As many people are well aware Bernie Madoff received the maximum penalty of 150 years behind bars for running a Ponzi Scheme for 17 years today by a New York District Court Judge. Many people applauded Court Justice Denny Chin for slapping Madoff with a maximum prison sentence in order to set an example to other swindlers and frauds that the United States will not tolerate any person, who commits a crime as atrocious as Madoff's. If you are not too familiar with the Madoff situation, here's a few basic details about what happened. Bernie Madoff was a former financier in the stock exchange, who set up a Ponzi scheme to launder $65 billion of his clients' money. A Ponzi Scheme, which is named after Italian scam artist Charles Ponzi, is an illegal pyramid scheme where an investor, such as Madoff, takes in large sums of money from new investors and uses the money to pay off earlier investors until he can't get any more new investors. The scheme then collapses and the new investors wind up losing everything. Due to Madoff's high power and wealth, he was able to keep this going unnoticed for over a decade and it's the largest Ponzi scheme to be run of all time. I know, it's really disgusting when you think that you're giving your money to pay off older investors and that's why many people are excited to see that Madoff will rot in the jail cell.
However, Madoff's jail sentence is only half the battle, especially for all those poor people, who were deceived by Bernie Madoff. All these people want to get their money back, but the problem is that Madoff swindled $65 billion of clients' money. Let me repeat that because it's very important. BERNIE MADOFF SWINDLED $65 BILLION OF CLIENTS' MONEY. How exactly are all these people going to be able to get their money back? According to Eyewitness reports, Madoff's clients will only get a small amount of the money that they had lost from Madoff's scam. Unfortunately, the lawyers of these clients have said that even getting back that small amount of money could take a few years.
It's such a shame that these poor people are going to be robbed out of all that money, especially when Madoff has a large net worth. So I'm glad that Justice Chen just didn't give him a slap on the wrist like what happened Martha Stewart. Then again, Stewart only lied about insider trading, which is not as bad as taking advantage of people's money. He definitely deserves the maximum punishment for what he did to his clients, but that's still not enough to compensate for what he did.
I think Ruth Madoff knew about his Ponzi Scheme and deserves to serve some time with her husband as well. This year, they'll be married for 50 years so she really has to be extremely naive to not realize that her husband has been swindling $65 billion for 17 years. Ironically, it was Madoff's sons, who uncovered their father's Ponzi scheme in December 2008 and reported him to the feds. I honestly would like to see Madoff's net worth get portioned off to all of his clients. Until those investors find some of their money back into their own pockets, they can parade the streets of Manhattan celebrating as Judge Denny Chin proved today that nobody messes with people's money in my city and gets away with it.
This has been Ian Feldman speaking words of wisdom.
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Food for thought: How about all the taxes paid to the government on the phantom returns?
On a more serious note, is it even possible to repay the victims of his scheme? Even assuming there is enough money (which is a rather large assumption), not all of it is liquid, and a forced divestment may hurt innocent enterprises. I do agree that more should be done, but there is not much to be done.
-Lorenzo
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