News
Madoff and his Models
January 01, 2013
"In financial history, Ponzi schemes—the fraudulent enterprise of paying off old investors with money collected from new ones—are the most peculiar of crimes. Before they are detected, they seem exquisitely pleasing to perpetrators and victims alike. The fraud appears to be a bountiful gift that the confidence trickster, a generous soul and a financial wizard to boot, has bestowed upon a grateful world. Investors frequently revere the schemer, endowing him with magical properties. The schemer, in turn, may come to believe that his scheme isn’t altogether shady and that he will someday generate the sensational returns advertised. For the duration of a Ponzi scheme, it may seem like a victimless crime. Not surprisingly, when the impostor is exposed, the victims experience profound hurt and disillusionment, having trusted implicitly in the schemer against a chorus of naysayers."
Read the whole story at The New Yorker