Friday, March 13, 2009

Madoff realities

The case of Bernard Madoff is frightening. The government regulatory agencies saw virtually nothing - even when irregularities were reported to them. The Treasury collected taxes on paper profits that were wholly imaginary. What are the true losses?

Direct losses are variously estimated. It may be that US$17 billion was actually under management, but losses up to US$65 billion are claimed (reinvested imaginary "profits"). Only US$1 billion has been recovered.

Trust has certainly taken a beating. Many charities have lost their capital, and the highly-exposed element of society that should benefit from such monies gets nothing. Some people will die sooner due to loss of such resources thanks to Madoff & Co.

Recent reports talk of "his wife's" Manhattan apartment. But if these are the fruits of crime, essentially stolen goods, wouldn't they need to be relinquished? What of the other Madoffs working in the web of companies - if one part of the network is a criminal enterprise, should the proceeds of other segments be legitimate?