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Did Madoff blow all the money of his ponzi scheme on cocaine? Is that why he's behind bars? I don't think it's as clear cut to just say that purposefully deceit

by Klinky 9y ago

Did Madoff blow all the money of his ponzi scheme on cocaine? Is that why he's behind bars? I don't think it's as clear cut to just say that purposefully deceitful fraud that collapsed the world economy is simply a civil matter.

rayiner 9y ago
Yes, basically. He took in money and gave people forged trade reports showing how much their investments had made. It’s the difference between a car salesman lying about the “180-point inspection” they put their used cars through and simply delivering you a set of tires instead of the car you paid for. The aggregate impact of such conduct on the world economy is irrelevant to criminal prosecution of individuals. It’s antithetical to criminal law to punish people more harshly because unrelated other people happened to engage in the same wrongdoing.
- Klinky 9y ago
  ..and how is that different than selling people AAA rated investments, knowing the investments were failing, while bundling them further, so they could be fraudulently re-rated as AAA again? They knew these investment vehicles were failing and a sham, but continued to misrepresent their stability to investors. To use a car analogy, it's similar to VW cheating on emissions testing. They knew they could not keep up, so they just lied instead. Guess what? People from VW are actually getting arrested and likely going to prison. As far as the impact of their actions on the world economy, there could be a lot to be said about firms colluding with each other to hide and obfuscate the problems they were creating from their fraudulent activity, so that they could continue to enrich themselves. All of these firms failures at accountability being completely isolated events is simply not true. Madoff isn't behind bars because he blew the money on cocaine. He's behind bars due to: securities fraud, wire fraud, mail fraud, money laundering, making false statements, perjury, theft from an employee benefit plan, and making false filings with the SEC.

by Klinky 9y ago

rayiner 9y ago

Yes, basically. He took in money and gave people forged trade reports showing how much their investments had made. It’s the difference between a car salesman lying about the “180-point inspection” they put their used cars through and simply delivering you a set of tires instead of the car you paid for. The aggregate impact of such conduct on the world economy is irrelevant to criminal prosecution of individuals. It’s antithetical to criminal law to punish people more harshly because unrelated other people happened to engage in the same wrongdoing.

Klinky 9y ago
..and how is that different than selling people AAA rated investments, knowing the investments were failing, while bundling them further, so they could be fraudulently re-rated as AAA again? They knew these investment vehicles were failing and a sham, but continued to misrepresent their stability to investors. To use a car analogy, it's similar to VW cheating on emissions testing. They knew they could not keep up, so they just lied instead. Guess what? People from VW are actually getting arrested and likely going to prison. As far as the impact of their actions on the world economy, there could be a lot to be said about firms colluding with each other to hide and obfuscate the problems they were creating from their fraudulent activity, so that they could continue to enrich themselves. All of these firms failures at accountability being completely isolated events is simply not true. Madoff isn't behind bars because he blew the money on cocaine. He's behind bars due to: securities fraud, wire fraud, mail fraud, money laundering, making false statements, perjury, theft from an employee benefit plan, and making false filings with the SEC.