Could Madoff really have pulled it off alone?

Randall Forsyth at Barron's makes the case, quite elegantly, that there's no way Bernie Madoff could have perpetrated his long-running Ponzi scheme without help.

Forsyth writes:

"As for Madoff's particular case, the very idea that he acted alone utterly beggars belief. Ignore for the moment the role of feeder funds. At best, they were useful idiots who chose not to delve too deeply into Madoff's practices lest true due diligence might disturb the flow of hundreds of millions of fees they collected.

"We are supposed to believe that he acted without the knowledge of other members of his close-knit family, including those directly involved with the family business. They supposedly were all working in the legit side of the business, totally ignorant of the money-management business on the next floor. But they were ‘shocked, shocked!’ about the multi-billion-dollar scam, though they were able to continue to rake in millions for themselves while Madoff's market-making business' profitability had become marginal in recent years.

"His wife, Ruth, who was inseparable from Bernie until his arrest in December, did not show up for Monday's sentencing. Neither did his sons nor his brother, with whom Bernie has had no contact since the scandal broke. . . . But that helps her and the rest of the Madoffs maintain plausible deniability about their involvement in the fraud."

News wires now are reporting that the government may implicate up to 10 people who were close associates of Madoff. From Bloomberg News:

"Federal authorities are now scrutinizing those who worked in close proximity to Madoff at his firm, the person familiar with the probe said. The government doesn’t believe Madoff acted alone because, considering the scope of the fraud, the duration of his crimes and number of victims, he would have needed help, the person said."

As Forsyth notes, "Just the nuts and bolts of the operation were staggering, down to generating customer statements with myriad fictitious trades that somehow always added up to steady gains."

Exactly. How was this a one-man operation?

-- Tom Petruno

Photo: Bernie Madoff. Credit: David Karp / Associated Press

Comments

[morgan]

The wife knew and she has been rewarded with a $2.5 million golden parachute.
Madoff should be placed in the general prison population until he reveals all, certified by several polygraph tests. he would understand the meaning of "moral Suasion."
Why should he be coddled in prison when other, less fortunate, must fend for themseves with a violent prison population?

[martscan]

Obviously, no single person could possibly pull this scam off simply on the basis of the physical work involved. And, aside from those persons targeted by investigators as being intellectually complicit in Madoff's activities, the more interesting question has to do with the business literacy of the trench workers on the 17th floor and the theory of "conscious avoidance". It would seem to me even the lowliest of back office workers would discern at least the most egregious of discrepancies, over time.

[martscan]

Morgan: Madoff's sentence precludes his being 'coddled'. He must do his time in a medium to high security prison. He won't be playing ping pong and tending rose bushes in a low security Federal 'camp'.

[SK McNeil]

Of course there is no way he could have done it alone--but that does not mean that his wife or sons were involved.

Brother Peter? You bet.

Annette Bongierno (sp?) absoluteliy, throw away the key.

Frank DiPasquale (sp?) give him 150 years and make him live with Bernie so they can talk about it all day every day for the rest of their sorry lives.

Some girls from Staten Island wearing white socks and sneakers to the office? Sure, somebody had to put all the information into that old computer and tear apart the confirms and statements, stuff the envelopes and put them through the postage meter.

Should they go to jail? Nope, just scare the living hell out of them and send them on their way.