Wall Street Veteran Arrested for $50 Billion Fraud Scheme

By Alan Stewart Carl | Related entries in Law, Wall Street

How do you make $50 billion disappear (other than by giving it to AIG)? Well, longtime investment manager Bernard Madoff has done just that. And now he’s under arrest.

Madoff, the former chairman on the NASDAQ, is accused of running a Ponzi scheme with his hedge fund that has cost investors as much as $50 billion in losses. This makes the case one of the largest incidents of fraud in American history.

Apparently, his firm generated very consistent, very high returns for many years in a row. That’s easy to do with a Ponzi scheme. Until, of course, you run out of suckers and the money dries up. If the allegations are true, I hope Madoff goes away for a long time. But, as always, this level of fraud is fueled not just by the huckster but by those who buy into the idea that there’s an easy way to make a buck. If the recent economic crisis has proven anything, it’s that get-rich-quick schemes never work.

This entry was posted on Friday, December 12th, 2008 and is filed under Law, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

5 Responses to “Wall Street Veteran Arrested for $50 Billion Fraud Scheme”

  1. BenG Says:

    Alan; All you needed towards the end of that post was to fade in the music from “Me Against the World” or “I Will Survive” to help make your point!

    Of course ‘get rich’ schemes work – constantly, continually, on every level of the economy. As we speak you or a friend near you is being sold a fake rip-off of a name brand product from a con man on ebay or the like.

    The ironic thing is that enough is never enough and the greed and arrogance of the very rich keeps them coming back for more so this sort of payback is allowed to happen. Problem is, as with the financial bailout, the average taxpayer keeps on having to foot the bill and I’m sure there were some innocent investors of this fund that were hurt very badly that didn’t deserve it.

  2. Alan Stewart Carl Says:

    Ben: Maybe I should have said “never work forever.”

    And what are you saying about the name brand rip-off? Are you saying that $50 Rolex I bought off you isn’t the real deal?

  3. Mark Carruthers, CFP Says:

    Alan – Simple case of ‘greed & fear’. Similar to your post, I penned some thoughts on Mandoff in my blog this morning. He should be tarred and feathered by his clients (along with the SEC). His investors should be reprimanded, or fess up a bit, for lack of due diligence. His acts though are outright fraud and he should be prosecuted.

    Mark Carruthers, CFP

  4. Chris Says:

    So what are you trying to say? People running the financial system are crooks? I never would’ve believed it…

  5. TerenceC Says:

    Well, atleast Madoff was honest about his crimes unlike the host of Wall Street “Titans” who weren’t. Where did all that tax payer money go, and why have none of those clowns been forced into striped suits?

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