Bernie Madoff Scandal

Throughout history there have been many different types of crimes regarding money and greed. This paper will be focusing on fraudulent financial crimes and how they develop among a desperate hopeful society in which only the type of crime can flourish. These conmen are not only criminals, but performers in a sense, and maybe even appear to be magicians hiding ultimately a behind the scenes act. Nothing is ever as it seems, it is what it is made to look like. The performers/con artists not only need an audience otherwise known as investors in most circumstances, but they can establish certain means of props and backgrounds to create illusions as well. That is how so many people get brought into financial schemes, investing hard earned money

Morgan Chase Bank (Johnston, D 2014). The scandal ran for almost 50 years under Madoff’s investment company, Bernard L. Madoff investment securities (BLMIS) (Lewis, L 2013). Ponzi and pyramid schemes start out with investors investing money to a certain entity due to a promise of a highly unrealistic rate of return. In a Ponzi scheme the person will be told they will earn a certain percentage each month. In ponzis and pyramids this however does require a second investor, a third investor and so forth. A second person will invest and that sum of money or a percentage of that money invested, will then be returned to the first investor. It just becomes a chain reaction that eventually collapses due to instability or when new investments dry up (Basu, K

Morgan only had to pay penalties totaling $2.6 billion which only came out to be $0.02 on every dollar the bank had earned after the 5 years since Madoff had been arrested. It was noted that even some of the fines such as one for $350 million was actually less than the profit that the bank generated from serving as Madoff’s main bank. The sad news is that was the main punishment, no bankers were indicted or taken into custody. There could have been actions taken against these indications to stop the fraudulent funds running through these bank accounts. All of the penalties and suffering will ultimately end up getting paid by all the shareholders and investors who had nothing to do with the theft, but ultimately were the ones being conned and perhaps did not even know it (Johnston, D