Bernard Maidoff's financial pyramid is called the largest scam in the history of the United States. More than 3 million depositors suffered damage by almost $ 18 billion. The chadder of a furist was carried by businessmen, charitable organizations, celebrities and politicians, not doubting the security level of deposits. The fraudulent scheme was founded around Madoff Investment Securities LLC in the 1990s, it was able to reveal it in December 2008 - almost 20 years later.
Number of pyramid
Bernard Lawrence Maidoff, a graduate of the prestigious Far Rockaway High School, opened Bernard L. Madoff Investment Securities LLC in his 22 years, for $ 5,000, accumulated on the part-time jobs while studying. The organization quickly gained popularity among investors. At first, the company was invested in risky shares of firms that were not included in the listing of the New York Stock Exchange. The introduction of computerized trading made it possible to perform up to 6% on NYSE. The company's turnover grew, participation in the Council of Directors of Nasdaq brought him the glory of a living legend on Wall Street.In 1987, Dow-Jones index fell, Exchange Panic forced Meadoff to look for new sources of income. Against the background of general sentiment, several large investors on the market expressed their readiness to entrust him to the means. Provide a high profitability of the financier could not, but did not want to refuse to customers, he ventured and went to deception.
How the scheme worked
Money fraudster translated into his accounts in Chase Manhattan Bank, arguing that his scheme for investing is absolutely new and difficult to understand. Impeccable reputation allowed him to attract more and more new funds and pay 12-13% of them profits. If first Bernard hoped to return to honest investment as soon as the situation in the stock market stabilizes, then in the future he could not refuse incredibly profitable majynation.
The audacity and enterprise Maidoff allowed to avoid audit. The limit of confidence in it was almost unlimited. In 2000, the Securities and Exchange Commission ignored the calculations of the analyst of Harry Marcopolos, who managed to understand the mechanisms of the scam. But in 2002, the attracted funds could no longer cover the promised dividends.
The financial crisis in 2008 laid the end of the pyramid. When several large contributors demanded to pay about 7 billion dollars at the same time, Maidoff could not find money. Under the severity of themegnet, the fraudster confessed to his sons, and they immediately contacted the authorities. Perhaps, do not happen in the stock market global shocks, Meadoff Foundation continue to work.
Conclusion
The total deposit amount was tens of billions of dollars. For the past 16 years, no one guessed the fraudulent essence of the organization, as the depositors paid to 15% per annum. According to the results of the investigation, the court sentenced him to 150 years of conclusion. Several people committed suicide after the results of the affairs were made public. In April 2020 Maidoff turned 82 years old, he continues to serve his sentence.
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