Bernard Madoff's Ponzi Scheme Case Study

In this paper I will be analyzing the research on Mickey Monus and his fraud crimes. I will exam the fraud and how it applies to this course, such as where it belongs on the fraud tree. Along with what type of fraud was committed, and how they got away with it for so long.

Michael Moore once said, “Capitalism is an organized system to guarantee that greed becomes the primary force of our economic system and allows the few at the top to get very wealthy and has the rest of us riding around thinking we can be that way too - if we just work hard enough.” Had Horatio Alger met Michael Moore, he would have agreed with his sentiments about greed being a dangerous force in a capitalist society. He also would have supported the fact that Americans are hard working, but Alger, in his book Ragged Dick, paints a more optimistic view of the “respectable core” of hard working magnanimous people who made his 1860’s society work. In Alger’s depiction, holding on to respectability and disavowing greed, in addition to hard

There are different types of “white collar crime” that exists inclusive of fraud, embezzlement, insider trading and Ponzi schemes. “White collar crime” affects everyone and the main driving force of the perpetrator of the white collar crime is mainly greed plain and simple. There are different theories associated with “white collar crime”. One of these such theories is the rational choice theory. The rational choice theory indicates that persons have a choice of whether to commit an offence or not. In this case “white collar crime”. Therefore, before committing the crime the offender weighs the pros and cons associated with the crime. The offender who decides to commit “white collar crime” goes about it in the everyday activities in their job. The offender on a daily basis will observe a certain type of “white collar crime” taking place in his workplace and during the daily or routine interaction with his colleague who is carrying on the crime, will learn how to commit the same type of “white collar crime”

Pavlo said in an interview that he wanted to advance his career and was very eager to make his way to the top level position of the management of the organization (Portal, 2008). He also told that he was rewarded always by doing bad things. Although, he was at pressure in meeting the company’s goals; but he managed his superiors and made sure that he was doing good in fulfilling the company’s goals. He also rationalized his fraudulent activities by hiding the customer’s late payment in order to be benefitted himself, but said that he was helping people more than he was helping himself.

Rational choice theory is the most useful for understanding white collar crime. These are crimes that often require specialized knowledge, or access. They are often committed by individuals with advanced educations. This theory is vital to contemporary political science in addition to other chastisements for instance sociology and philosophy. The core of the rational choice theory can often be challenged amongst several courses of encounters, people typically do according to what they consider to result in the best inclusive outcome. A white collar crime is committed to make profits, they are not the acts of madmen or irrational people. They are rational acts that often require planning and careful

Throughout the case, it can be seen how Cendant Corporation was performing activities that dealt with the interactions of income smoothing. The main cause of performing with Income Smoothing was to make their shareholders and investors believe that they had a professional and ethical operation running. Income smoothing can best be represented as how either gains or losses from a certain period are taken into a good or bad period with losses or no profits. Income smoothing throughout this case was used as an unethical practice performed by Cendant Corporation to achieve financial stability and falsify numbers to make the investors believe they had premium stocks when in reality it wasn’t what was really occurring which would then lead to the

White collar crime is an organized crime committed by person of higher socioeconomic status in the course of their business, occupation, or profession (Sutherland, 2002). It was introduced to the Criminal Justice system in 1939, but was overlooked by many people because they never noticed it was happening. White collar crime has been taking place in America for a long time and is summed up as lying, cheating and stealing. There are numerous types of white collar crimes such as bribery, bank fraud, embezzlement, and insurance fraud to name a few (National Check Fraud Center, 2011). One case that we all know of, Enron, not only wiped out lifesavings, but cost investors billions of dollars. White collar crime requires intelligence and lots of

For instance, he once turned a four million dollar courthouse into a twelve million dollar courthouse through fraudulence. The Tweed Ring became exposed with the help of city patricians, The New York Times, and assorted political enemies within both parties, with varying motives. When The Tweed Ring was exposed, New York estimated William ‘The Boss’ Tweed’s services costed them somewhere between forty million dollars and one hundred million dollars. Initially, Tweed and his associates were sentenced to prison for twelve years, yet were released in 1875. Later on, William ‘The Boss’ Tweed would find himself in another jail cell, due to later charges, dead on April 12, 1878.

Lehman Brothers were an investment bank involved in transactions worth billions of dollars and one of the most powerful investment banks in the world.

A great example of fraud was when Peter and the two employees hacked the corporate system in order to transfer money to their personal accounts. Moreover, theft is executed when they stole the copier machine with the only intention to destruct it. These types of frauds have been considered misappropriation of assets since both, the money and the copier machine, were counted as a part of the company assets and they as employees of the IT company abuse of their job positions to benefit their personal needs through the omission of fraudulent

There are two parts of the credit agreement, the 8-year term loan and the penny warrants.

He appears to have put profits ahead of mine safety and health in violation of Federal mine standards. Mr. Blankenship could go to prison for 31 years. (See NBC News) CEO Stewart Parnell of Peanut Corporation of America was sentenced to 28 years in prison in connection with a 2008 salmonella outbreak that killed nine people and sickened 714 others across the U.S. Bernard Madoff is serving 150 years jail time for engaging in a multi-billion dollar Ponzi scheme that claimed many celebrity victims. Even former Fed chairman Ben Bernanke had some reservations about prosecutions for the 2008 Great Recession. Individuals were responsible for that debacle not abstract firms. He was quoted as saying, “But it would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm." (See Huffington

Madoff was promising his investors, security and strength. He told investors whatever they gave him, would simply develop and develop. Bernie Madoff was sentenced to 150 years in jail for running the greatest deceitful plan in U.S. history. Indeed, even now, just a couple of his casualties have following recovered the greater part of their misfortunes. A very much regarded lender, Madoff persuaded thousands regarding financial specialists to hand over their funds, erroneously encouraging steady benefits consequently. He was gotten in December 2008 and accused of 11 tallies of extortion, tax evasion, prevarication, and burglary.

“Chasing Madoff”, a documentary released in 2010 portrays the way the whistleblower, Harry Markopolos, uncovered Bernie Madoff’s fraud scheme and his ten-year struggle to get the SEC to investigate. The documentary begins with an introduction to Harry Markopolos and his former coworkers Frank Casey and Neil Chelo. The three men work in finance, with investment portfolios. They were aware that in the finance industry there was much talk about an investment company making their customers high returns. Casey came across some investment information from a client of Madoff and gives the information to Markopolos to look over. Markopolos claims it took him five minutes to determine Madoff’s investment enterprise was a Ponzi scheme. After obtaining

WorldCom, once known as one of the most powerful telecommunication organizations of the world, is now studied as a case of a fraudulent company that carried out unethical financial activities to cover its weakening position in the market. After some aggressive investment decisions, the company started to witness huge financial pressure. The management used various forged accounting entries to conceal its weakening position. Cynthia Cooper, Vice President Internal Audit, discovered the unethical activities and raised the issue with the management and relevant departments and received bitter responses. She carried out internal audits in her own capacity with her colleagues and compiled evidence against fraudulent activities.