Where'd the money go?
 

I need some help here.

What is so difficult about finding the money Bernie Madoff stole? I have been told that its almost impossible to make a very large sum of money disappear because whatever you buy has value and can be traced.

Houses and real estate should be easy. Most cars lose value, but many would not, but their existence should not be too hard to find.

I understand that hamburgers would disappear, but wouldn't that be a small piece of $50 billion. Travel should not be too hard to trace.

A vast amount of the 50 billion dollars would have to be transfered through banks, checks and wire transfers. Even PayPal. Traceable.

A lot probably went to other investors to pay their "returns." It would seem that an awfully lot would have to be lying around though in family assets, secret bank accounts.

So why can't authorities find any more of Madoff's thievery and restore it to those who lost so much?

If remaining people in the family and in the company stand in the way, there should be a life sentence in store for them, too.

It would be good if officials who were informed of this scam were made to forfeit a good chunk of their own wealth. That would be justice.

Incidentally, who believes that any ranking people in the company are unaware what went on?

I know what you mean, Tony. I would seem that the authorities would have high tech software to track the money down.
On the other hand, this whole operation was very sophisticated. Me thinks that off-shore accounts using aliases would be hard to trace. The things that they can do electronically is amazing.
Alot of people are under the impression that only the top guy in a Ponzi scheme gets rich. Not so. Many people in the top echelon are the beneficiaries.
Also, greed on Madoff's clients was a big factor. People got so drunk on money that they remortgaged their homes to get more returns. There was a feeding frenzy, to be sure.

I have to think they can follow the money. They better.

Supposedly his sentence is to send a message. And he will not be going to one of those spa prisons or whatever like so many of them do. That is supposed to send a message, too.

But if that money is not traced and if more do not go to jail, the message sent, I am afraid, will be that the odds of getting by with it make it worth taking a chance for the slime population. And there are plenty of others who are wired like Madoff and quite capable of the same thing. Maybe not as big. But there just the same.

(If you read this in a book, you might say the plot was contrived. How could it happen? On such a scale? It is surreal. And his name is Madoff. That name would never get past an editor if this were a work of fiction submitted for publication. The editor would tell the writer that the name Madoff would be too obvious, actually allegorical.)

They have to get the rest of them. They are cockroaches in hiding. But they are there.

And the psychology of how and why people just turn their money over is complicated and fascinating and tragic and full of lack of confidence and also over-confidence. And they don't even ask questions. Just hear what they want to hear.

This whole thing is the stuff of which bestsellers are made. But here it is -- real.

Boomer

My understanding is the latter money went to pay the returns on the money that the original investors put in. He never really invested the money in anything that earned a interest rate anywhere near what he was paying out. In effect, most of the missing money was probably paid out to investors, as well as finance his fancy lifestyle and that of his family and associates.

If he is paying out returns of 10% for ten years to you and not really investing, at the end of ten years he was returned all your money. Most of these people were probably living off their returns and some of their principal. If after that period of time, the same person requests some or all of his principal, he would have to take from someone else to meet the redemption. Considering this happening hundreds or thousands of times, that is where the money went.

List of Madoff''s victims
 

Tony,
First of all, like you I'm somewhat amazed that they can't do a better job of tracking that money. I know money is fungible and all that and there's all those off-shore secret accounts, but . . .

Anyway, I've been thinking about another aspect of the Bernie fiasco for a day or two and meant to include in among my random musings. A lot of people were/are concerned about Bernie's 150 year sentence, thinking it is way too much for a guy old enough to live in TV. Well, I think I came up with a fair alternative. First the gov't folks gotta get their rears in gear and find out how much ill-gotten gains his wife and kids ended up with -- and we all know they did. So, say the kids each got about 10% of the loot. Give them each 10% of Bernie's sentence. Give the brother 10% as well, just for the hell of it (almost forgot him). It's not unreasonable to assume that Lady Macbeth Madoff got at least 20%, so give her 20% of the sentence.

Now we got each of the sons and the brother getting 15 years in jail apiece. Mommy goes up for 30 years. And Bernie's sentence is reduced to a reasonable 75 years. :coolsmiley: Everybody's happy, but we still can't find the swag.

Just a thought.




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