This month marks the ten year anniversary of an event that still causes a lot of embarrassment and painful memories to many people. Yes, ten years ago a certain Bernie Madoff, formerly the boss of all-powerful Wall Street investment group Bernard L. Madoff Investment Securities LLC, was sentenced to 150 years in the slammer for defrauding customers of $65 billion through his elaborate Ponzi scheme. In case you don’t know this, Bernie had confessed to his two sons in December 2008, tormented by guilt no doubt, and they then reported him to the authorities.
Yet after all these years, with Bernie having started his illegal operation way back in the mid-1980s, one uncomfortable suspicion refuses to go away: can one man, alone, steal $65 billion? And the answer that comes to mind is: nope, one man could never pull this off. That’s just too big a sum.
Yes, no one can steal that much money without help. Many bankers and traders must have been involved and regulators must have been looking the other way. I would even go as far as supposing that some members of the US government and even directors of the US Fed could have been well aware of what was going on. But the US investigators, for some unknown reason, believed good old Bern when he pleaded guilty to pulling off one of the biggest scams on Wall Street – all by his little self. Somehow no one had had any doubts about it. If Bernie said he did it alone, they reckoned, he must have been telling the truth.
In Bernie’s case, though, we’re talking about a hell of a lot of money, which should have given a hint to investigators. Sure, the amount was spread between many years, but it has come to light recently that he had actually invested – in a proper sense, that is – only something like half a billion, while the rest of the money just vanished. And according to some estimates, the amount of money he stole could have even reached $150 billion.
Let me tell you what I think really happened: Bernie was, of course, working with many other people, well-connected people. And these people had decided when he was caught out – by chance, by the way, all because of the financial meltdown – that he should take the blame for everything. Look, Bernie, they said to him, why don’t you take the rap for the whole thing and help many good people from having to explain some of the honest mistakes they’ve made in the past? Not to mention that your family would not have to suffer. And we promise to look after you when you spend your time in the slammer.
And Madoff agreed. And took the rap. For all of the $65 billion. And I bet you he probably even feels a certain sense of satisfaction still. Because it’s not like he went down for some miserly hundred grand, or even a mil. He went down in style. And he’s probably looked after well.
Now you may ask: why remember Bernie now? The thing is that another financial crash is on the cards and we can expect that some Bernie is toiling somewhere in America, and he might be confessing to his evil deeds and taking the rap for lots of other people when the whole thing collapses again. Which should be a relief for so many people, on Wall Street and beyond. Not to mention strengthening the faith in good old capitalism.
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