3 Madoff
Based on your knowledge of White Collar Crime, these documents and any independent sources that you deem appropriate, please explain what white collar crimes Madoff committed (including citing the applicable federal statutes) and describe the actions that he undertook that constituted the commissions of those crimes.
Madoff and his investment firm was charged with securities fraud, for a multi-billion dollar Ponzi scheme. The scheme wasn't revealed until Madoff himself confessed his crimes.
The Federal Bureau of Investigation complaint says that during the first week of December 2008, Madoff confided to a senior employee, identified as one of his sons, that he said he was struggling to meet $7 billion in redemptions. According to Madoff’s sons Mark and Andrew, on December 9th Madoff had planned to pay out $173 million in bonuses two months early. Madoff said that "he had recently made profits through business operations, and that now was a good time to distribute it." Mark told Andrew Madoff, and the next morning they went to their father's apartment and asked him how he could pay bonuses to his staff if he was having trouble paying clients. Madoff had informed his sons that his investment business was a fraud. Madoff was quoted saying that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme.” United States v. Bernard L. Madoff, 09 Cr. 213 (DC)
Madoff was providing his clients with monthly investment statements and trade transactions that never occurred. He used new client’s funds to pay profits to existing clients. Which is typical in Ponzi schemes.
Madoff admitted that the essence of his scheme was to deposit client money into a Chase bank account, rather than invest it and generate steady returns as clients had believed. When clients wanted their money, "I used the money in the Chase Manhattan bank account that belonged to them or other clients to pay the requested
Madoff and his investment firm was charged with securities fraud, for a multi-billion dollar Ponzi scheme. The scheme wasn't revealed until Madoff himself confessed his crimes.
The Federal Bureau of Investigation complaint says that during the first week of December 2008, Madoff confided to a senior employee, identified as one of his sons, that he said he was struggling to meet $7 billion in redemptions. According to Madoff’s sons Mark and Andrew, on December 9th Madoff had planned to pay out $173 million in bonuses two months early. Madoff said that "he had recently made profits through business operations, and that now was a good time to distribute it." Mark told Andrew Madoff, and the next morning they went to their father's apartment and asked him how he could pay bonuses to his staff if he was having trouble paying clients. Madoff had informed his sons that his investment business was a fraud. Madoff was quoted saying that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme.” United States v. Bernard L. Madoff, 09 Cr. 213 (DC)
Madoff was providing his clients with monthly investment statements and trade transactions that never occurred. He used new client’s funds to pay profits to existing clients. Which is typical in Ponzi schemes.
Madoff admitted that the essence of his scheme was to deposit client money into a Chase bank account, rather than invest it and generate steady returns as clients had believed. When clients wanted their money, "I used the money in the Chase Manhattan bank account that belonged to them or other clients to pay the requested