

The $50 Billion Ponzi Scheme - DanielBMarkham
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5333901.ece

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ctingom
"Ira Roth, from New Jersey, said that his family had $1 million invested, and
that he was in a state of panic."

Ira Roth? Wow, somebody has an interesting name or just got a good one past
the journalist.

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patio11
A quick check of the phone book finds three Ira Roth in New Jersey. (I trust
you'll understand why I don't link to the actual search results.)

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mhartl
Madoff reminds me of Ivar Kreuger, the infamous "Swedish Match King"
([http://www.economist.com/finance/displaystory.cfm?story_id=1...](http://www.economist.com/finance/displaystory.cfm?story_id=10278667)).

~~~
gruseom
That is a good article about a brilliant story that is uncannily resonant
today, even more so than a year ago when it was published:

 _In Sweden he was bailed out at the eleventh hour by a government which
realised the economy was at risk from a Kreuger crash._

I'd never heard of Kreuger. I think you should post the article to HN in its
own right (perhaps using the subtitle, which gets across the flavor).

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gruseom
His sons turned him in. There must be a hell of a background story.

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agotterer
Why doesnt anyone think he said to his sons... "look im old and done for, turn
me in and I will take all the blame".

There is no chance he acted alone.

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gruseom
Evidence in favor of your theory:

 _Bernard Madoff's son, Mark Madoff [has been] identified as the firm's senior
managing director and chief compliance officer. [...His] other son, Andrew
Madoff is the firm's director of trading._

[http://tpmmuckraker.talkingpointsmemo.com/2008/12/madoffs_fi...](http://tpmmuckraker.talkingpointsmemo.com/2008/12/madoffs_firm_all_in_the_family.php)

Hard to imagine they didn't know.

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nazgulnarsil
I don't understand the motivation to take big risks when you already have
enough money to retire comfortably. I think after the point of material
comfort has been reached it becomes all about status and the actual purchasing
power of additional dollars is completely lost on them.

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bootload
_"... I don't understand the motivation to take big risks when you already
have enough money to retire comfortably ..."_

Because after you have enough to retire comfortably it's not about 'wealth',
it's about power and the accumulation of power.

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maximilian
What I don't understand is why he ran it for so long. It would seem that he
just waited for his scheme to collapse and then was arrested. Why didn't he
skip town with all the money when it was at a maximum? Thats what a good
fraudster does. Why wait around for 30 years?

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joe_the_user
If you look at the history of this fellow, he seems to have started his scheme
when he fairly young and have run it all the way till he seventy. During that
time, we can assume he ran the high life and basked in worldwide renown. By
the time of the collapse, he was seventy and probably didn't have the either
guts or the know-how to become fugitive.

And in ways, was already the perfect crime. If you could calibrate a fraud so
it begins in your youth and collapses on your deather, you would guarantee
yourself the life of Riley. It is only the folks who out-live who would suffer
and so it is society's regulators who's job it is prevent such things. We've
seen how well that worked.

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tortilla
Updated list of victims: [http://clusterstock.alleyinsider.com/2008/12/bernie-
madoff-h...](http://clusterstock.alleyinsider.com/2008/12/bernie-madoff-hosed-
client-list)

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jmtame
I feel zero sympathy for the family that invested $1 million (or anyone else
in this story). You should know exactly why the returns are so high before you
go and dump millions into a single investment. Nothing in life comes easy or
free.

Another example of irresponsible decision-making. Maybe we should bail them
out, because they need help.

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agotterer
Thats really inconsiderate... There a lot of people who are completely wiped
out because of this. Not everyone was a high net work individual that lost
money. For example there are more then one charitable organizations that
closed their door Friday and plenty of average folks who just lost their
retirement money and more.

Its really easy in hindsight to say the returns are unrealistic and everyone
should have realized. But some of the most intelligent investors around missed
this one. Some investors saw physical returns for the last 10 or 20 years, you
try and wake up one morning and say its all false.

~~~
jmtame
I'm not really referring to the long tail. I was referring to the $1 million
dollar investment in particular, and anything similar.

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tlrobinson
I don't understand how anyone thinks they'll ever get away with Ponzi schemes.
Is it even possible?

Maybe they just plan to flee the country and retire on the beach of some
little island somewhere.

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DanielBMarkham
_The FBI complaint states that Mr Madoff told his sons that he believed the
losses from his scheme could exceed $50 billion. If that is the case, his
fraud would be far greater than past Ponzi schemes and easily the greatest
swindle blamed on a single individual._

Wow

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andreyf
oh, is that what this is about?

<http://www.dilbert.com/fast/2008-12-12/>

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wyday
No, the only similarity is that this article and the comic both use the word
"solvent."

