Bernard Madoff–a major Wall Street money manager, former president of NASDAQ, and a pioneer of online investing–has confessed that his investment company is nothing but a colossal Ponzi scheme and that all of its $50 billion is gone. Many prominent Jewish charities and formerly rich socialites have lost everything. From $50 billion at stake after Wall St broker Bernard Madoff is arrested over ‘world’s biggest swindle’ :
The FBI claims that three senior employees of Mr Madoff’s investment firm turned up at his apartment on Wednesday to ask questions about the company’s solvency. Two of them are believed to be his sons, Andrew and Mark, who have worked for their father for two decades.
Mr Madoff told them that he was “finished”, that he had “absolutely nothing”, and that “it’s all just one big lie”. He said the investment arm of his firm was “basically a giant Ponzi scheme”, and that it had been insolvent for years.
A Ponzi scheme, named after the swindler Charles Ponzi, is a fraudulent investment operation that pays abnormally high returns to investors out of money put into the scheme by subsequent investors, rather than from real profits generated by share trading.
The FBI complaint states that Mr Madoff told his sons that he believed the losses from his scheme could exceed $50 billion. If that is the case, his fraud would be far greater than past Ponzi schemes and easily the greatest swindle blamed on a single individual.