Slashdot Mirror
Madoff Sentenced To 150 Years
selven was one of several readers to send in the news that Bernie Madoff was sentenced to 150 years in prison. "Bernard Madoff's victims gasped and cheered when he was sentenced to 150 years in prison, but they walked away knowing little more about how he carried out the biggest robbery in Wall Street history. In one of the most dramatic courtroom conclusions to a corporate fraud case, the 71-year-old swindler was unemotional as he was berated by distraught investors during the 90-minute proceeding. Many former clients had hoped he would shed more light on his crime and explain why he victimized so many for so long. But he did not. Madoff called his crime 'an error of judgment' and his 'failure,' reiterating previous statements that he alone was responsible for the $65 billion investment fraud. His victims said they did not hear much new from Madoff in his five-minute statement. They also said they did not believe anything he said. As he handed down the maximum penalty allowed, US District Judge Denny Chin... [said], 'I simply do not get the sense that Mr. Madoff has done all that he could or told all that he knows.'"
Because he was a former head of Nasdaq. He was one of the rule makers. You do not expect the head of the major exchange to be a Ponzi schemer. Just like a head of police is very unlikely to be a drug dealer.
He never really had $65 Bn.
On paper he did, but that's just because he had overstated clients' gains from the get-go.
Here's what happens:
Investor A gives you $5 Bn.
Investor B gives you $10 Bn.
After 3 years, investor A pulls out -- you pay him $10 Bn in earnings & principal.
So now you have $0, but you owe Investor B $10 Bn plus earnings.
So what do you have left?
Madoff overstated earnings for a long time. This meant for every $1 Bn invested, he had to pay out some n*$1 Bn when that investor called. Eventually he had no money left to pay the investors.
In other words, that $65 Bn isn't squirreled away somewhere (well, I'm sure some of it is) -- it was used to pay off other investors who withdrew their earnings.
The money's not in the Swiss bank accounts. It's in Bob's yacht, and Bill's mansion in the hills. It's in Mary's diamond necklaces, and in Elizabeth's matching Ferraris.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I think Bernie is at least partly taking the fall for his sons. I only wish we could find out the whole truth.
It is very very obvious that the sons knew. The 5+ million dollar loans that each of them received from daddy just before the arrest (never to be repaid, obviously), the sham divorce proceedings that son Andrew and is wife went through right after daddy's arrest (only to be seen splurging on shopping together just days after), the mailing-out of jewellery and other untraceable assets to the sons and the families... That all is very obvious. (Less provable is of course the origin of the rest of their wealth... Tens of millions in real estate in Manhattan and Greenwich each, etc etc)
He ran NASDAQ for fuck's sake. That takes some serious economic knowledge as well as some heavy connections. That kind of background, he knew what he was doing. Ponzi schemes are not hard to spot if you know what to look for. He knew. He knew the bottom would drop out someday, and just bet that it would happen after he croaked. He lost.
Understanding the scope of the problem is the first step on the path to true panic.
No appeals--he pled guilty. And since he was brought up on federal charges, he's got to serve a minimum of 85% of the sentence. That means he'll be eligible for parol in 2136.
This ain't rocket surgery.
OK, I found the answer (cite):
At the same time, hedge funds were facing an unprecedented run on redemptions from their own investors. That meant the hedge funds may have had to quickly extract cash from their Madoff positions to pay their own investors back.
"People didn't stop believing in Madoff. They just needed the money, and that started this spiral," said Stephen Breitstone of the law firm Meltzer Lippe Goldstein & Breitstone, which is representing Madoff investors.
And how exactly do you know what you wrote about socialized care is true?
I am a disability pensioner in a country that has socialized medicine. Not only can my Doctor prescribe any drug on the list at any time,
he can specify virtually any treatment. There is no
input form anyone other than my own doctor in my treatment.
If you must make sweeping generalizations, try for a modicum of accuracy please.
No. He's been in jail for months.
In the words of the New Yorker, on his bail hearing a few months back: "As soon as Sorkin finished asking that Madoff's bail be continued, Chin said curtly, "I don't need to hear from the government. It is my intention to remand Mr. Madoff." Immediate applause, quickly tamped down by the Judge. Moments later, two court officers approached Madoff, who stood silently and still, and then he moved his arms a little so that his hands were behind his back. And then there was a click."
That was Madoff's last moment of freedom for the rest of his life. Madoff is Federal inmate #61727-054 at the Metropolitan Correctional Center, New York City, NY. That's a maximum security facility. Here is Madoff's cell.
MCC isn't a long-term facility, so the Bureau of Prisons will probably move him after a while.
It certainly was.
The whole point of a Ponzi scheme is Peter gives you $1000, Paul gives you $2000. You tell peter his $1000 is now worth $2000, you tell Paul his $2000 is worth $4000. Peter takes his money and you're left with $1000.
You now hope to Christ that Paul doesn't ask for his money before you can find someone else to give you at least $3000. Seeing as Paul has just seen his savings double in some absurdly small amount of time, then provided Paul has no reason to need the money quickly then you should be OK. As long as you've got more people joining your scheme than you have leaving, you're in business.
As a Swede, I find it amusing how my country is used by people of shall we say socialist sympathies as the example of heaven on earth. Granted, not all things are bad here, but healthcare certainly is. Let me put it this way: if you are seriously ill, you go to Germany. Not only are there endless queues in Sweden for any more complicated treatment but the survival rates are among Europe's lowest. The statistics has improved somewhat in the last years since the state monopoly on running hospitals has been removed.
The idea that we have "free healthcare" is nonsense as well. First it's free as in "free lunch". You pay, just not to the people who provide the healthcare but to the state which then distributes it as it sees fit. Second, you actually do pay directly. There is a top cap that is applied to certain treatments and certain medicine - far from all.
Thankfully, these remnants of the "Swedish model" from the '70s (borrow and tax) are dying out. Things are getting better. In some respects we are far less socialist than the US. We have less regulation of financial markets. We have no estate tax or gift tax etc..