawsuit filed by Irving Picard, his bankruptcy trustee. Madoff admitted that when he started committing the fraud, he was desperate for money and thought he could get back on track, but things quickly spun out of control (Ferrell, Fraedrich, & Ferrell,

We chose Bernard Madoff’s case because we thought that we could relate his case to many unethical behaviors. The analysis can be made on decision making and lack of ethical training which we think is an important topic to focus on this course.