Unless you've been under a rock since December, "Bernie Madoff" should sound familiar to you. And unless for some reason you didn't watch any news yesterday (shame on you), you know that he was sentenced to 150 years in prison for his crimes. Bernard Lawrence Madoff was born in 1938 into a Jewish family in Queens. He became a stock broker in 1960 when he opened Bernard L Madoff Investment Securities LLC. He started his firm with $5,000 and by the time of his arrest he had swindled about $65 billion out of investors. Huh? What'd you miss? Five things/connections I didn't know. Did you? :
1. According to his sons and the plea deal they made, Bernie confessed his scheme to them after they questioned how he could possible afford to give early bonuses when he couldn't pay returns to investors. They took this information to their attorneys and worked out a deal to turn Bernie in to the Feds. He was arrested the next day. Bernie says he started his scheme in 1991 and worked alone; no one knew it was a scam. If your dad told you he was scamming people and you honestly had no idea and you wanted to do the right thing, I understand going to a lawyer to work out specifics, buuuut a plea deal?
2. Madoff confessed in 2008, but concerns were raised as early as 1999. Harry Markopolos worked for an investment company and his bosses wanted to know how they could match Madoff's returns to compete with him. Markopolos used his mathematical genius to discover that there was no legal mathematical formula that would result in the excellent returns Madoff promised and delivered. He turned his info in to the SEC. Many times.
3. Madoff is said to have run a Ponzi Scheme named after Charles Ponzi who used it when he immigrated to the United States from Italy in 1903. The scheme basically entails paying returns to investors from their own money or money paid by other investors instead of from actual profits. For his crimes, Ponzi served 3 and a half years in federal prison, 9 years in a state prison, and was deported. He made millions in 1920. How much is that worth today?
4. Madoff's 11 charges: securities fraud (investors making a purchase or sale based on false info), investment advisor fraud (advising investors with the intent to defraud them), mail fraud (you can't use the mail system in any way in the commission of a crime), wire fraud (same deal as mail fraud), money laundering (making illegal money look legal by pushing it through "legitimate" channels), false statements (not a lie... a statement that is simply untrue whether you know it or not), perjury (the willful act of lying under oath. see how it's different from the other lying charge?), making false filings with the SEC, and theft from an employee benefit plan. He was sentenced 20 years each for securities fraud, mail fraud, wire fraud, 2 counts of international money laundering, and false SEC filings; 10 years for money laundering; and 5 years each for investment advisor fraud, making false statements, perjury, and theft from an employee benefit account.
5. It was reported in March that Madoff was worth an estimated $126 million plus $700 million for the value of his business. Of course there are many other assets that he has since has to relinquish in order to pay $170 billion in restitution. His wife will get to keep $2.5 million of her assets. His sons are completely untouched. Remember? They had a plea deal...
There's no doubt in my mind that not only did people know he was running game, but that people were in on it, helping and making money off of it. It's been going for almost 20 years. If Harry Markopolos could arrive at his conclusions, surely others had, too. Instead of turning him in, they wanted in on the action. That's feasible to me. Regardless... he doesn't deserve 150 years in prison. A sentence like that is designed to make a point but I think it ends up making a mockery of the justice system. This dude isn't a threat to society. Even if he is a bad dude...
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