I do not believe these so-called "investors" sob stories for a nanosecond. Impossible to believe astute businessman who made fortunes in competitive businesses would allow themselves to be scammed.....unless.....these privileged elites were in collusion with Madoff to engage in a massive tax evasion scheme. Tax evasion would explain why savvy, astute businessmen were giving this guy huge sums ---$100-500 million--- to “invest.” Keep in mind, at the end Madoff was left with some $300 million out of $50 billion. That much money does not just evaporate.
Apparently Madoff kept a cut of the “investment” and wire-transferred the bulk offshore to friendly money laundering havens-----out of sight of the IRS, SEC, and US banking laws. The whole scam crashed b/c Madoff probably wanted a bigger cut but the "investors" refused.
NOTE: They keep saying they are "wiped out." However, savvy investors DO NOT put all their eggs in one basket as these people did. This whole deal smells to high heaven. People stupid enough to give Madoff $100-500 million to evade taxes are also criminals.
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TAX-EXEMPT FRAUD Madoff was handling millions in tax-exempt funds for so-called "charities." The IRS says the biggest potential for IRS fraud are these tax-exempt non-profit charities doing deals with other tax-exempt non-profits----all posing as do-gooder "foundations" and “charities.” For instance, the charity owners go on luxury trips "for charity" which are charged to the tax-exempt. A huge part of the fraud is tax evasion-----one non-profit "donating" to another non-profit "charity." This is nothing more than money laundering.....the charity takes a cut then converts the bulk of the donation to an offshore account for the donor's use later---out of sight of the IRS, SEC, and US banking laws.
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Most of his investors figured Madoff was doing something illegal---frontrunning---that's why they were getting big returns (16% even in down markets). Bernie was palling around with SEC types---Bernie bragged his niece married a SEC regulator----his "investors" figured they had an "in" and Bernie could get even more money for them without the SEC horning in. In effect, they were all aiding and abetting this fraud. These "smart, rich" types were never bothered about Madoff's sub rosa activities. Gotta love it that the "smartest and richest" people lost bigtime.
These people are decidedly NOT victims.
So, I don't see why the US government aka tax payers are on the hook to any of these tax evaders.
If you lend a crook your car to use as a get away car for a bank robbery and he tells you you will get a percentage of the robbery, Are you a victim if the crook also steals your car?
The source of the problem.
2. Did he 'invest' any of the money, or merely deposit checks and write dividend checks to old clients?
3. If he employed many people, what did they do? If they weren't actually investing did they knowingly keep false books and and prepare false account information?
4. What kind of account status report did the 'clients' receive? Did it show actual options trades and arbitrage accounts???? Or did they just receive a check in the mail every quarter?
5. What did he do with all the money he skimmed off the top? He has NO assets left? Off shore accounts??
“These people are decidedly NOT victims.....”
IMHO, they are scamming Obama...they “disappeared” their cash before his administration could get their hooks in it...
But they will be playing the 'victim' role to the hilt.