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On 29 June 2009, Bernard Madoff pleaded guilty to defauding investors and was sentenced to 150 years in prison. The 71 year-old swindler is due to be released in 2159.
Madoff’s $65 billion investment fraud has been referred to as a gigantic Ponzi scheme “dating at least as far back as the 1980s” (The Economist).
A Ponzi scheme is any kind of fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any profits earned. The scheme is named after Charles Ponzi who used the technique in 1920 to attract so much money that his operation became infamous throughout America.
Given the enormity of Madoff’s investment fraud, perhaps we should start referring to this kind of fraudulent operation as a “Madoff scheme”.
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A ‘Madoff Scheme’… I like it!
Actually, there was a fascinating documentary about Bernard Madoff last night on Four Corners which is well worth a watch.
http://www.abc.net.au/iview/#/series/four%20corners