Madoff investor list provides tabloid fodder
Filed under: Ripoffs and Scams
The $50 billion Bernie Madoff Ponzi scheme had some breaking news yesterday... A list of investors was released for public consumption. And naturally, all eyes were on the celebrities listed.
Some names came as no surprise. Actor Kevin Bacon already publicly stated that most of his family's money had been invested with Madoff and he's now desperate to work. Zsa Za Gabor admitted a couple of weeks ago that she had at least $7 million invested with Madoff.
Yesterday's list highlighted some new celebrity names: Henry Kissinger's family and foundation, John Malkovich, and Larry Silverstein are among the many names on the 162-page list.
As a fraud investigator, I've been asked by many people about the Madoff scam. How could people invest so much money with him and not do their due diligence first? You have to remember that many of the people on the list were investing hundreds of thousands or millions with Madoff, but that money represented only a fraction of their wealth.
It's kind of like me investing $1,000 or $5,000 with someone. Sure, I hope they do a good job with my money and I'll do a bit of investigating before turning over the money. But that's not the bulk of my net worth, and I'm not going to spend hours or days researching the investment opportunity. It's all relative.
So yes, people lost a lot of money with Madoff. But there's a reasonable explanation why many of them may not have paid all that much attention to that investment. Besides.... Madoff came with and excellent track record, good credentials, and plenty of endorsers. Trusted people recommended Madoff, and they had every reason to. They thought he had done well managing money for decades.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Expert Fraud Investigation: A Step-by-Step Guide.
Yesterday's list highlighted some new celebrity names: Henry Kissinger's family and foundation, John Malkovich, and Larry Silverstein are among the many names on the 162-page list.
As a fraud investigator, I've been asked by many people about the Madoff scam. How could people invest so much money with him and not do their due diligence first? You have to remember that many of the people on the list were investing hundreds of thousands or millions with Madoff, but that money represented only a fraction of their wealth.
It's kind of like me investing $1,000 or $5,000 with someone. Sure, I hope they do a good job with my money and I'll do a bit of investigating before turning over the money. But that's not the bulk of my net worth, and I'm not going to spend hours or days researching the investment opportunity. It's all relative.
So yes, people lost a lot of money with Madoff. But there's a reasonable explanation why many of them may not have paid all that much attention to that investment. Besides.... Madoff came with and excellent track record, good credentials, and plenty of endorsers. Trusted people recommended Madoff, and they had every reason to. They thought he had done well managing money for decades.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Expert Fraud Investigation: A Step-by-Step Guide.
Reader Comments (Page 1 of 3)
2-07-2009 @ 9:41PM
Tom said...
Right. But one more representative example: Syracuse Carpenters Pension plan which was invested totally in now bankrupt feeder fund.
By the way, stock market is a gamble. Pension money does not belong there. Hedge funds super gambles. "Trustees" who placed all union members money in one must have been (secretly) rewarded with very handsome "Placement fees".
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2-07-2009 @ 9:35PM
BRIAN REISS said...
THIS HORRID MAN HAS RUINED THE LIVES OF SO MANY AND HURT UNTOLD THOUSANDS THROUGH HIS MISUSE OF CHARITABLE FUNDS, HE DESERVES TO LOSE EVERYTHING THAT EVEN SLIGHTLY BEARS HIS NAME. HE SHOULD BE LEFT WITH NOTHING BUT THE CLOTHES HE IS WEARING AND HIS SOCIAL SECURITY, WHICH HE IS NOT EVEN WORTHY OF HAVING. HE DESERVES TO ROT IN PRISON WITHOUT A CENT TO HIS NAME, AND HIS NAME SHOULD BE HELD IS SUCH CONTEMPT THAT NO ONE WOULD EVER SPEAK IT AGAIN! HE IS A DISGRACE TO THE ENTIRE HUMAN RACE AND THIS MUST NEVER BE ALLOWED TO HAPPEN AGAIN-EVER! SUCH A LEACH ON SOCIETY MUST NEVER BE ALLOWED TO ENJOY A SINGLE DAY IN LIFE FROM THIS DAY FORWARD. HE SHOULD BE REMINDED DAILY OF HIS EVIL LIFE AND THE MISERY HE IS CAUSING AROUND THE WORLD. THERE IS A NEW WORD FOR EVIL AND THIS IS MADOFF.
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2-07-2009 @ 11:30PM
steve said...
i totally agree with brian. well written and correct to the point. madoff is scum..deserves to rot in prison and not in his comfy manhattan apartment. send the bum to sing sing and take everything he owns but the clothes on his back. redistribute his wealth and assets to those he stole from. his family should be scutinized as well for the sources of their wealth.
pitiful and shameful
2-07-2009 @ 11:47PM
Joyce said...
AMEN
2-09-2009 @ 9:12PM
Russ Harden said...
Unfortunately, the biggest ponzi game in town is being run by our federal government. It's called social security and medicare.
2-07-2009 @ 10:10PM
madonna said...
guess what start taking control of your won money. And the Unions should have known better. Start looking around.. No one can be trusted with your money but you. . These were smart people, yet. he ran a con they bit.. It is sad, but so are the banks who steal and credit card companies with banks who cheated people out of their homes. NO difference just a new game..
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2-07-2009 @ 10:43PM
Paulio said...
This amuses me to no end. People in America are so greedy that a good huckster with a story about quick and easy money will sucker us every time. I hate it that union pension funds were ruined. People you CAN NOT TRUST ANYONE ELSE WITH YOUR ASSETS. You and your stuff will soon be estranged. As for the rich actors - oh well. These people are not nearly as smart as they want us to believe. Keep your money close to home and do what you do best. Do not listen to sage advice from someone who makes a living selling sage advice. You'll lose in the end. If you do not know the stock market don't go there nor trust anyone with your money. If you're smart and a little shrewd you can build a lifetime retirement with EE bonds. It just takes a little discipline.
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2-09-2009 @ 4:03PM
Donald Humphries said...
Paulio, There were plenty of people outside America who let their greed get in the way of common sense. Greed is everywhere, baby!
2-07-2009 @ 11:50PM
Henry said...
We all know what will happen, Madoff has already made a deal, otherwise he would be sitting in jail right now instead of his apartment. He has attempted to disburse jewelery, and you know he has to have a few mil stashed somewhere. When he does go to jail, it will be minimum security, with a french maid and an english butler. 50 Billion bucks...that money did not disappear into thin air. With the lives he has ruined..he should get Life plus a day.
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2-07-2009 @ 10:47PM
JOHN said...
Nothing will change my mind that this guy isn't greasing someone. We all know, anyone else would be in jail. Then he violates himself by mailing valuable jewels and walking or driving to the Post Office. And he is still in his comfy apartment, eating well, bathing alone and sleeping on fine sheets in a big quiet room. Something isn't right here.
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2-07-2009 @ 10:54PM
MCKENZIE said...
HEY HENRY KISSINGER, MAYBE THE "NEW WORLD ORDER" WILL GET YOU OUT OF YOU FIX!!!
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2-07-2009 @ 11:18PM
giz said...
In the end, the greedy got or will get what they deserve(d), Especially those who made money off those who lost money and still feeling pretty damn good about it. Greed is the American dream and way. Just look at how the GOP is handling the stimulus bill.
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2-07-2009 @ 11:19PM
porter said...
For the first time in my life I agreed with AL Sharpton, today
he demonstrated in NY infront of MADOFF'S apartment about two set's of justice in America, one for the RICH and one for the poor and middle class.
I totaly agree with AL'S assesment for once he is right.
yes we are a corrupted, disfunctional country who strictly sticks
up for the RICH...only. Madoff should be in JAIL for a long time already and all the people who assisted him, where are they?
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2-07-2009 @ 11:30PM
Wayne said...
This case has become very quiet in the media. I wonder what kind of deal Madoff is arrangeing with his influential buddies. I cannot believe, that with all the wealthy people that were scammed, that this man is allowed to live quietly in his mansion apartment. He must have assets. Homes, cars etc....Take them all and sell them. Leave him with nothing. Just make sure he doesn't have any weapons around that he can use on himself.
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2-08-2009 @ 12:30AM
nvalens said...
Serves them right! Greedy Bastards!
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2-08-2009 @ 12:22AM
Mary said...
Every successful scam has one thing in common, "greedy victims".
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2-08-2009 @ 12:31AM
Gerald said...
They should rip his eyes out cut his tongue out break his ear drums, cut his privates off and throw him in jail for the reat of his insane life and let him rot. He has no conciousness simple jail would be too good for him, he needs to suffer.
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2-08-2009 @ 12:36AM
Mike said...
This scum bag should face the death penalty for ruining so many lives. Our country has sadly gone to hell because $ rules and because of this we're about to implode from within. Without stricter penalties these leeches will just keep popping up but if they fry or do life in the can it will make a difference. I agree with the other posts, he's already paid for his freedom otherwise he would have been locked up for sending out checks and jewels worth millions! Fry the scum!!!
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2-08-2009 @ 2:13AM
G said...
Why are they publishing the list of people who were scammed? It seems like this should be private or priviledged information for the courts to review not the nation. Its sad enough to have been duped but to let the world know, its just doesn't seem right, especially with their addresses, or an address available for people to view. Its truly a sad thing this had happened. It should be a lesson to us all to be cautious and careful when you give someone your life savings, do your due diligence!!! over and over again
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2-08-2009 @ 12:50AM
gracie said...
This man is disgusting! I'm nauseated by what he has done to those that trusted him. And to think that he has done this to his very close friends as well, so much for loyalty. I can't even imagine how he sleeps at night. He should be put under the jail cell. How could they let him walk the streets or even stay in his home. He should be stripped of every cent he has to pay back those he swindled. He should be placed in maximum security with hard criminals but he probably won't even spend a day in jail. I feel sorry for this man because he will have to answer to almighty God on judgement day. His children may not feel the wrath of God right now but a generational curse will be placed on his gandchildren and greatgrandchildren because of his indiscretions.
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