Friday, 21 September 2012


Madoff victims get
US$2.5 billion payout
Friday Sep 21, 2012 New Zealand Herald

Bernard Madoff is serving a 150 year prison term for
orchestrating the largest Ponzi scheme in history.
Photo / AP

A court-appointed trustee in New York has mailed out US$2.5 billion in cheques to victims of Bernard Madoff's massive fraud.
Irving Picard announced the distribution on Thursday. He said it means that he has so far satisfied nearly half of all valid claims made by the disgraced financier's burned clients.
Picard has estimated that thousands of investors lost US$17.3 billion in the decades-long fraud. He says he has recovered about US$9.1 billion since he was appointed following Madoff's arrest in 2008.
Madoff pleaded guilty in 2009 to charges that he orchestrated the largest Ponzi scheme in history. He's serving a 150-year prison term.

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Peter’s Piece

Rumor persists that Madoff started out legitimately and met with early success but was entrapped by Mafia strongmen who could see the potential for huge mob profits.

In one of the Madoff biographies there was talk of a mob visit to the Madoff headquarters many years ago and that the operation changed after that visit. This, if correct, may explain Madoff’s willingness to confess and plead guilty while claiming that the operation and knowledge of the scheme was his and his alone.

A Ponzi scheme essentially involves offering investors unrealistically high returns and then funding their returns from the investments of new people joining the scheme. It is named after Charles Ponzi who was a notorious operator of the system in the 1920s. But Ponzi didn’t invent the Ponzi. Credit, or discredit, for that must go to Charles Dickens who in 1844 published the novel Martin Chuzzlewitt which had such a scheme as part of the plot.

In prison in North Carolina, Madoff is reported to be on excellent terms with incarcerated Mafia bosses, but early in his sentence he was involved in several scuffles in which he received some injuries.

He is expected to be released from prison, allowing for good behavior, at the age of 201.