Tuesday, January 27, 2009

How guilty is the Madoff family?

Here is an article in The Daily Beast today saying that Mrs. Bernie Madoff must have been involved in the Ponzi scheme perpetrated by her husband.

This couple must have just kept the money they were entrusted by others to invest, while Mr. Madoff entered fallacious information into the electronic trading system he helped to create, the Nasdaq as former Chairman. As I said in my earlier blog entry here, the idea that she could not have had some idea is absolutely too much for me to believe. How stupid and duped could anyone in her position be? And what about the other members of the family? How much could they have known? Here are excerpts from a compelling piece of writing by Lucinda Franks.

Courtesy thedailybeast.com

It was Ruth Madoff who oversaw the books on all three of these accounts, and it was the comingling of money from them—contrary to regulations that require such accounts to be kept separate—that enabled the elaborate shell game. It also meant that some investors' money was not invested for their own benefit but went into Madoff's personal assets.

...Others involved in the case point to the fact that Mrs. Madoff has not hired her own lawyer as an indication that she knows more than she has previously revealed. A close business associate of Madoff’s shares that skepticism: “If she knew nothing, wouldn’t her husband, who was so protective of his family, insist she have a different lawyer?”

...In another key development, a person close to the case says Madoff has admitted to law-enforcement officials that the Ponzi scheme began more than 40 years ago—much earlier than previously believed.

...Another indication that bolsters federal investigators’ certainty that Mr. Madoff did not conduct this massive fraud alone is the recent discovery of as many as 20 million documents from the firm that are stored in a warehouse in Queens, many of which shed light on the scheme. No one could create that amount of paper without considerable help.

Great article. So Mrs. Madoff kept the books? Sheesh!!! Let's hope the investigation doesn't go on for decades, or slip away from news coverage as they would no doubt prefer. Please share your comments. Was Mrs. Madoff kept forcibly away from the details of her husband's business transactions for forty years? Was she part of an affluent segment of American women who accepted not knowing all about their husband's business? What do you prefer to think?

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