PONZI SCHEME: Madoff Charged With Securities Fraud

Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities and a fixture of the Wall Street trading world for decades, was arrested Thursday morning by Federal Bureau of Investigation agents and charged with criminal securities fraud by federal prosecutors in Manhattan.

The criminal complaint filed against Mr. Madoff alleges that he told senior employees Wednesday that his business was "a giant Ponzi scheme," according to a person familiar with the matter. The alleged scheme involved tens of billions of dollars, but the extent of investor losses wasn't immediately clear.

The disclosure came after Mr. Madoff tried to distribute early bonuses to employees of his firm, prompting questions by senior employees, a person familiar with the situation said.

Read the whole story here.

Comments

[LondonTownNY]

As a society we willingly incarcerate individuals for multiple years for minor drug offenses, those where the only victim is the drug abuser himself under an "intent to distribute" ruberic. Such individuals are hardly the type of Menace to Society as are Economic Criminal's like Bernard Madoff. The impact of Madoff's Ponzi scheme in the current economic climate, will be to subject many prominent families to financial ruin. He rips off $50 Billion yet is allowed out on $10 million bail? This seems insane. We as a society need to truly reexamine the impact on our people by those who attain powerful positions of trust and then intentionally, knowingly and willfully abuse that trust in order to afford themselves the trappings of a perversely rich life. HANG EM HIGH I SAY...when enough of these types of people find themselves stoned to death in a public square, their necks hanging from a rope or subjected to electrocution then perhaps the criminals with pens and computers will think twice about destroying the lives of others. Madoff should be given the death penalty. It will never happen in America but this man clearly deserves a fate worse than death. There shall be no redemption for those who have no soul and are completely bankrupt morally.

[KaLaPa111]

How conservatives can continue to push for decreased regulation and oversight is beyond me....

[Samalabear]

Bail out the people, not Wall Street -- the money will be put to good use. And that's all I'll say because so many have written about this in blogs, articles and comments.

[zizyphus]

Haven't I and many others been pointing out for years that our whole financial system is a Ponzi sheme?

As long as we keep electing and re-electing the same crooks who facilitated this bailout for the elite scammers, we will get more of the same. Over 8 trillion has been handed to the various perpetrators so far.

Since Bush scammed his way into office, only the Security industry has prospered. Look in your paper- most of the jobs are security guard jobs. We will end up with half the people (the only employed) spying on the other half (the unemployed) to keep them from rioting and looting. More money for prisons, no money for colleges.

This crook won't do any time. Plus, he has millions stashed in offshore accounts, like the rest of the scammers. Only the working poor are expected to be honest anymore.

I say Let the potheads out of prison to make room for all these corporate theives. If Bush and Cheny are not tried and imprisoned for the most heinous crimes ever perpetrated on the public, then the whole system is lousy, and needs to be remade in a new fashion that doesn't benefit the lying crooks.

[Samalabear]

I say the same thing -- let the potheads out. I've been doing legal transcription for a number of years, with the last several doing criminal sentencing and plea bargains -- lots of addicts and small-time possession and a lot of small-time selling. I gather that many, many of these people would not be in this predicament but for the financial structure in this country since Reagan -- some modification during the Clinton years -- then fueled to all-time highs with Bush.

[ilpostino]

Speaking of Ponzi schemes and money which really isn't there....Check this site to learn more about the Federal Reserve, (which is not part of the “Federal Gov’t” ) and a whole bunch of other stuff that you probably were unaware of. It may change your life. You can watch from your PC. Grab a bag of popcorn and sit back. There is also an addendum dated October 2008.

http://www.zeitgeistmovie.com/

[americanrevolution]

The FBI has plenty of these characters from wall st to put in check.
BRAVO!!!!

[Ray46]

Are whole economy seems to have been based on a Ponzi scheme.

Does this mean he qualifies for some of the federal bailout money?
He could claim that in reality it was not a Ponzi scheme but poor management investment decisions and excessive pay and bonuses for management (himself) that resulted in most of the investor losses; exactly like what occurred with the banks and wall street!

[zenaby56]

This man needs to suffer bigtime for his crimes. I mean suffer. Lives are being destroyed! I wonder if anyone ever considers those who may have committed suicide because someone like this set up conditions to destroy the livelihood and options for regular people. Anyway, lives have been destroyed and he needs to be held responsible in meaningful way!

[DianeTreehugger]

As a former institutional investor, let me say, it's ALL a Ponzi scheme. And a zero sum game. If anyone is making obscene amounts of money, someone else, likely many someone elses, are getting ska-rewed. You check your soul at the door.

[MissingAmerica]

What amazes me is that these are the people Washington is "bailing out". The financial ship is sinking because people like these drilled holes in it, yet the government wants to plug it up with our money. At the same time, Detroit has been hurt largely because of so much of the industry being moved to China and the industry here has been concentrating on building what it can because it doesn't have the money to build what it should. Yet the government doesn't want to "rescue" them. Nor does it want to rescue the people who were bilked on home loans with hidden fees, yet it gives millions to bail out the companies who sold them the snowballs.

Much like these industries, Washington needs a complete overhaul.

[Peter007]

You might want to do a little research about the Federal Reserve. You know, those pieces of paper in your wallet. Those notes. ( I.O.U.s). Those notes have lost 95% of their value since they were first issued in 1913.
The federal government is always borrowing money ( Treasury Bonds ) and paying the note holders back, not with earnings, but with new paper they are printing. In a Ponzi scheme you pay your note holders back with new investors money. It's easier if you can print the money.
The Fed isn't really bailing out the banks. They are bailing out the entire financial system. If it doesn't work, the house of cards will come tumbling down. Voters won't like that.

[ProfessorDuh]

Hardly news. The whole of the "deregulated" U.S. financial industry turned out to be one giant Ponzi scheme.

[JamesInDenver]

There should be a death penalty for crimes like this. The penalty should not be 5 years in a minimum security "country club" prison.

[Egalitare]

No.

Bring back long term sentences to HARD LABOR.

[imusintheevening]

Either way, I like the way the Chinese invoke both on fraudsters, meanwhile we send them to Club Fed.

[JamesInDenver]

You have to wonder how many of these schemes go undetected. How many brokers get rich doing this?

[Samalabear]

I have a feeling we're about to find out.

[Boringat]

May God smite him in the foreskin..­........oh­...... too late.

[atlantajoe]

Some of the screen was not legible, were they talking about social security, I just caught the part about a Ponzi scheme.

[FogBelter]

No, they were talking about the pipe dream that is Wall Street.

[krabby]

That's 3Xs more than the Big Three are asking for. How about taking it from this guy?

[Peter007]

If you read the article, it says the money was lost. Its like buying GM stock at $50.00 and now its worth $2.00.. ... Poof ...gone......

[LHoney]

Give me a break - this guy's got BILLIONS stashed away somewhere...

[amiblueyoubet]

So I pay $500.00 for 10 units of stock, now it's worth $20.00, where did my $480.00 go?