Saturday, December 13, 2008

madoff securities triggers 50 billion fraud tsunami

It is hard to understand how Bernie Madoff, the 50 billion fraudster pictured above, could run his billion dollar scam operation for years without any regulators or investors realising.

In fact several years ago a financial advisory firm called Aksia did a very basic investigation and has been advising its clients to stay well clear of Madoff Securities ever since. It hardly required the talents of Sherlock Holmes to discover that Bernie Madoff, responsible for billions of dollars worth of investments, was using a firm of accountants called Friehling and Horowitz who had just three employees, one of whom was a 78 year old woman who lived in Florida, one was a secretary, leaving just one actual qualified accountant. The accountant's office, based in Rockland County, NY, consisted of one room, measuring 13ft x 18ft.

Aksis also did some basic sums that showed Madoff Securities could not possibly be making the profits it claimed. It seems very likely that some, if not many, very rich and important investors also knew that Madoff was up to no good; how else could he generate such impossibly good returns for their investment cash. They obviously kept quiet, happy to take the good profits, all the time thinking the scam must be some kind of insider trading. But they were wrong. The scam was not insider trading, it was just a simple common fraud. The investors had fallen for a very normal kind of rip off, except for the fact that it was for 50 billion dollars, their 50 billion dollars. This sets a new bench mark for robbers and thieves, making the Great Train Robbery look like a corner store job. Some totally innocent people have lost everything. Some are saying this could be worse than Enron as the massive losses spread worldwide over the next few days and weeks in yet another destructive global financial tsunami of wealth evaporation.

Madoff Madness: "I knew he was cheating, That's why I used him".

No comments: