Never Steal Anything Small - Madoff Edition

I have the greatest respect for thieves. Every man born to wealth has a good thief amongst his ancestors, somewhere. ~ Ming Tzu, Xena (episode, The Debt)

Bernard Madoff is very lucky that the Ponzi Scheme already has a name or it would be named after him. My prediction is he will never see the inside of a prison cell.

Connected Up the Wazoo

I'm very close with the regulators...As a matter of fact my niece just married one. ~ Bernard Madoff

Bernie (Can I call you Bernie? I feel like I know you.) was connected. You can't throw a stone in the corridors of power without hitting a Madoff family member or a friend of old Bernie. Attorney General Michael Mukasey's son is one of Bernie's lawyers. His niece, Shana, was married to a senior inspections and examinations official at the Securities and Exchange Commission (SEC).

Bernie's two sons, Mark and Andrew, allegedly squealed on their pop to the Feds. Mark and Andrew were codirectors of trading at the Madoff investment firm. Yet, allegedly, didn't figure out the fraud until well after the stock market began tanking (re: Andy). Mary Schapiro, Barack Obama's choice to head the SEC, thought so much of Mark Madoff's judgment she appointed him the board of the National Adjudicatory Council in 2001. Heck, the entire Madoff firm was a family affair.

Madoff was one of the founders of NASDAQ and was a former chairman of NASDAQ. Take a second to get your mind around that concept. One of the major stock trading floors in the world was founded, in part, by a man trying to facilitate his criminal enterprise.

You've Got to Spend Money to Make Money
Bernie understood this basic maxim. He was generous giving to charities and damn sure everybody knew how generous he was. It was part of marketing his fraud. That generosity allowed him to kiss up to wealthy people. They trusted him because a crook wouldn't be so charitable. Or, so they thought. They forgot that Al Capone was a charitable man too.

O What a Tangled Web He Wove
As Slate points out, even people who caught a whiff of the rotting flesh and got their money out of Madoff's clutches years ago will not escape the effects of his crimes. According to how courts had treated previous Ponzi Schemes, people who benefited from a Ponzi, even if they got out years and decades ago, will be required to return their profits. The $50 billion in the headlines is just the beginning. That will be small change after they go back to the beginning and sluice out all of the early investor profits.

About Never Seeing the Inside of a Prison
Madoff is 70 years old. The Feds are going to need his cooperation to sort through the twisted entrails of his investment schemes. It will be years, maybe decades, before any criminal trial could even begin. Bernie Madoff will be long dead before he can ever be tried for his crimes.