Bernie Madoff's Programmers Arrested

ZipK writes "With their former boss cooling his heels on a 150-year sentence, programmers Jerome O'Hara and George Perez are now in the US Attorney's crosshairs. They've been arrested and charged with criminal conspiracy, and 'accused of producing false documents and trading records at Bernard L. Madoff Investment Securities LLC in New York.' Apparently Madoff's fraud was too large and too complex to be foisted entirely by hand."

Comments

Moral of the story:

[alecto]

If you destroy evidence, make sure you destroy the backups, too.

Re:Moral of the story:

[NotBornYesterday]

... and when your boss gets 150 years, get your ass to a country without an extradition treaty with the US.

Re:Moral of the story:

[Tumbleweed]

If you destroy evidence, make sure you destroy the backups, too.

Also, make sure you destroy evidence of your destruction of evidence and backups.

Re:Moral of the story:

[Anonymous Coward]

Should have used perl.

Re:Moral of the story:

[skine]

Don't forget to destroy the evidence of your destruction of the evidence of the destruction of the evidence and backups and its backups and its backups.

Re:Moral of the story:

[Tumbleweed]

Don't forget to destroy the evidence of your destruction of the evidence of the destruction of the evidence and backups and its backups and its backups.

This is going to turn into one of two things: A painting of Stephen Colbert, or an episode of Black Adder.

I'm good with either outcome, really.

Re:Moral of the story:

[Wuhao]

... and when your boss gets 150 years, get your ass to a country without an extradition treaty with the US.

Polanski's corollary: Stay there.

Re:Moral of the story:

[OnlineAlias]

Well, the problem is they were sending out statements. Those statements were theoretically based on input from the markets, after the amounts were made bigger by the black box which was Madoff's investment "strategy". Once the black box was determined to be a fraud, the programmers were done, because they implemented the black box. At that point ,no amount of deleting was going to get them out of being implicated.

Re:Moral of the story:

[popo]

Popo's corollary: And if you're a far bigger criminal enterprise (cough, Goldman Sachs, cough, JPMC) kick back and laugh as the Justice system locks up the small fry's.

Re:Moral of the story:

[hey!]

That's like saying if you intend to stick your fingers in the meat grinder, you ought to keep something you can use as a tourniquet handy. It's true, in a completely useless way.

These guys were helping with the biggest Ponzi scheme in history. The reason that Ponzi schemes are illegal is that *they are destined to collapse*. When you're helping run the biggest one ever, it's going to be the biggest crash and burn ever. Evading the consequences means moving as much cash as you can overseas, planning to change your identity, and getting the hell out of Dodge a *long* time before you think you might need to. And that's assuming you don't trip the money laundering detectors, which you certainly will.

Madoff and these guys for a very, very brief time had a model nobody else had, and it depended on computation to do things faster than anybody else had ever tried to. But it didn't take long for other people to copy the general idea, Instead of patting themselves on the back for being so clever, pocketing the huge profits they made, then moving on to the next thing, they decided to *pretend* their advantage could go on forever. You have to think they were mentally ill on some level, because they *had* to have known they'd be caught. Somehow they must have had a need that went deeper than money, a need to be regarded as brilliant beyond ordinary mortals, if only for a limited time.

But

[Dunbal]

So tell me, when are they going to go after the programmers at Goldman Sachs?

Re:But

[XPeter]

The Goldman programmers aren't the problem. The lobbyists are.

Re:But

[ShatteredArm]

Since when was it a crime to have a former CEO in charge of the US Treasury, who has an obvious financial interest in the firm's survival?
Since when was it a crime to be the exclusive market maker in CDS, after your two major competitors go out of business, giving you a completely risk-free profit on bit-ask spreads?
Since when was it a crime to upgrade a company whose stock offering you are underwriting?

Re:But

[Dunbal]

Because the US is a nation of laws

      George Bush proved that wrong.

you have to break a law first before they can go after you.

      Unless the programmers were committing fraud by asking people for investment money with no intention to return it, how are they breaking the law? I'm unaware that Madoff was hacking people's computers, creating viruses, or even downloading copyrighted movies.

      If you're a programmer hired to write a financial or accounting program, and never given information as to how that program is going to be actually used - how are you breaking the law? Hell if this logic applies, go after Microsoft too because I'm sure that Madoff used Microsoft Word to send mail to some of his clients.

      OK perhaps there's some detail we don't know, and will find out at trial - perhaps some programmers were in on the fact that it was a scam. However this reeks to me of overzealous prosecutors trying to spread as much blame around as possible. Hell they could start with arresting the SEC for never investigating the guy, in that case.

Re:But

[ShatteredArm]

Hell they could start with arresting the SEC for never investigating the guy, in that case.

THIS

The SEC had been tipped off on this scam at least three years before it "surfaced."

Re:But

[dkleinsc]

That's easy: when there is evidence that they committed a crime.

Goldman Sachs's behavior is probably completely legal (that doesn't mean it's morally right, just legal). Also, it's extremely unlikely that programmers working in the bowels of the big investment banks (GS, MS, BoA) are in on any lawbreaking that does occur.

It seems like these guys made several stupid mistakes:
- Being loyal to Madoff et al once they knew what was going on.
- Being willing to lie to the FBI and/or SEC.
- Taking big bonuses to keep their mouth shut.
- Staying in the country after the house of cards fell apart.

Re:But

[NotBornYesterday]

perhaps some programmers were in on the fact that it was a scam

FTFA:

[according to the prosecutor] The computer codes and random algorithms they allegedly designed served to deceive investors and regulators and concealed Madoff's crimes

At one point they tried to cover their tracks by erasing files, but did an incomplete job.

After that, the SEC said DiPascali convinced the programmers to modify programs so that he and other employees could create [fake] reports themselves.

... which indicates that although they might have been bothered by what they were doing, they weren't bothered enough to quit,or call in the Feds themselves, or take any other redeeming action.

Granted, they're innocent until proven guilty, etc., but it appears they were in this up to their ears.

Re:But

[Dunbal]

it is clear that their high-speed trading is effectively a zero sum game and by enriching themselves, they are not providing greater prosperity for others.

      So long as I can still make money day trading on the stock market, I don't care. And I CAN still make money.

      The high speed trading provides liquidity. I need someone to buy stock from me or sell stock to me. Without these traders, I'd place a bid/ask and wait. And wait. And wait. And maybe I'd get my price. Maybe I wouldn't, in which case I'd waste both my time and the missed opportunity. When you're day trading you usually need to get in and out FAST. Doing otherwise is called "investing", not day trading.

      What concerns me is the ability of a multi-trillion dollar company to have access to more information than you (ie, level 3), and since they are brokers possibly the ability to track and uniquely identify shares. So they can, in theory, know who bought what at what price and therefore who is holding what thanks to databases, and thus use their vast resources to pressure people into closing/covering their positions to their advantage. THAT is unfair and should be illegal. It's akin to knowing the order of cards in a deck. It's an unfair advantage. However without breaking into their proprietary computer records, we'll never know if something like this is actually happening. It probably is.

      The good thing is, as a little fish, it's not my 1000 share or so transactions that is going to make them want to single me out to screw me over. I pity the banks and mutual funds, however.

Re:But

[CannonballHead]

The injunction of Jesus to love others as ourselves is an endorsement of self-interest

Ah yes. A great Biblical scholar. All Biblical scholars know that Jesus definitely was trying to protect self-interest. So was Paul, when he said

Philippians 2:3 (New International Version)
Do nothing out of selfish ambition or vain conceit, but in humility consider others better than yourselves.

And Jesus when He talked about being meek, humble, lowly, generous, forgiving, feeding the poor, clothing the naked. And the rest of the Bible when it talks about humility, that God hates the pride, that God "sides" with the humble, that God resists the proud, that God sees the poor and needy, that God judges the unjust - especially when they are rich and they unjustly treat the poor ...

Definitely "an endorsement of self-interest." Frankly, I would guess that Griffiths has never read the Bible but pulled that quote from somewhere because he was in St. Paul's Cathedral and thus wanted to appear religious in some way. To most people that actually have read the Bible and even more so to people that believe it, he only comes off as being ignorant and just using the words of Jesus to excuse his own selfishness and greed (also talked about in the Bible in quite condemning terms). Not sure that's what he meant to do.

Re:But

[werfele]

Unless the programmers were committing fraud by asking people for investment money with no intention to return it, how are they breaking the law?

I understand Madoff would provide quarterly statements showing a more-or-less constant rate of return, listing fictitious trades that would justify the rate of return, using knowledge of actual prices in the past quarter to get the numbers to come out just right (which is easy enough in hindsight). I'm all for presuming these guys innocent, but I think your outrage is misplaced. It's hard to imagine a spec for this software that wouldn't be at least a bit suspicious, so you can hardly blame them for looking into the programmers.

Re:But

[Marcika]

The thing with Goldman Sachs is completely different than Madoff. Madoff duped investors in thinking he was making trades when it really was a large Ponzi scheme. Someone had to generate the fictitious paperwork for the investors and these programmers were allegedly behind it.

Goldman Sachs made huge bets in the housing market. When the housing market fell, Goldman (who had placed a lot of money into this market) lost big.

Hate to break it to you, but Goldman never "lost big" -- that's what the outrage is about. They made big bets with AIG betting against the housing market, and bet against AIG in the CDS market to hedge the risk of AIG collapsing.

So (1) they won big when the subprime market fell, (2) they won big when AIG didn't fail as expected but was bailed out could repay $17bn worth of bet winnings, (3) they won big when all their competitors who actually believed in the housing market collapsed or suffered, and Goldman was one in maybe three kids left on the block. That's why now they can pay bigger bonuses than ever, in a time where unemployment is worse than at anytime in the last 80 years...

Another case of bad parenting?

[jhfry]

I always tell my kids that "so-and-so made me do it" is no defense. And I'm sure nearly every parent has taught their children that for generations. I hope these guys roast for not listening to their parents!

Re:Another case of bad parenting?

[Toonol]

Oh boy your one of those fathers who always goes in to check the "collaborative shindig" for liquor, aren't you?

You mean "a good father?"

crontab

[El_Muerte_TDS]

Apparently Madoff's fraud was too large and too complex to be foisted entirely by hand

And that's why we have cellscripts and conjobs

Right after the revolution

[Colin Smith]

You realise GS pretty much pwns the US government.

 

Re:Right after the revolution

[zippthorne]

I think you're reading too much into it.

The idea being that a large investment firm, and possibly others and their clients, are all using certain code to help them decide when to execute trades. An unscrupulous third party could use knowledge of that code to place investments that trigger trades by GS, which is large enough to affect the market. In effect manipulating the market by manipulating GS.

The market gets manipulated by the sheer size of GS, and the main loser would be GS, as well, since they're already using their software to maximize their own benefit.

Which brings to mind the issue that the sheer size of GS is the real issue, not the software that they use. Someone here once said, "too big to fail? More like too big to be allowed to exist!" Everyone that received bail-out money should be broken into smaller entities on a staggered basis when the economy recovers.

Re:Right after the revolution

[WarwickRyan]

> That's 10% 10% barely covers overhead, and employee salaries.

Put simply, Profit = Revenue - Costs.

All overheads, salaries etc ARE costs. So Dell's $1.5b profit on sales of $14b isn't at all bad at all. It's very good.

What you're talking about is margin - the difference between the cost price of something and the sale price. The figure of "30%" is a generally accepted minimum margin for a business. I think it's based on a reseller. If you buy a box of paper in at $10, then you should have to sell it for $15 (plus tax if applicable) in order to survive. That $5 should cover all of your costs, with a little left over for profit.

Re:Right after the revolution

[Anonymous Coward]

Which brings to mind the issue that the sheer size of GS is the real issue, not the software that they use. Someone here once said, "too big to fail? More like too big to be allowed to exist!" Everyone that received bail-out money should be broken into smaller entities on a staggered basis when the economy recovers.

There's the old joke (updated for today's numbers) - "if you owe the bank $100,000 that's your problem. If you owe them a billion dollars, that's their probelm."

Re:Right after the revolution

[Enderandrew]

I hate articles filled with lies.

Buffet routinely lobbied against the bailout legislation.

Buffet did lobby for bailouts of a different nature, in which the government would get voting stock in the companies they bailed out, there were clear stipulations on where money was spent (so it didn't go into pockets like his), and there was massive accountability.

When Buffet bailed out GE, he laid out such a framework and encouraged the government to follow suit. And while Buffet has a high personal worth because of stock he owns, he has always been know to live frugally, and is now giving away the massive bulk of his wealth.

However Buffet is a known conservative, so a liberally-slanted website is all but obligated to go on a character assassination for no good reason. (I'm neither Republican nor Democrat. I just hate lying. If anything, I support true liberalism, in which there is less government restriction period, and personal liberties are protected as much as possible).

Re:Right after the revolution

[Dunbal]

Buffet routinely lobbied against the bailout legislation.

      Buffet is a smart man. And everyone was against the bailout legislation. Except of course those to be bailed out, and the Pelosi inspired politicians.

      I still remember the reports when it was first mentioned. "All my constituents aren't saying "No", they're saying "HELL NO!"". All that got swept under a pile of money however.

      It's curious for me that, living in Costa Rica, the US dollar has plummeted against our local currency - to the point where a can of Coke is now twice as expensive here versus in the US (due to local inflation continuing despite our currency appreciating against the dollar). I think soon US citizens won't be able to afford to travel outside the US. It's a real pain in the ass for me, because I earn in dollars, so I'm becoming relatively poorer too compared to my wife who earns in local currency. We're talking 10-15% poorer in the past 3 months alone. Running the money printing presses in the US has everything to do with this. But no one listened to Ludwig von Mises the first time, anyway.

Re:Right after the revolution

[Ansonmont]

I have been a reseller of many things. A profit margin of 10% is amazing in the computer business, Dell being no exception. I sold a lot of Dell stuff (*shudder*). And I am not talking about net, but gross profit. Sometimes 4% was considered worth it. It all comes down to volume, ease of delivery, and credit. Everything else is just a guideline at best. If you worked at a company that only made a 1% net profit, but invested in its people, its infrastructure and its goals, would that be worth it? Supermarkets operate at low margin, but have high volume.

-A

Re:Right after the revolution

[Zalbik]

. If you worked at a company that only made a 1% net profit, but invested in its people, its infrastructure and its goals, would that be worth it?

It may be worth it to work there, but solely as a return on investment, no it is not "worth it". There are numerous other items that could be invested in (bonds, real estate, commodities) that offer far better that a 1% return with far lower risk.

So no, it isn't worth it if you believe the sole function of a company is to generate profit. Thankfully there are a few people who believe creating great products is more important than great profits.

Re:Right after the revolution

[Ungrounded Lightning]

What you're talking about is margin - the difference between the cost price of something and the sale price. The figure of "30%" is a generally accepted minimum margin for a business.

It depends - enormously - on turnover.

If you turn over your inventory (on the average) in a week or less, like a grocery store, a 1% profit comes out to over 50% in a year (and that's not counting compounding). This is why grocery stores are VERY sensitive to shoplifting and spoilage costs.

If you turn over your inventory in a couple quarters or a year, you'd better be making margins in the 30-50% range if you want to stay viable.

Fast nickels are a LOT better than slow dimes.

Re:Right after the revolution

[ShatteredArm]

Buffett is a Democrat.

And yes, Buffett did benefit from the bailouts... Not to mention Buffett recently tried to back Goldman's recent proposal to buy tax credits from Fannie Mae. He's not the boogeyman, but he's not the nice, friendly man with a sincere belief in capitalism that he is sometimes made out to be.

Re:Right after the revolution

[ShatteredArm]

That is only true of they are not hiding all their losses off of the balance sheet, refusing to recognize them until years down the road, etc. In that case, they would need the government's help to sur....

Come to think of it, you have a good point...

Re:Right after the revolution

[MaskedSlacker]

He's not Republican. That's pretty much the definition of a conservative these days.

Re:Right after the revolution

[PeanutButterBreath]

If anything, I support true liberalism, in which there is less government restriction period, and personal liberties are protected as much as possible).

I hate to break it to you, but what you are describing is Libertarianism, not "true liberalism". My condolences.

Re:Right after the revolution

[MaskedSlacker]

1% profit is not the same as 1% ROI. The first 1% is out of gross receipts, the second is out of initial investment which are two completely different numbers. 1% profit can easily be 20-30% ROI depending on the structure of the business (grocery stores come to mind).

Re:Right after the revolution

[turbidostato]

"If you worked at a company that only made a 1% net profit, but invested in its people, its infrastructure and its goals, would that be worth it?
It may be worth it to work there, but solely as a return on investment, no it is not "worth it". There are numerous other items that could be invested in (bonds, real estate, commodities) that offer far better that a 1% return with far lower risk."

The point is that there are investments and investments. You surely can find places to invest you money and get better than 1% profit but... what money? Unless you are rich by birth it will be the money that you gain in excess to your living expenditures so since you must work somewhere, do you prefer to work for a company that invests in its people and still manage to make a net profit so it's sustainable or anywhere else?

Re:Right after the revolution

[peragrin]

Apple gets 25-30% on it's computers.

think about it. apple sells less computers but makes more money than dell.

which company is doing things right as a business and which one is working hard for scraps?

Re:Right after the revolution

[adavies42]

and if you owe them 100 billion dollars, that's everyone's problem.

Re:Right after the revolution

[TheCarp]

> Which brings to mind the issue that the sheer size of GS is the real issue, not the software that they use. Someone here once
> said, "too big to fail? More like too big to be allowed to exist!" Everyone that received bail-out money should be broken into
> smaller entities on a staggered basis when the economy recovers.

As someone who loves to jump back and forth between realism and idealism, I have pointed out to a few friends that if a law were ever enacted that simply laid out a bright line for what "too big to fail" meant... and stated that the government would instantly assume control of ANY entity that fell under such criteria....

Within a very short time frame, businesses would be built up around every institution making sure that they never come close to that and risk being taken over.

In short, it would prevent such institutions from existing.

-Steve

Re:Right after the revolution

[Artifakt]

The conservatives have spent how much on two wars? An honestly reported Defense budget, where costs such as medical care for wounded vets aren't shuffled over to HEW, makes military spending well more than 50% of the total. You could completely close all federal programs except prisons, war on drugs and defense, privatize everything there that you could, and you still have an incredibly bloated federal government at zero % liberalism.
      And it was conservatives that rushed through the biggest single spending program ever, a bank bailout with no strings attached. The 'liberals' have spent less on this, taken more time for rational debate, and demanded more accountability. (And still ended up giving away our money to parasites and freeloaders, but at least at a slightly lower rate than your beloved conservatives).
      You do know, don't you, that it's conservative drug war policy that drives over 90% of our foreign aid to South and Central America? See, when we give Colombia modern troop transport helicopters for anti-drug use, we have complaints from their neighbors that those choppers could be used for other activities, such as a nice little invasion, so we give the neighbors aid to buy more military hardware too, whether they have the same drug problems or not, until there's a balance of power restored. It's conservative mandated spending, and really spending driven by the DEA, but it gets blamed on the 'liberals', since it goes on the books as foreign aid, and 'everyone knows' that's them bleeding heart do-gooder types.
      Education? No Child Left Behind is a conservative program. How much did it add to government controls and the tax and spend mentality? Has it worked?
        Why are there now 17 federal agencies where there are firearms carrying agents (and yes that excludes the military)? Are liberals the ones giving out more guns to BATF, DEA, Dept. of the Interior, and so on, and how does that fit with getting government out of our lives?

Re:Right after the revolution

[ultranova]

And if you owe a trillion dollars, the debt gets cancelled and you get a bonus.

Really, these things happen all the time. This was just the most public one lately. It's only humans who are actually stuck with their debts, not businessmen.

What's the motivation?

[cryfreedomlove]

There are so many great opportunities out there for making a legitimate living programming that it makes me wonder why these guys volunteered to spend the best years of their lives stealing from people.

Re:What's the motivation?

[khallow]

There are so many great opportunities out there for making a legitimate living programming that it makes me wonder why these guys volunteered to spend the best years of their lives stealing from people.

Something like this, they'd have to be paid a lot better than what they could make legitimately.

Re:What's the motivation?

[khallow]

From the article:

Madoff told DiPascali to pay the programmers "whatever they wanted in order to keep them happy," the investigators said, and the programmers received pay increases of about 25 percent and net bonuses of about $60,000.

Pay increase of 25% above what was probably already a good salary and a bonus that alone matches or exceeds what a lot of programmers make in a year.

Re:What's the motivation?

[geekoid]

You're a computer programmer, in your mid 40s. Finding work is difficult for a programmer after 40, every one around you is becoming stinking rich, law enforcement seems to not pay attention when things go well, you have kids in college, and you boss is pressuring.

Every day you go in and deal with these people, everyday they lie and cut corners and get rich without any legal issues.

What they did was wrong, but I can certainly understand why they did it, and I can't say for 100% I wouldn't have done the same thing. I like to think I wouldn't, but still.

Re:What's the motivation?

[Anonymous Coward]

What do you mean? So a good software guy makes some low 6-figure salary, Madoff's guys made close to 7-figures, if not more. Even the secretary there made over 200k..

A good software guy can buy a house in the suburbs, not too far from the office and maybe drive a Lexus. These guys lived in Manhattan and drove $100k+ cars, probably had a couple. You might have a babysitter or day care, they have au pairs. You have some 401k matching up to a few percent, they get maxed out and then they get to invest in the hedge fund that was doing consistent over 12% returns, as a perk.. Of course there are opportunities... your wife might work while theirs can stay home with the kids (when they aren't at the gym) and they still bring home more money. Your kid turns 16 and you might buy an old beater car to work on and get them around, they can get their kids brand new Mercedes with all the safety features you can imagine. We're talking about lifestyle altering amounts of money here. The kinds of money that alters you kids' lifestyles.

What's funny to me, so the engineers take the drop, they take notes, they knew what was up, they probably helped cover it up. Damn near everyone in the office knew what was going on and probably the managers of most of the feeder funds did. At least a couple did some due diligence, they had to, competitors suspected it was a scam. If they were remotely intelligent about it, they hid some cash away somewhere so their families will be taken care of. You'll see very few bankers go down for this though.

Re:What's the motivation?

[NoYob]

Not necessarily.

After the Y2K and the 2001 tech crash, there wasn't as much of a demand for coders, especially with most of the new projects being web based - if you were a C/C++ coder, there were more coders than jobs.* Also, offshoring was picking up steam and then there is the age factor. When you get above 40, folks start wondering why you're still wanting to code or they think you're too old to be doing the 80+ hour week crunch periods or you're not willing (or too smart) to do that - either way, there is some age-ism in tech. Yeah, yeah, I know there are folks who are in their 60s working at jobs coding - I knew one myself, but they're not the norm.

Now, when your back is against the wall and someone puts a shit load of cash under your nose doing something that may or may not be ethical or even legal, you may do it. I wouldn't judge these guys unless you've been in their shoes.

The other thing is, I'm sure Madoff did NOT tell them upfront that what they were doing was illegal. He or his cohorts just gave those guys a programming assignment and didn't give specifics. Later on, those guys probably had a good idea what was going on, though but then, who knows what was going through their heads. Maybe, "Hey, we haven't been caught after all these years. WTF!"

*Look now, Microsoft has even laid people off! Times are rough! There are job postings at a few companies I know of and they're telling me that they're getting bombarded by very qualified people. To weed them out, they're getting ridiculously picky.

Re:What's the motivation?

[khallow]

A 60k bonus for a good 'lead' programmer working in the financial industry is very low.

Maybe they weren't good programmers. Programmers with mediocre skills (or something else that would have looked wrong on a resume) and flexible morality might have been exactly what was bought here. They'd be paid more than they could get anywhere else so less worry that they'd run off. And because Madoff was running a Ponzi scheme, he didn't need high quality programmers (or other staff on the financial side) any more. He just needed enough staff to make it look good. The sales end would be the only place he'd need quality people (since he's still selling his fund).

Well, of course.

[Animats]

If you've followed the details of the Madoff scandal, it was obvious that it required substantial computer support.

Each month, Madoff's investors got statements which showed fictitious trades and fictitious profits. The phony trades were for real stocks, with prices which were (almost) real. But the trades were chosen retrospectively, which is like betting on a race after it's run. So superficially reasonable statements came out. This was all generated on an AS-400 that had been in use for this for several decades.

The software wasn't very good. If they'd been better at it, they could have generated statements which showed trades which exactly matched real trades of others (from the "tape"; trades are public but traders are anonymous), delivered trade confirmations every day, and still shown phony profits just by picking trades randomly distributed around the 75% of each day's trades. That would survive external examination, but not a real audit. Close looks at Madoff statements show trades which could not possibly have occurred; the price is outside the day's trading range. Sloppy.

Re:Well, of course.

[Anonymous Coward]

If you've followed the details of the Madoff scandal, it was obvious that it required substantial computer support.

Each month, Madoff's investors got statements which showed fictitious trades and fictitious profits. The phony trades were for real stocks, with prices which were (almost) real. But the trades were chosen retrospectively, which is like betting on a race after it's run. So superficially reasonable statements came out.
This was all generated on an AS-400 that had been in use for this for several decades.

The software wasn't very good. If they'd been better at it, they could have generated statements which showed trades which exactly matched real trades of others (from the "tape"; trades are public but traders are anonymous), delivered trade confirmations every day, and still shown phony profits just by picking trades randomly distributed around the 75% of each day's trades. That would survive external examination, but not a real audit. Close looks at Madoff statements show trades which could not possibly have occurred; the price is outside the day's trading range. Sloppy.

YOUR HIRED!

your friendly Goldman Sachs recruiter,

Beelzebub

interesting

[Trepidity]

I went to an engineering school that was founded in the aftermath of WW2, so had a strong ethos of: "scientists and engineers need to understand what we're doing and why, not just implement stuff other people tell us to". I.e., don't assume the people above you are in charge of the "why" and as the scientist/engineer all you need to care about is the "how". Usually it's seen as more of an ethics thing, but interesting to be reminded that on occasion it can be a matter of self-interest, too, since you have a legal responsibility to know what you're doing and why, at least to some minimum degree.

Re:interesting

[Trepidity]

Most real engineers aren't either--- only a small fraction of engineers who work for large corporations have P.E. certification.

The REAL lesson of this.

[MarkvW]

When you are a little fish . . . run to your lawyer, then together make yourselves the very best friends that the FBI ever had.

Re:The REAL lesson of this.

[Animats]

When you are a little fish . . . run to your lawyer, then together make yourselves the very best friends that the FBI ever had.

Yes, run. It is official Justice Department policy that only the first conspirator to report a criminal conspiracy gets off:. "(the) Division frequently encounters situations where a company approaches the government within days, and in some cases less than one business day, after one of its co-conspirators has secured its position as first in line for amnesty. Of course, only the first company to qualify receives amnesty. "

Re:Alan Johnson is a twat

[NotBornYesterday]

any particular kind of metal you'd like the chains made from

Mercury.

Re:Alan Johnson is a twat

[Rakishi]

Very far from true.

The list of countries with no extradition treaties with the US is, more or less:
Afghanistan, Algeria, Andorra, Angola, Armenia, Bahrain, Bangladesh, Bosnia and Herzegovina, Brunei, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, the Central African Republic, Chad, China (People's Republic of China), the Union of the Comoros, Democratic Republic of the Congo, Cote d' Ivoire, Djibouti, Equatorial Guinea, Ethiopia, Gabon, Guinea, Guinea-Bissau, Indonesia, Jordan, Kosovo, Kuwait, Laos, Lebanon, Libya, Madagascar, the Maldives, Mali, the Marshall Islands, Mauritania, the Federated States of Micronesia, Moldova, Mongolia, Montenegro, Mozambique, Myanmar, Namibia, Nepal, Niger, Oman, Qatar, the Russian Federation, Rwanda, Samoa, São Tomé & Príncipe, Saudi Arabia, Senegal, Serbia, Somalia, Sudan, Syria, Togo, Tunisia, Uganda, United Arab Emirates, Vanuatu, Vietnam, Yemen, Zimbabwe, Bhutan, Iran, Taiwan, Korea (North).

Have they not seen Office Space?

[PeterChenoweth]

It's all about the decimal places.

I hope they enjoy their stay at Federal Pound-Me-In-The-Ass Prison.

"Bernie Madoff's Programmers Arrested"???...

[Dogtanian]

...Oh My God! Does this mean Bernie Madoff was a robot?

And this, boys and girls....

[snspdaarf]

Is why you write in bash, and only key it in on the command line.

Re:Alan Johnson is a twat

[Korin43]

For some reason I don't think we need an extradition treaty with Afghanistan..

Re:Alan Johnson is a twat

[turbidostato]

"i.e., the ass cracks of the world..."

You don't know Andorra, do you? Imagine Switzerland, only shorter and more friendly.

Re:Alan Johnson is a twat

[geekoid]

Almost all of those have no treaty because they will hand someone over without question.

Some will even imprison and get information for you, you kniow, becasue without a treaty there nthing from stopping them from torture.

What about his banker, Chase?

[technobabblingfool]

Madoff kept all of his billions of money in a single account at JP Morgan Chase bank. If they are going to bust his programmers, they should bust his bank too. Even for a bank the size of Chase, Madoff just leaving billions of dollars sitting in the account instead of investing it like he claimed to be doing must have gotten their attention one or a hundred times. If the bank looked the other way to hang onto a lucrative cash deposit, they are just as guilty as the programmers.

Re:Alan Johnson is a twat

[BJ_Covert_Action]

Andorra:

After reading your post I was inspired to wikipedia Andorra. I am a US citizen. Now I want to move to Andorra. Thank you =)

Re:Alan Johnson is a twat

[donscarletti]

You could probably survive China, Moldova or Vietnam.

China is nice enough. However, in the case of China, if your country starts telling them that you stole billions of dollars, they're going to deport you for overstaying the visa that they just terminated. If your own country says "we want him back so we can kick his arse", then it is really not worth the effort for the Chinese government to argue with your government about a potential criminal they don't care about anyway. The US has sent Chinese embezzlers back to China, I'd imagine they would repay the favor. In fact, you'd have a very hard time finding a country that will knowingly take in a fugitive unless they can prove that they are a political refugee. Agreeing to repatriate suspects is an easy and popular way to get shady people out of your own country and keep the other country happy. You have never actually needed an extradition treaty to do it. Chinese law prohibits the extradition of Chinese citizens, which means that they will probably be tried by a local court instead, doubtfully a better outcome.

Re:Incorrect.

[tomhudson]

Liberals want to be liberal with conservative's money, and conservative with liberal's money.
Conservatives want to be conservative with conservative's money, and liberal with liberal's money.

Every "class" or group wants to spend more of other peoples' money, and less of their own, and they all have rationalizations to justify their individual positions.

Me, I'm a true egalitarian - I want to spend EVERYONE's money! :-p