Ponzi scheme operator, Bernie Madoff was jailed overnight and will now become the pin up criminal for the credit crunch and recession.
Bernie got 150 years in the clink, the maximum and will die in prison.
Investors attacked his character in court testimony before the sentencing.
The judge cited Madoff’s failure to identify accomplices, which has made it harder for prosecutors to build cases against others. The receiver of his firm, Bernard L. Madoff Investment Securities has said Madoff hasn’t substantially helped his problem, complicating efforts to locate assets.
Madoff pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the US Securities and Exchange Commission and theft from an employee benefit plan.
Bernie is bad, but he shouldn’t become the symbol of the crunch.
Bernie fessed up in December, when the market was plunging: if he’d been able to hang on through that until April-May, when the rebound was in full swing, would he had confessed?
Somehow, I doubt it: Bernie was brought down by the slump after Lehman Brothers failed. his up till then undetected scam was a ‘victim’ of the credit crunch, just as his thousands of investors were victims.
What he should really become is a pin up criminal who was allowed to escape for decades by incompetent regulation: both of the traditional black letter legal type and self regulation, as seen in the ways auditors in the US (and here) are subject to minimal checking.
As well, investors who didn’t check what he was doing, before investing with him (and that includes some large banks) should also bear some of the blame.
But the primary blame rests with America’s Securities and Exchange Commission, the primary regulator, which was warned about him, but apart from some rudimentary checks, did nothing.
But players for the blame game should include the former George Bush administration with its mantra of light touch regulation: it might have touched the regulated lightly, but tens of millions of people have felt a heavier impact from the incompetence of US regulators who gave us the credit crunch, courtesy of the subprime mortgage disaster that is still gripping the US economy.
Through boom and bust Bernie Madoff (AKA to investors as Made-off with the money) got away with his scam, even when the economy did poorly he did well, even when the market boomed, he did OK, nothing great, but enough to keep people happy.
And it must also be said that Bernie turned himself in and hasn’t contested the case against him; if he had we wouldn’t have seen him sentenced overnight. We would have been waiting a while yet if he had fought the charges.
Madoff, 71, was sentenced to an effective life term in prison during an emotional court hearing in New York, during which some of his defrauded investors described the shock of losing their life savings.
The swindler, who pleaded guilty to a slew of crimes in the same Manhattan federal court in March, will "speak to the shame he has felt and to the pain he has caused," said his lawyer, Ira Lee Sorkin, before the hearing. He has suggested a 12-year prison sentence. The Feds want 150 years.
Bernie remained mostly silent in court.
Amazingly US investigators still have no idea how much was stolen from clients, and how much was returned because Bernie won’t help.
No one can work out whether he made money at all, or made some and topped up returns with payments from incoming investors’ funds.
About $US13 billion has been traced to more than 1,300 customer accounts and the trustee winding down the Madoff firm has so far collected $US1.2 billion to return to investors.
But according to media reports of the case, Government prosecutors claim $US170 billion flowed through the principal Madoff account over decades and that weeks before his arrest last December.
The sentencing was something of an event: a big court on Manhattan was allocated: that held around 250 people, according to pre trial reports. Two other rooms in the courthouse in lower Manhattan were provided for defrauded investors and spectators to watch on closed-circuit TV.
Madoff and his wife have been stripped of all of their luxury homes and possessions, although Ruth Madoff is being allowed to keep $US2.5 million in cash, according to an agreement with prosecutors.
But now that he’s been sentenced, you watch the American business and other elites try and use his case as a way of ruling off the losses and other loss making disasters we saw in the credit crunch from the subprime machine and the incompetent banks.
Bernie Madoff was allowed to flourish by the inept regulation of his activities, just as the biggest financial crisis seen in 80 years was allowed to flourish.
Regulators at all levels and all types, Governments of all kinds in the US allowed the rorts to develop to a point where bailing out the banks and the economy as a whole has enfeebled the US economy for years to come.
Those commentators in Australia who point to the Madoff case as some type of victory for swift justice in the US versus our snail’s pace process here are right to a point.
The failures of Babcock and Brown and Allco for example, plus ABC Learning were all a result of incompetent management and company boards.
But no one here has confessed and volunteered for jail like Bernie Madoff has. Those who see him as a metaphor for American corporate regulation and its swiftness are ignoring that point.
He like Allco, ABC Learning, subprime mortgages and Babcock and Brown are all testimony to slack and poor re
