Comments on: The Man Who Figured Out Madoff's Scheme

Tells 60 Minutes Many Suspected Madoff Fraud; Says SEC Is Incapable Of Finding Fraud

[John Sawyer]

While I can understand the frustrated calls for more timely media and government investigations of corporate and governmental crimes, asking why these institutions don't do what they're supposed to do, I have to point out the unsoundness of relying on even a supposedly energized media and government to root out such crimes before they can do massive harm. Many people in media, government regulatory bodies, etc. are bought, as we've seen--it's quite possible Madoff had some kind of cozy relationship with one or more people at the SEC, or people who control the SEC, of which we have yet to hear the full story--I doubt if the reason the SEC didn't find Madoff a fraud, was simply because they had incompetents pursuing Markopolos' findings. We MAY be about to enter into a new phase of better reporting on these and other kinds of crimes, and we do need to make sure outfits like the SEC do their job, but it makes no sense to sit back and count on it, and turn on the TV, check news websites, read publications, etc., and expect to see the exposes roll in simply because "they have to now". Even if some more timely exposes do start rolling in, many of these will simply be bones thrown to the public, and there will be far more that will remain hidden, as long as enough people still fall for the reassurance that the media and the government are on the job, or simply "should be". That's the same kind of unreasonable confidence that Madoff was able to generate in the people he burned. People need to get past these quaint ideas of "trust" and "confidence"--that's why they're called "con artists". Reagan had it right when he said, of the Soviets and arms deals, "Trust, but verify." We're now dealing with financial nuclear bombs, and the same advice applies. More people also need to study abnormal psychology, to help them spot con artists, etc., and more people need to grow a set of balls, so that they publicly report on these crimes when they see them.

Incredible financial, governmental, etc. crimes have been committed in the past, on which reporting started only after quite a lot of damage had been done. The level of damage a crime can cause, doesn't automatically somehow trigger greater reporting on it before that damage has occurred.

Investigative reporting into many things prior to their blowing up, has been greatly watered down in the major media. Whether by influence from people in power, or incompetence, lack of funding to reporters, a focus on the bottom line through more pop stories, etc., or a combination of all of these, the effect is the same. Don't expect that to change any time soon.

And insiders and whistleblowers can't be expected to do the whole job, since many people who would like to be whistleblowers, would suffer consequences, or don't have the guts, or don't report to the right people. Markopolos kept reporting to the SEC, and talking about his findings to insiders. I haven't yet heard about his ever taking his story to any newspaper, magazine, etc. Wrong strategy--you don't report to wolf headquarters when you see wolves going into the henhouse.

The general public needs to do much of the work--we need to investigate individually, and also form many, many independent investigative bodies, file FOIAs, do genuine detective work, etc., and report the findings widely in public, through many different channels, on an ongoing basis during the course of each investigation, instead of in one lump discovery sum, since delay in reporting risks greater chances of compromise, evidence theft, intimidation, escape, etc. If no action is still taken, we need to file lawsuits (I'm not talking about a lawsuit-happy environment--I'm talking about ones filed with reasonable care).

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[karlimhof]

be interesting to finally see who made the money - it wasn't lost, it just changed hands.
we'll probably see a big hunk of it in some israeli bank, the rest in the hands of close friends and family members.....

[elramees]

mymimi @2014, You wrote, "I have sent to governmanet officials regarding the greed and misspending of "taxpayers money" by the Native American tribe that I belong to. It seems like the government doesn't want to take responsibility."

Look, government isn't the solution, it's the problem. It engages in extraordinary rendition, it murders and tortures the innocent, it distributes drugs/guns to the vulnerable, it creates slumm communities, it spies on and harrasses its citizens and for greed, it invents a war (fear/terror), which is totally anti-Biblical instructions. It, my friend, as the beast of Daniel 7, is standing on feet of clay.

I bid you, peace!

[elramees]

Look, only four observations, Steve:
1) During the eight year ruined tyrannous Bush Administration, every self-serving agency was greedy, criminally and materialistically driven, therefore intellectually and morally failed to serve and carry out its designated duties to the US public.

2) Even the Enron/Price Waterhouse scandal, the SEC sat on its hands. These people might have never been brought to justice had it not been for an inside whistle blower.

3) The old guard of the SEC must be brought to justice, as well. Mr. Markopolos gave them the case; for six years they failed to investigate and for three years they failed to act. The majority of its employees are lawyers and lawyers can?t recognize a case, when it?s put on their desks? Appalling! This is a complete duplicate of 05 FEMA failures. What colossal ineptness!

4) Your line of questioning made you appear empathetic toward the SEC, At times; you implied this sweet Grecian had an ulterior motive for exposing this gangster, Maddoff.

The report is good, the information is priceless. Thank you.

I cannot feel any sorrow for those who lost their money with Mr. Madoff. I feel sorry for Mr. Markopolos. And my heart goes out to Mr. Markopolos.

My business partner and I tried for over seven years to get the US Attorney General?s office to file a RICO case. They did agreed to file the case for us.

Our case eventually was brought to the attention of Mr. Viet Dhin, who was a member of then US Attorney General John Ashcroft?s office.

After talking with Mr. Dhin, we were contacted by the FBI agent we had been dealing with. He asked us very pointed questions about one of the accused in our RICO case.

After that, our case died.

Seems the accused was up for a Federal appointment.

We were given every government employee excuse one could imagine. The crimes ranged from: Insurance Fraud, Mail Crimes, violation of a Federal Court Injunction and Civil Rights violations, to name a few.

So the lesson is this: You can lead the Department of Justice to crime, but you can?t make them prosecute.

Sorry for my earlier post with the mistakes, but I still get angry when I write about this.

I cannot feel any sorrow for those who lost their money with Mr. Madoff. I feel sorry for Mr. Markopolos. And my heart goes out to Mr. Markopolos.
My business partner and I tried for over seven years to get the US Attorney General?s office to files a RICO case. They agreed to file the case for us. Our case eventually was brought to the attention of Mr. Viet Dhin, who was a member of then US Attorney General John Ashcroft.
After talking with Mr. Dhin, we were contacted by the FBI agent were had been dealing with. He asked us very pointed questions about one of the accused in our RICO case.
After that, our case died.
We were given every government employee excuse one could imagine. The crimes ranged from: Insurance Fraud, Mail Crimes, violation of a Federal Court Injunction and Civil Rights violations, to name a few.
So the lesson is this: You can lead the Department of Justice to crime, but you can?t make them prosecute.

[ducky007]

Thank you 60 minutes for putting the episodes on here!!! In fact, I was watching tonight and got interrupted in the middle of the show. I was pleased to find that the episode was on here same day! CBS is great. Thank You CBS, and thank you to the advertisers for supporting CBS.

[kezarite]

I certainly hope (and think) the new Administration will revamp the SEC to preclude any further instances of Madoff-ism, though, of course, simple and grandiose greed always will be around. Also, why shouldn't Madoff investers since Harry Markopolos first blew his whistle be eleigible for a government bailout? If the overal aim is to re-invigorate investing in America, these were some of the largest investors, and they need their money back. If AIG's customers are protected, why not Madoff's?

[mymimi1956]

This story reminds me of the many, many letters that I have sent to governmanet officials regarding the greed and misspending of "taxpayers money" by the Native American tribe that I belong to. It seems like the government doesn't want to take responsibility. I feel that I'm not going to give up, just like the person in this story, and maybe SOME DAY my story might get attention. I fear retaliation and disenrollment for speaking up but this is what the greedy people in control would like. I pray that some day someone will truly audit and pay attention to what is going on!!

[wyzguy11]

This guy should be given the Congressional Medal of Honor!!......To hell with Bernie Madoff, Rick Santelli and the excessive greed on Wall St!! I've seen my retirement savings DESTROYED by traders on Wall St. "shorting" stocks and driving them into the ground because regulations such as the "uptick" rule were removed by Republican controlled Congress........Good for you Harry!

[2infinity]

Can't feel too much empathy with those folks who irresponsibly gambled and lost their money with Madoff. At least they actually got to sell their multiple houses, not have their one and only home foreclosed. As thousands of other folks of moderate income, I (and my employer) played by the rules and still lost nearly a third of my 401k investment in the last 2 quarters. These investments were for my retirement and certainly not 8 figures. And because those Wall St. masters of the universe played fast and loose causing the economy to tank, I did not get a year-end bonus or pay raise even after having the best work year performance of my career. Guess it could be worse, I still have a job. Where is the story of the average person's near financial ruin because of the criminality of the nearly unregulated market engineered by Phil Gramm?

[SeaSaltChap]

+

Try as I may, I cannot feel sorry for these people.

To me they appear all of an ilk; cunning to be the insiders,
on a scheme that one day see the true light of day..

+

[Scott_Wr]

The big question that went unasked, where were the CPAs? Generally a SEC registrant must submit audit financial statements. What CPA firm fell down on the job? Anybody hear of the recent Satyam / PricewaterhouseCoopers debacle?

The job of the SEC is to ensure proper disclosures are made to investors so that sound investment decisions can be made. They definitely missed the boat here. However, if Madoff?s funds had audited financial statements that reported everything was great, then shouldn?t the other responsible party, the CPAs, be called out too?

Despite the AIPCA?s propaganda, CPA firms are generally ineffective. It is either time the self-regulated CPA profession comes under the control of government or time the SEC starts doing its own audits and stops relying on CPA firms. The private, industry-based audit function investors rely on has not worked.

[Ron_in_Colorado]

Normally I'm not inclined to comment on the posts of others but for Daniel from Toronto I have to make an exception. If Daniel actually thought through his comment he would realize the analogy he has drawn between the investors that Madoff ripped off and a card game counldn't possibly be further off the mark unless Daniel is playing cards with someone who uses marked cards, a stacked deck, dealing from the bottom etc. Sure there are risks in the market as there are in a card game but in the legitimate market like in a legitamate card game there are rules to be followed and at least to some discernible degree the odds or risks are known. The scam Madoff pulled was as clearly criminal as if he had used a gun.

[DisappointedDemocrat]

RON, RON, RON; DON'T YOU THINK FOR ONE SECOND THAT GREEDY LITTLE HANDS DIDN'T CLAP, OR GREEDY LITTLE MOUTHS DIDN'T DROOL. THERE WERE NO BLINDERS FOR REAL. OFF SHORE BANKING, BOND FUNDS TO ISRAEL, SENDING FOLK FROM ALL CORNERS OF THE GLOBE TO ISRAEL, ARE WHAT IS GOING ON. PRAY FOR THE PEACE OF JERUSALEM, BECAUSE THE FIGHT WILL BE WHEN THEY GET OVER THERE. BERNIE WILL BE WITH THEM. JUST YOU WAIT AND SEE.

[dandmb50]

I'm very sorry for the people that were scammed. However, they invested in the market instead of investing in Govt bonds etc. Why has this not been reported in the news? It's like horse racing without the horses. They invested in the market because they figured they could make more money, maybe 20% instead of 10%. They were gambling, plain and simple. I went to a card game last week and lost $200. Should I complain? No, I was taking a chance and so were these people. They said in the story tonight on 60 minutes that Madoff made them loose everything. NOT, they made themselves lose everything by gambling in the market, there is a risk. I think he should and will go to jail for many years but people must take responsibility themselves for being greedy and want more interest, than a sure thing. Sorry but looks good on them/you. Will someone explain to me if I am wrong?

Daniel ...................... Toronto

[WBonnie]

Terrorist ; Looking at a dictionary, one that terrorizes or frightens people. Is this not what Madoff did to hundreds of thousands of people? 2974 people died in the twin towers attacks with thousands more lives affected. Although Madoff did not take the physical lives of any people, Madoff did take their lives as they knew it and changed them forever. My grand father told me " if it sounds to good to be true it probably is" The victims should have known my grandfather. Our Justice system would have a man that robbed a bank in jail.... Why not Madoff?

[tzpmtw]

I would be very interested to see a further investigative story on the SEC and if they are performing the functions required to protect us.

[Gary_W]

This kind of government incompetence is becoming very hard to swallow. Allowing the rich to manipulate our checks and balances by the incompetence of government workers is too much.
What will the Obama Administration plans to stop this craziness?

I feel terrible for all the victims of Bernie Madoff, and I feel angry that our government continues to allow this man to enjoy the comfort of living in his multi-million dollar condo as his victims are forced to move out of theirs.

The SEC should be completely revamped, and those that were directly involved with the SEC for the last 10 years should be fired and forced to suffer along Madoff and people like him for their negligence .

[susiemjordan]

Harry Markopolos should be working for the SEC. We need people who know what they're doing when it comes to tracking down fraud and deception among Wall Street's financial giants. It's no wonder our economy is in such a mess......people at the SEC don't know what they're doing.

[xmen1030]

Great get but this is just a drop in an ocean that is flooding the world. Why isn't ANY news organization asking the Obama administration when and if they will reverse the 2000 Commodity Futures Modernization Act. What happen to the regulation promised us during the campaign? Judging by Obama last address to congress It seems they are just going to take baby steps without ending the madness caused by credit derivatives and other shaky speculation based investing that amounts to nothing more than price fixing and bucket shop swindling. The world is choking on this and will continue to until laws are passed to end this type of dirty dealing on Wall St. I'm more concerned over what passes as legal on the street than these schemes. Enough is enough. Where is the outrage?