Mini-Madoffs: The New Breed Of Downmarket Ponzi Schemers (SLIDESHOW, VOTE)

Bernie certainly wasn't alone. As BusinessWeek recently pointed out, there's currently a "bull market for investment scams."

Ponzi schemes, in which a scam artist like Bernie Madoff uses money from new investors to pay off old investors, are a time-honored tradition. But we've compiled a list of some of the more recent alleged grifters who, while diabolical in their own right, couldn't quite rival Madoff's $68 billion ripoff. The accused perpetrators range from New York society types, to "trans-Atlantic boiler rooms," to a multimillion scam on the island of Kauai. One of them even bankrolled a Paris Hilton movie, which, in retrospect, definitely should have been a serious red flag to potential investors.

Call them Mini-Madoffs. Call them evil geniuses. Or just call them petty crooks. View our slideshow and vote below:

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Marc Dreier, $400 Million Investment Scam

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Vote and Share Choose Your Top 5 Petty Crook Evil Genius Now Make Your Own Top 5 And Share with Your Friends RANK: AVERAGE:  OUT OF 10 Dreier, who pled guilty earlier this year to running a massive investment fraud, stole more than $46 million from clients, according to the New York Times. (The total value of his fraud was put at $400 million). Dreier, a New York lawyer who boasts degrees from both Harvard and Yale, issued fake promissory notes and sold them to investors and hedge funds.

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[Bigidea]

Correction, It is not Mini Madoffs, It should read Many Madoffs, made off with our money.

[DestinationsUnknown]

want more?

TOXIC COMMERCIAL REAL ESTATE- Morgan Stanley Real Estate

'TOXIC REIT' Ponzi scams.

IN 2007,according to a New York Times article citing data from Thomson Financial, there have been $281 billion worth of private equity deals in the U.S. so far this year -- that's triple the amount compared to the same period last year, which ended up breaking all sorts of records.

FORT WORTH, Texas--BUSINESS WIRE--Feb. 13, 1998--Crescent Real Estate Equities Company (NYSE:CEI), one of the country's largest real estate investment trusts, today announced that it has completed the sale of 8 million shares of 6.75% Series

April 2008 - Crescent Real Estate Equities Announces New Earnings Release Date
Explain this sale on May 22, 2007:Crescent Real Estate Equities Co. (NYSE: CEI)

Morgan Stanley Real Estate has agreed to acquire the Fort Worth, Texas-based REIT for a deal that totals $6.5 billion, including the assumption of debt.

Morgan Stanley Plans to Turn Downgraded Loan CDO into AAA Bonds

July 8 (Bloomberg) -- Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.
first transaction of its kind
Morgan Stanley is selling $87.1 million of securities that it expects to receive top AAA ratings and $42.9 million of notes graded Baa2, 2nd lowest investment grade by Moody"s Investors Service,

Texas-based REIT - GW Bush's ex partner- Richard Rainwater

[sposton]

These excesses help legitimize what the mainstream Wall Street operators have done. In fact, there is very little substantive difference. The whole system of phantom wealth ought to be shut down.

[sp1986]

You forgot James Nicholson of Westgate Capital Management. Another loser Madoff wanna be who is currently residing in the Brooklyn MDC accused of stealing ~$300M from friends, family, fellow parishioners etc....

[duxguts]

Until more of these people go to jail, this will continue to happen.

[Lendall]

There is an entire subculture (call it an urban legend, if you will) that is based on the notion that the U.S. government sponsors high-yield investment programs, supposedly to provide liquidity for the banking system. One has heard jabber about this for years by attorneys, investment bankers, brokers, etc. The story is generally the same: These programs have a minimum investment of $10 million. There is elaborate documentation and review by "federal compliance offers." Some percentage of the high returns must be channeled to an approved charity. If pressed, the backers of these programs will tell you that the returns are generated by a process called "forfaiting" and/or by the trading of MTNs (medium term notes). Each "program" has a "trader," who is obscure and secretive. The backers of these programs will often tell you that regular participants even include the families of heads of state, domestic and foreign, and that there is a secret underground of reclusive, hyper-rich individuals who support themselves by investing in these "programs."

Against this background, the returns Madoff was showing on statements to customers must have seemed conservative by comparison.

I am expressing no opinion about any of this, and pass this along merely to contextualize the Madoff story.

[SinfullySublime]

ETA correction: Kim and Esto ran a $70,000,000.00 Ponzi scheme called YMMSS.

[SinfullySublime]

How 'bout Kim Inman? He and Esto ran a $30M Ponzi scheme, back when $30M was a lot of money.

[americaforme]

The scammers went out in full force in the eightys, the problem was it was a ligit accepted way. The seniors being prime targets, everyone had a roll of cash in the banks, and the greedy crooks rescued it from them. Ponsi began in the early sixtys, with Amway, straight out of the conservative church. When Christians do it, it becomes believable, that itself is a scam. Everyone signed up, and got onboard. It was so successfull (Amway) that it unleashed a hoard of new money hungry plastic Christians. While the Hippys were getting spiritual, the plastic part of the church, was setting all kinds of examples of RICH is better. Unfortunatly we all got coerced into a monetary value system. It was the way of life in the USA, wanting more and more. With money the goal in life, cheating became as natural, as peanut butter and jelly sandwiches. I hate to think we were the worlds Pied Pipper, but when we see other countrys greed the bell doesn't ring, it tolls.

[lionzion]

Or call them typical "THUGS"!!

[PhilipTaylor]

Thanks to the Morgan Stanley evidence today this argument is even more relevant:

Their is MASSIVE Evidence the Scheme used by the WSt Bankers was premeditated and therefore HIGH CR!MES were committed!

This was WELL EDUCATED MEN (mostly) making ZERO mistakes except one - They thought they would get away with it! To assume that Masters and PhD level managers simply made some mistakes is naive and irrational.

TWO SIMPLE FELONY FRAUD CHARGES:

1. Premeditated Manufactured Insider Trading
a. Make a lot of Sure Fail Product knowing it will fail
b. Buy Massive A1G Credit Default Swaps which is Betting the SURE FAIL Products will fail!
Make it to fail and then bet it will fail: "Manufactured Insider Trading" 100% sure BET!

2. Misrepresentation of Hugh Risk "FAKE Rated" products as Safe Low Risk "AAA" and sold to victims all over the world!

Both Cr!mes are Felony Fraud and are well documented! They provide evidence for decade or longer terms in Pr!son!

Ask Chef Martha who did next to nothing compared to the $Trillion Scams these Banksters committed yet served years!

[PhilipTaylor]

All these Schemes show how widespread the Unscrupulous Culture of Greed Spread!

It was accepted after the Savings&Loan and ENR0N Scandals that 99.99% of Wall Street R1P-OFFS get away with a hand slap or less so why NOT do it to the American People as it was NO RISK EASY MONEY!

Prosecute all of them or live to see this again very soon!

[Pippilangstrumpf]

If you're referring to Martha Stewart, she didn't do 'years' in jail....she did 5 or 6 months.

[PartyPartyParty]

Where's Jeffry Picower?

http://www.propublica.org/feature/madoff-client-jeffry-picower-netted-5-billion