Madoff Friends Face the Music

I always feel a certain element of surprise when the Justice Department acts on an economic crime. Much of the time they pretend it doesn’t exist or tell everyone how hard it is to prosecute. Well, this one is easy; some juicy kills for a prosecutor who will later parley his victories into money. I’m sorry to be cynical but considering the fish they let get away, these guys are not that much. Of course, they do deserve prosecution and I won’t be sorry to see them go to prison


English: Bernard Madoff's mugshot
English: Bernard Madoff’s mugshot (Photo credit: Wikipedia)




It is important for business ethics that there be accountability. But right now, getting caught for financial improprieties is about as likely as getting struck by lightning. That’s not much of a deterrent.


James Pilant


Bernie Madoff’s colleagues going on trial –


Ponzi scheme fraudster Bernard Madoff claimed he alone orchestrated his $65bn scam – starting tomorrow US prosecutors aim to prove that was another lie.Jury selection starts Tuesday in the case against five of the convicted fraudster’s closest colleagues – all of whom have pleaded not guilty to aiding and abetting Madoff in his scheme.The charges include conspiracy to defraud, securities fraud and falsifying records of a broker-dealer. Madoff is currently serving a 150-year sentence after pleading guilty to fraud following the collapse of his Bernard L Madoff Investment Securities in 2008.Three of the defendants worked for Madoff for decades. Daniel Bonventre, the director of operations for the firm’s back office, started working for Madoff around 1968. Annette Bongiorno, his executive assistant, has known Madoff for over 40 years. Joann Crupi, who managed clients’ investment accounts, worked for Madoff for over 25 years. Also standing trial are computer programmers Jerome O’Hara and George Perez.According to the prosecution Madoff and his accomplises created false records and invented exotic trading schemes to explain the firm’s consistent high returns. In fact “the truth was that Madoff and his co-conspirators – with very rare exception – were not making any trades at all,” the indictment said.


via Bernie Madoff’s colleagues going on trial –


From around the web.


From the web site, Charles Omole’s Nigerian Strategies.


(I regard this as a similar situation to that in the United States. jp)


This is a deliberate mess created by the politicians to give
impression they are waging real war on fraud and corruption when in fact
they are only interested in selective prosecution of their opponents.
To restore public confidence; The government should immediately publish
again a clear guidance of when EFCC, ICPC and Nigerian Police can lead
the prosecution of cases. EFCC with its specialised assets, training and
skills should concentrate on major, large and complex crimes only. The
Nigeria police should deal with minor and straightforward financial
crimes. As for ICPC; I am not really sure what value that brings to the
table. It should just be scrapped and EFCC should be strengthened to do
its work.


I believe one of the main reasons EFCC has not been as successful as
it should be is the fact that it is becoming jack of all trade and
master of non. It is prosecuting a N100,000 thief and a N100Billion
thief at the same time.  Human nature means many of their staff will be
more interested in the smaller and simpler cases; to be able to raise
their conviction statistics. But that is not why they were established.
EFCC should from now on focus on serious financial crimes and go after
the “big guns” and stop chasing thieving drivers and houseboys.  They
should leave that to the regular police.


Madoff and Shapiro, Ponzi Schemes?

Madoff and Shapiro, Ponzi Schemes?

Ponzi Scheme (from Wikipedia)

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases. While the system eventually will collapse under its own weight, the example of Bernard Madoff’s investment scandal demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: Madoff’s variant of the Ponzi scheme stands as the largest financial investor fraud committed by a single person in history. Prosecutors estimate losses at Madoff’s hand totaling roughly $21 billion, as estimated by the money invested by his victims. If the promised returns are added the losses amount to $64.8 billion, but a New York court dismissed this estimation method during the Madoff trial.

Nevin Shapiro is accused of stealing around 80 million dollars from investors. Like most Ponzi scams, everyone wanted to believe. Read the article.