Comment on victims of the Madoff scam (pension, social security, state)

[RichCapeCod]

I was watching a “finance” show, On the Money, on CNBC. A couple was on, victims of the Madoff Ponzi scheme. They’d been retired four years (the guy had been a NYC Corrections Officer) and have been taking their retirement money from the Madoff “fund” during that period. They had (on paper) $1.6 million dollars in the fund and, if I understood them correctly, they’d been in the bogus fund for twenty-eight years. At any rate, they were understandably upset and wanted to get some of their money back from somebody.

I’ve been thinking, if they had $1.6 million dollars in the Madoff account now, and they first put their money in twenty-eight years ago, at the phony percentage growth stated by Madoff they might have put in to the Madoff scam somewhere between $200,000 to $250,000 dollars (at around ten percent return, in the time frame they spoke of, that amount would grow to just about the $1.6 million dollars they thought they had in that account.).

So, if they took out their interest for three or four years, they may, in fact, be technically whole ($160,000 a year for three or four years of withdrawals would be a larger amount then the original monies they put in – again, if I’m understanding them correctly).

Don’t misunderstand me, these folks have still been royally screwed over. But, to make their situation even worse, I’m not sure they’re going to have any recourse in regard the return of money to them.


Rich

[ConeyIsBabe]

YES, she was really upset with the government for not "protecting" her $$$. I don't understand why they didn't diversify their money (not putting all their eggs in one basket) like all financial experts tell people to do.


I lost a lot of $$ in the stock market in early 2000 and blame MYSELF for not paying attention and not selling when I should have.

I hope JUSTICE prevails !

[nancy thereader]

I DID take my money out of the market before it collapsed and told my advisor to put it into a money market. Instead , he put it into junk bonds and lost almost everything. Very casually, just like Madoff. Even though it is not on a large scale; proportionately , it is the same.

[car54]

I saw that show. What struck me was it sounded like they were claiming to be flat broke....unable to even buy food. This scam just broke the other day! How could they have had every dime invested with this crook?

What about the the guy's NYC pension?

My portfolio is down a couple hundred grand....but I still have other money coming in.

Reminds me of the old saying, If it sounds too good to be true....

[litlux]

The first requirement to be fleeced by a Ponzi scheme is to be greedy yourself. It is an essential requirement for being conned.

[NewToCA]

Originally Posted by RichCapeCod

I was watching a “finance” show, On the Money, on CNBC. A couple was on, victims of the Madoff Ponzi scheme. They’d been retired four years (the guy had been a NYC Corrections Officer) and have been taking their retirement money from the Madoff “fund” during that period. They had (on paper) $1.6 million dollars in the fund and, if I understood them correctly, they’d been in the bogus fund for twenty-eight years. At any rate, they were understandably upset and wanted to get some of their money back from somebody.

I’ve been thinking, if they had $1.6 million dollars in the Madoff account now, and they first put their money in twenty-eight years ago, at the phony percentage growth stated by Madoff they might have put in to the Madoff scam somewhere between $200,000 to $250,000 dollars (at around ten percent return, in the time frame they spoke of, that amount would grow to just about the $1.6 million dollars they thought they had in that account.).

So, if they took out their interest for three or four years, they may, in fact, be technically whole ($160,000 a year for three or four years of withdrawals would be a larger amount then the original monies they put in – again, if I’m understanding them correctly).

Don’t misunderstand me, these folks have still been royally screwed over. But, to make their situation even worse, I’m not sure they’re going to have any recourse in regard the return of money to them.


Rich

Your analysis assumes they reinvested their dividends. As I understand the workings of the fund, they should have been getting cash distributions each month in addition to any growth in their core investments. It is the payout to the earlier investors via the use of the newer investors money that makes this a Ponzi Scheme.

[StealthRabbit]

Originally Posted by NewToCA

... It is the payout to the earlier investors via the use of the newer investors money that makes this a Ponzi Scheme.

like social security?

[Jack M Samardzija]

Was Madoff alone to blame Dear readers
it would appear that another alleged ********* was uncovered and thousand of suckers discovered, namely i am of the opinion that Mr Madoff as intelligent as he is could not pull this of on his own, there would have to be many accomplices for (alleged) fraud of this this magnitude to be affected.

Firstly
which fund manager and or fund it self guarantees the returns or even the original amount invested, not one, it is all speculative investments not much different then shares or investment in the stock market.

Many investors have lost lot of money on value of share all over the world, in particular in Michael Milken investments better known as "junk bonds" , difference between Milkens,Madoff's ,stock brokers and general funds and their managers is insignificant.
Why
because it is all speculative investment and it should be treated as such, savings account holders in the banks are and would be innocent victims by losing their savings, all the other investors in all the funds and in particular Madoff investment are only greed orientated speculators.
Having said this, it does not justify Mr Madoff wrong doing (if any) i am merely pointing out that it takes more then one to play tango, investors are just to blame as Mr Madoff if not more.
Why
because they were looking for high returns without due diligence and research in to the fund they were investing in, high returns certainly brings high risk any investor large or small knows this, Madoff must have done something right all these years and he must have paid investors their 10-18% pa did he not?

Question is
how many investors have been collecting these high returns and for how long, if you take say investor that was being paid 12% average over the last 10 years while the Government bonds (if you can call them secure investment) and savings account was paying 3-5% p.a what is their loss today ?
If Madoff investors get 20cents in $ some of them will still be way ahead then if their money was in the bank, keeping in mind that banks are shaky investment right now.
Note, this only applies to long term investors with Madoff, the ones that have come last they have huge loss (all of it less 20% if and when they get it)

Criminal charges
this aspect of this case is of interest to me the most, why, what is Madoff been charged with, fraud, conspiracy to commit fraud (prosecutor needs accomplices) how much of the money is missing and how much is invested in up to yesterday blue chip AIG 's of the world.

It is alleged that Madoff's sons have reported him to the authorities after he allegedly admitted to them what he had done, if i was the prosecutor i would first look for the motives for sons to report their 70 year old father (who made them very rich by the way) unless it was part of elaborate clever manipulative trick to get the authorities away from them self's.

According to the reports Mr Madoff has send gold watches and other valuables to his relative including his sons (that have reported him), would any wise man smart enough for this scheme be so naive, no i do not think that is possible.This gesture of reporting their farther for the gifts is just another form of confirmation that they are part of the scam, it would appear that this act to report their father is joint family decission once again master at work (damage control).

It is my humble opinion that prosecutor in this case (as it is usually) is not up to speed with the workings of funds like Madoff and Madoff's attorneys will have upper hand at all times.
Note;
it is very important to read the terms and conditions of investing in Madoff funds, i am certain that in fine print there are no guarantees just like in Vegas or Atlantic city, just because investors trusted Mr Madoff does not mean that he intended to defraud them at the time when he took their money, this is what the prosecutor needs to prove in order to secure criminal conviction.
For this to happen prosecutor would have to be an ex fund manager or at least Wall st. exec. to understand the game before he can go hunting, knowing who (in most instances) gets to be a prosecutor i feel that Mr Medoff's skills will once again prevail in negotiating a plea that suits him.