I have no special insight into the Madoff story.
However, my spidey sense is tingling.
Consider this: Running a billion dollar Ponzi scheme has to be very time consuming. Running a $50 billion Ponzi scheme by yourself, at age 70?
I don’t think it can be done.
Just generating the phony transaction receipts is a full time job. How did this son-of-a-bitch do it all by himself? Madoff HAD TO HAVE HELP.
I simply cannot believe he did it himself, all alone. His entire scheme was predicated upon finding another 1% of assets every month to payout to the prior investors. Between raising moeny and running operations, it was more than a 1 man job.
And when the market hit the skids and topped out so fast — it fell much quicker in 2008 than in 2000 — he ran out of manuevering room. Madoff had to know he was going down, and everyone who was working with him — everyone who knew of the scheme — they were going down, too.
So he confessed — TO HIS SONS. AND THEY TURNED HIM IN.
And Bloomberg reports they are already represented by Martin Flumenbaum, a lawyer.
Maybe I’ve read one too many detective novels, but consider this strictly hypothetical, based on-no-facts whatsoever, wildly imaginative hypothesis: If I were running a $50 billion Ponzi scheme, I would have to bring in someone close to help me with it.
Who is closer than my family?
When it became clear there was no where else to turn, instead of bringing down the entire dynasty, I would have them turn me in, to protect the family and what left of the legacy.
I would take the fall so they wouldn’t have to.
As I noted, I have no special facts, no insight into this what-so-ever. Other than the story we have been fed so far doesn’t make any sense.
Who was Madoff’s accomplices? I have no idea, but there has to be some! If I were the SEC, I would be looking over close friends and family closely. Very, very closely.
UPDATE: December 16, 2008
Dealbook notes that
Federal investigators have found no evidence so far that members of Bernard L. Madoff’s family helped him carry out what may be the largest financial fraud in history, The New York Times’s Alex Berenson and Diana B. Henriques reported, citing a person briefed on the case
Mr. Madoff’s sons, Andrew and Mark, and his brother, Peter, all occupied senior positions at his firm, Bernard L. Madoff Investment Securities, whose assets were frozen after Mr. Madoff told law enforcement agents on Thursday that he had defrauded investors of up to $50 billion.
Although the enormous scale of the fraud prompted widespread questions about whether one person could concoct all the necessary paperwork such a fraud would entail, Mr. Madoff, 70, had insisted that his family was not involved in the Ponzi scheme. He said it was “all his fault,” according to a criminal complaint filed last week.
And so far, investigators have not uncovered evidence that contradicts those statements, The Times said, citing the person briefed on the case, who was not at liberty to comment publicly on it.
The person cautioned that the investigation was in its earliest stages, and examiners could still unearth evidence that Mr. Madoff’s family knew about the fraud or even helped carry it out, The Times said.
But employees of the firm have said that Mr. Madoff’s sons and brother all seemed shocked on Thursday after the fraud was disclosed and Mr. Madoff was arrested. One of Mr. Madoff’s sons had a substantial amount of money invested in the accounts that Mr. Madoff managed, investigators said.