Ponzi Scheme Gone Wild: Extreme Story of Criminal Defense
Madoff’s criminal fraud met with symbolic retribution
Bernard Madoff’s fraud scheme is a criminal defense story of epic proportions. A story that began as an extreme Ponzi scheme concluded on Monday, June 29, with a 150-year prison sentence for Madoff, former non-executive chairman of the NASDAQ stock exchange, The New York Times reported.
Federal District Judge Denny Chin condemned Bernie Madoff’s crimes as
extraordinarily evil. Judge Chin responded to the white-collar crime and extreme abuses of global neoliberal deregulation in what some call a symbolic manner.
He cited the importance of symbolic deterrence, retribution, and restoring trust in a system of justice by instating the maximum sentence. Madoff’s criminal defense attorney had previously asked for a lenient 12-year sentence.
The Original Ponzi
Madoff swindled $50 billion dollars in a gigantic Ponzi scheme. A Ponzi scheme is like any other pyramidal or
get-rich-quick scheme, where investors are wooed with promises of high economic returns.
The scheme is named after the 20th century Italian-American con-man, Charles Ponzi, who promised investors a high return in foreign postage coupons.
The key to a Ponzi scheme is a delayed payment period, where investors are forestalled by the prospect of exponential returns. Ponzi was able to pay off short-term investors as the money rolled in.
Investors were blinded to the reality of the purse-strings and when they went to cash in, the empty purse-strings were revealed and Ponzi was exposed.
Madoff’s Sentencing Statements
Madoff apologized for his crimes in the courtroom immediately following his sentecning, claiming that he was
responsible for a great deal of suffering and pain. He continued,
I live in a tormented state now, knowing of all the pain and suffering that I have created. Facing his gathered victims for the first time, he said,
I am sorry, recognizing
I know that doesn’t help you.
Madoff waits to find out where he will serve his sentence from the Bureau of Prisons from a cell at the Metropolitan Correctional Center in lower Manhattan.
Some prosecutors were surprised by the severity of the sentence and symbolic deterrence. Professor James A. Cohen of Fordham felt that symbolism does not have
a very important part in sentencing. He agreed that
a life sentence was appropriate, but that this struck him
as pandering to the crowd.
One Big Lie
one big lie epitomizes economic greed and pride and comes crumbling down in a time of financial fear and at great expense to innocent victims including Steven Spielberg, the Elie Wiesel Foundation for Humanity (which memorializes the Holocaust), and Larry King.
Suspicion has circulated around Madoff’s wife, Ruth, in terms of her involvement and knowledge. She has claimed no involvement or knowledge of her husband’s Ponzi scheme until he disclosed his criminal activity to her just before his arrest. She recognizes that suspicions have escalated in her silence but was advised to remain so from her lawyers. She acknowledged her betrayal and confusion too and claimed that
the man who committed this horrible fraud is not the man whom I have known for all these years. A preliminary court order has left Ruth with $2.5 million of her husband’s assets.
Madoff’s defense lawyer, Ira Lee Sorkin questioned the 150-year sentence claiming that vengeance is not the goal of punishment. A story of extreme criminal fraud is met with extreme symbolic retribution.
Source: New York Times