What About Madoff's Accomplices?

The record 150-year sentence for Bernie Madoff for stealing $65 billion from investors should not be allowed to distract attention from a grave miscarriage of justice: namely the failure of investigators to find the money or identify the other persons involved in this massive fraud.

It is almost as though heaping a large number of years in jail on one individual is supposed to be sufficient response for a crime that must have involved many people who were obviously complicit in this action.

$65bn question

How can you possibly steal $65 billion from under investors’ noses without at least somebody in the chain of institutions and individuals handling this money not understanding what was going on?

And yet that is what the US Justice Department seems to want us to conclude. How very convenient in avoiding more time-consuming and costly investigation, and how very convenient in avoiding further embarrassment to the financial community at this difficult time.

Madoff confessed to the court yesterday that he had deceived his brothers, his two sons and his wife. But could this con man-of-our-generation not be deceiving us about that too?

What he does seem to have done is to sacrifice himself to protect his family. And while a noble objective it does nothing to repay the thousands of people who find themselves financially destroyed by the greatest con man in history.

It will have been a pretty lousy day for justice in America if that is it for the investigation. Can Madoff really have buried his trail so deep that no computer trace exists as to where the loot is buried?

Accomplices

What of the people who worked for him for years? What of the wealth that his family has accumulated over that time? One report said his wife has been reduced to living on $2.5 million. How many Madoff victims have that much left?

The whole case is of course an embarrassment to many parties, from those who unwittingly sold Madoff investments to those who suspected a problem but did nothing. However, those who knew about the fraud and profited from it all along should not be allowed to go free, just because the ring leader is serving 150 years.

Comments

[Roger Knights:]

Maybe the gov't. hopes it can get Madoff to crack, now that he's in the clink. They could offer him a transfer to a nicer prison, etc., in exchange for a full account of what happened. And/or they can use this lengthy sentence to threaten the other suspected accomplices, telling them that the first one to 'fess up will get a pass, and the others will get a sentence as harsh as Madoff's. They'll face a Prisoner's Dilemma--and one of them may break ranks.

Jun 30 08:59 AM

[Scott McNeil:]

Since there were two Madoff firms--the legitimate Broker Dealer and the Ponzi scheme--I believe it is very possible, even probable, that he was deceiving his family. I know that my own wife and kids would believe their old man was just very good at what he was doing and not think much deeper than that.

But there are at least three others who I suspect will be spending time away. Peter, the brother, was too intimately involved in the day to day operation and would have known that the suspected reason the Ponzi scheme did so well was because profits from the trading operation were directed to the Ponzi scheme wasn't true. Therefore Peter should have know the Ponzi scheme was exactly what it was.

The fat woman--Bongierno (sp?)--who ran the Ponzi scheme's back office has to be gulity as hell. Somebody entered the fraudulent trades into the computer that generated the confirms and statements. That somebody might have been some air heads from Staten Island, but the woman who led them knew what they were doing.

The DiPasquale (sp?) guy has to also be guilty as hell--even more than the fat woman. He was Bernie's eyes and ears. It was him who held client's hands when Bernie was not around--which was a lot, especially in later years.

Associated Press--or some such media outlet--has said ten others will be indicted in the coming days. It would surprise me if any of those ten are Ruth or "The Boys." I'll bet it's Peter, the fat woman and the eyes and ears from the 17th floor and seven others from the world of the feeder funds.

Jun 30 11:17 AM

[dmh00000:]

I find it impossible to believe the sons were/are as ignorant as they (and bernie) would like us to believe. The sons ran the brokerage/trading arm of the business which was for years one of the largest. Bernie's alleged strategy was Split Strike Conversion which required ongoing purchase and sale of equities and stock options, both of which could have been executed through Madoff Securities.

While the sons don't appear to be rocket scientists, I'm incredulous that never pressed their father about running trades through the firm, queried who the trades were run through, etc.

Jun 30 01:45 PM

[long roh:]

No mention of Picower? Follow the money...

Jul 01 04:27 PM

[perceptions...:]

There is a cosy culture in some areas!

If the Accountants, Auditors, the SEC and some others, including politicians do not get charged, then we will know the system is rotten to the core!

Given the way this has gone, so far, I would not be surprised, if it goes no further than Madoff or a few "small fish are given up".

In the background Madoff will get "well treated", having done a good deal and saving others.

Jul 01 08:47 PM