The Fraud of the Century: the Case of Bernard Madoff

The Fraud of the Century: The Case of Bernard Madoff

The Ponzi’s scheme was named after Charles Ponzi who was an Italian businessman in US. Charles promised to their client that more than 50% profit within 45 days, or 100% profit within 90 days by buying discounted postal reply coupons in other countries and redeeming them at face value in the US as a form of arbitrage. However, Ponzi was paying money using the investments of later investors. This type of scheme is known and called Ponzi scheme. The same fraud were happened by Bernard Madoff was discovered in December 2008. Bernard Madoff who worked as the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in US history (Reuters Madoff). In this case, I know Bernard was a highly successful businessman. He earned lots of money in 1980s, and then he moved company from Wall Street to the famous Lipstick Buidling on Third Avenue (Business Ethics). However, until 2005, Harry Markoplos, who claimed Madoff was operating the world’s largest Ponzi scheme, and then till 2008, thousand of people have submitted claims for restitution in the Madoff case, including Citigroup, Merrilll Lynch, JP, GM, etc. (Business ethic). Madoff told people he had invested of $65 billion and earned with him, however the actual amount money maybe below $10 billion. As matter of face, Madoff used investor’s money to pay interest to other investors, it is absolutely like stolen money from other investors who actually owned the money and the argument is that the $12 billion was essentially evaporation. Finally, Madoff was sentenced to 150 years in prison on June 2009; many people bankrupted or loses money even suicide. I understood that this is a kind of crime called white-collar crime, which is unique in that it is often perpetrated by a rouge individual who knowingly steal, cheats, or manipulates in order to damage others. In this case,...