“If it Sounds too Good to be True”
What can cause a man to take from so many for so long? What kind of human being can make promises that may only be fulfilled if someone else is left holding the bag? Throughout history, there have been many thief’s and cheats who have stole or ‘borrowed’ way past their limits and many who still financially plague society. In recent light, Bernard Madoff is the man on the stand who is still facing his June sentencing date which could be up to 150 years in prison.
When did it all start? According to Madoff, his Ponzi scheme began in the early 90’s. Madoff created a scheme in which new investments were used to finance payoffs to earlier customers, to falsely make it seem like there were genuine returns. He never imagined that it would last as long as it did but he realized that the snowball was way too massive to stop. What is a Ponzi scheme? “A Ponzi scheme is a type of securities fraud where the promoter makes some sort of false or misleading statement about an investment (often including a guaranteed high rate of return) and pays off older investors with newer investor's monies. Eventually, when the promoter can't find any new investors, the scheme collapses. Ponzi schemes are named for Charles Ponzi who, in the early part of last century, took investors for millions by guaranteeing big returns from arbitrage profits from purported investment called an "International Postal Reply Coupon." (American Bar Association.) In court, he stated that he began by promising strong returns even though the stock market was not doing very well and the country was in a recession during the 90’s. Bernard L. Madoff Investment Securities LLC was his firm that was used to con thousands of people out of their money, some of the funds provided by his customers were, life savings or retirement funds. Madoff was not shy to admit that he knew the day of...