Transparency International’s annual report on worldwide corruption has revealed that inadequate laws expose whistle blowers and hinder the fight against corruption.

The worst offending countries were Somalia, Afghanistan,Myanmen and Sudan.The least corrupt country was New Zealand,followed by Sweden,Findland,Australia and Canada.

Read more specific incidents on corruption including Saddam Hussein’s withdrawal of $1b the day before the first bombs landed on Baghdad…

Madoff’s family who all worked at the ‘firm’ are being sued for $199 million. This includes Bernard’s brother Peter, his two sons and his niece.

Trustee, Irving Picard, is suing, Madoff’s brother, Peter, who was the investment securities firm’s chief compliance officer. The sons, Andrew and Mark, served as co-directors of trading, while the niece, Shana, was the compliance director.

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Ruth Madoff, the wife of Bernhard Madoff, the creator of the $65 billion ponzi scheme, the largest ever recorded, has agreed to give up her claim to more than $80 million worth of assets, for being allowed to keep just $2.5 million cash. This amount of money would have been considered only pocket change by the couple, a few months ago.

The agreement was arrived at with the federal prosecutors. The Madoff’s were claiming the nearly $70 had been accrued independent of the ponzi scheme and were in Ruth Madoff’s name.

71 year old Bernard Madoff is to be sentenced to 150 years imprisonment and is facing the rest of his natural life in prison. Madoff has not named any accomplices, though few believe he acted alone.

Ruth will be forced to look for a new home, as their $7 million apartment in Manhattan and $11 million Palm Beach house in Florida, plus a $3 million home on Long Island are all sold, besides their boats and cars. Ruth could have been facing both criminal and civil charges, though her involvement in the ponzi scheme is hard to prove. Ruth says she is betrayed and confused by the actions of her husband. “The man who committed this horrible fraud is not the man whom I have known for all these years.”

At the time of Madoff’s arrest, Ruth Madoff held $45 million in municipal bonds, plus $17 million in a bank account. She also withdrew $15.5 million in the weeks leading up to her husband’s arrest. The couple was caught trying to pass pieces of expensive jewelry to family members, at the time of the arrest.

Currently Ruth has been dubbed as the ‘Loneliest women in New York’, as past acquaintances distance themselves from the beleaguered couple. “She wants enough to live on the rest of her life in peace,” said one of the legal sources who didn’t want to be named.

The questions remain – Surely the Madoff’s did not hold all their assets in one place? And is the $2.5 million a payoff for not being prosecuted alongside her husband?

There is always someone or something that symbolizes the greed, corruption and stupidity of an era. Jewish born Bernard L Madoff, ex Wall Street chairman and founder, is one of those stories, that symbolized the era of ‘easy credit’. A time that brought nations crashing to their knees, around the world, in the worst recession since the Great Depression of the 1930’s.

Seventy year-old Madoff masterminded the greatest ponzi scheme that the world has ever seen. Madoff’s wife worked with him from the inception of the scheme.

Madoff’s customers earned extraordinary interest, even though the world of finance was crashing down around everyone’s ears. Madoff fed off people’s greed and stupidity and became the world’s Super Thief by using 11 simple rules.

1. Madoff’s Project Breathed Exclusivity - Madoff pulled his clients from exclusive clubs, while rejecting many other would-be clients, thereby creating an instant exclusivity. He then used his ‘A’ list of investors to attract others. He made people feel they were ‘lucky’ to finally be included in the scheme.
2. Madoff Was Well Connected - Madoff and his wife were once described as the ‘Must-Know’ people on the social circuit. The world’s wealthiest and most famous people were often invited to spend time with the Madoffs on their 55 foot boat, or at one of their three opulent mansions.
3. Madoff Was Well Liked And Highly Respected - Madoff and his wife Ruth, cultivated a feeling of well-being in all those around them. They gave the appearance of being such likeable people, only out to help others, that Madoff in particular, was held in high regard by the rich and famous.
4. Madoff Networked - He got his ‘friends’ to recruit on his behalf. This allowed Madoff to gain access to the wealthy all over the world. Madoff was a prominent member of the Jewish community.
5. Madoff Offered A Business Plan - A ponzi scheme, where money from new investors paid out older investors. All this without actually making any investments.
6. Madoff Had The Salesman’s ‘Dream Talent’ – The Gift Of The Gab - Madoff was never backwards in coming forward with a swift and timely word of advice for his investors.
7. Madoff Manipulated Credibility -Madoff advised his new investors to being small and build up their investment. This added to the credibility of the scheme.
8. Madoff Had The Appearance Of Doing All The Right Things - While Madoff was an originator of the concept of Internet access to accounts, he never permitted his clients to do so. Instead he sent out a monthly newsletter, detailing reports to investors showing their ‘trading’ activity and ‘investments’.
9. Madoff Avoided Using Credible Accounting Firms -Madoff refused to use credible accounting and auditing firms. Instead he used a totally unknown firm that had no accountability, allowing Madoff to freely ‘cook the books’. Madoff never permitted any outside performance audits.
10. Madoff Established A Relationship With The Regulators - Many people raised concerns about the steady rate of interest his investors were receiving, when the economy was in a long hard downturn. Well known critics openly stated it was mathematically impossible for Maddof’s investment strategies to return what he said they did. In spite of several investigations Madoff always came up squeaky clean. Madoff freely admitted he was ‘close to the regulators’ and was known to have lied to the SEC. In fact, Madoff was an advisor to the regulators, as the former chairman and founder of the NASDAQ, as well as an adviser to the Securities and Exchange Commission.
11. Madoff Was A High Profile Donor - Madoff was never backward in coming forward as a political donor and philanthropist. Madoff and his wife set up a charitable foundation, donating freely to hospitals and theatres, as well as research programs.

Now having heard how Madoff beat greed, corruption and, yes stupidity, take a look at the other side of the coin, according to a person who was close to Madoff for over 20 years.

• Madoff was a sexist egomaniac who frequented massage parlours.
• Madoff was irresistible to women and a long-time flirt, with a roving eye (even though Ruth, his wife watched over him like a hawk).
• When under stress Madoff became very abusive of his staff

Madoff’s victims in the ponzi scheme are legendary, including even the clinical Professor of Psychiatry at the University of Colorado, one of the world’s leading experts on financial scams and the author of Annals of Gulibility: Why We Get Duped And How To Avoid It.

The fallout from Madoff’s scheme will be felt for years to come in the land of the rich and famous. Madoff only got caught after confessing to his two sons, the whole business was ‘one big lie’. The biggest lie the world has ever seen. It is unknown how much money Madoff stashed away overseas, before his arrest.

One final point: It has just been released that Madoff’s American Express statement for January 2008 had men-blowing numbers on it. A restaurant - $2,800; Parisian Boutique - $2,000 and a gourmet bagel shop $441, plus many other high ranging charges. It appeared the charges belonged not to Madoff alone, but to his famiy and associates. (No wonder he was well liked and very popular - with some!)

A film on the life and times of Bernard L Madoff is apparently already on its way. Film’s executive producer, Edmun Druilhet, said, “The film will be called ‘Madoff Made Off With America’. Druilhet has been heard to call Madoff a ‘scumdog millionaire’.

No one since Adolf Hitler has ripped so much money off the Jewish people”. There is a website already advertising the film.

Seventy year-old Madoff, the former non-executive chairman of the NASDAQ stock exchange, was convicted of the largest ponzi scheme of investor fraud, ever committed by one person. The scheme, which did not generate any real business, paid abnormal high returns from investors money, at a time when the stock market was beginning its world-wide downturn.

Madoff admitted to defrauding thousands of investors. He faces the rest of his life in prison with up to $179 billion in restitution. He admitted to his sons, prior to his arrest, that his company was ‘one big lie’.

It is reported by a trustee oversighting the liquidation of Maddoff’s assests, that a longtime Los Angeles money manager and philanthropist, Stanley Chais, raked in more than $1 billion in false earnings from disgraced financier Bernard Madoff. The complaint against Chais alleges that his family’s accounts earned wildly inflated returns through Maddoff, of between 40 percent and 300 percent. The trustee says the money was never actually invested in the stock market and the returns came from the pockets of more recent investors.

“Chais’ telephone number is the first speed dial entry on a telephone list at (Madoff’s firm),” the complaint said. “He therefore enjoyed unusually intimate access to Madoff, allowing him an opportunity to gain special access to extensive information about the operations of (the firm).”

The federal court gave investors the okay to force Madoff to file for bankruptcy, in order to try to recover some of Madoff’s assets, which include:

• securities ($45 million),
• cash ($17 million),
• half-interest in BLM Air Charter ($12 million),
• 2006 Leopard yacht in France ($7 million),
• jewelry ($2.6 million), Manhattan apartment ($7 million),
• Montauk home ($3 million), Palm Beach home ($11 million),
• Cap d’ Antibe, France property ($1 million), and
• furniture, household goods, and art ($9.9 million).

The fear was that these assets would end up in the US Treasury, instead of  being proportionally returned to the victims. However, the bankruptcy will only involve any assets that are not part of the proceeds of Madoff’s crimes. (Ha! says Madoff’s lawyers).

Maddoff’s sons reported him to the authorities, effectively putting their own father behind bars for the rest of his life. Mark Madoff is in debt to his parents for $22 million and Andrew Madoff owes $9.5 million. Both boys own Manhattan apartments and homes in Greenwich, Conneticut.

It is said that at the end of a boom there is always some story that symbolizes the greed, corruption and stupidity of the era. No doubt the Hollywood version of Madoff will be a glitz and glamour version. Maybe it is one film certain people will not want to watch.

Madoff is jailed, waiting sentencing in June

The world’s biggest fraud in history was revealed when Bernard Madoff, 70 year old Wall Street guru and trader and ex chairman of the Nasdaq Stock Market was arrested last week. He allegedly masterminded a $US50 billion fraudulent Ponzi scheme. Madoff’s arrest and liquidation of his company adds further fuel to the spiraling costs of a financial world, already in crisis.

Madoff, who was said to be of ‘impeccable reputation’, headed a firm which was supposedly a market-maker for around 350 Nasdaq stocks.

“Madoff’s investors included captains of industry, corporations, (some publicly traded),  that used Madoff ‘s company as if it were a high-yielding cash management account, including endowments, universities, foundations and many high-profile funds of funds,” said Douglas Kass, head of the hedge fund, Seabreeze Partners Management.

A Ponzi scheme is an illegal investment vehicle, that pays off old investors with money from new ones. Like any pyramid scheme it is totally dependent on a constant stream of new incoming investment. Because the invested capital is not able to earn a sufficient return on its own, such schemes eventually collapse under their own weight, as investors are paid with money that isn’t there.

Prior to the arrest, some investors had questioned how Madoff was able to generate annual returns in the low double digits in a variety of market environments, come rain or shine. Many wondered how US regulators were able to ignore the numerous red flags, in regards to Madoff’s operations. However, such niggling doubts were not enough to stop the high-profile organizations, individuals and companies from continuing to take the high return offered by Madoff. A case of grinning all the way to the bank, until you get your fingers burnt.

Continuing in the style of his grandee nature, Madoff is accused, by prosecutors, of wanting to distribute as much as $US300 million to employees, family members and friends, before turning himself in. Just too bad if you are not on the receiving end of such a deal.

Charged with one count of securities fraud, Madoff could face up to 20 years imprisonment and a $US5 million fine. The US Securities and Exchange Commission have filed separate civil charges.

A hearing was scheduled for Friday afternoon in US District Court in Manhattan on the SEC’s request, in order to grant powers to the court-appointed receiver to oversee the entire operations of the advisory business known as Bernard L. Madoff Investment Securites LLC.  It is believed that at least $15 billion has totally disappeared before the firm’s assets were frozen.

“The hearing was cancelled after the matter was resolved,” said a deputy for US District Judge Louis Stanton. No other details were immediately available. Madoff was released on $US10 million bond.

Billions of dollars were entrusted through the firm’s clients by high-profile organizations and individuals. Believing it to be a once in a lifetime Blue Moon Opportunity,  such charities as set up by Hollywood director Steven Spielberg used the company’s services and invested money with Madoff.  Other victims were a foundation set up by Mort Zuckerman, one of the world’s richest media and property magnates in the US, Frank Lautenberg’s foundation, besides dozens of Jewish organizations, sport team owners and a senator from New Jersey. The tragedy is that those charities will now suffer along with everyone else’s financial misery.

US authorities are presently liquidating the company.

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