Lessons Learned from Madoff

In March, 2009, Bernie Madoff pleaded guilty to 11 federal crimes.  He admitted that he had been operating a massive Ponzi scheme since the early 1990’s.  The scheme was estimated to defraud investors of somewhere between $18 and $45 billion dollars.  The investment operation that Bernie was overseeing may never have been legitimate.

 There are certain lessons that can be learned about the Madoff case.  These include:

 • Returns that seemed too good to be true
• Lack of transparency
• Know the CPA firm doing the audit
• Exclusive nature of the club
• Promise of market beating returns
• Eggs and tennis balls
• Trust but verify

In future blogs I will explain each of the lessons learned from the organization relates to fraud and what action can be taken to prevent the fraud from occurring.

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