Keep in mind, Madoff was running simultaneous scams:
(1) a tax evasion scheme for wealthy businessmen ("losing" money is a tax write-off;
(2) a money laundering scam;
(3) a protection racket for affinity groups,
(4) aiding and abetting wealthy tax-exempt foundations to evade US banking laws and the IRS.
(5) hiding money for wealthy businessmen some of which was used for campaign donations (FEC fraud), and foundation fraud (IRS fraud)
THE MADOFF MO The trustee ID'ing his assets found Madoff used the time-tested Wall Street MO----creating a super-secret labyrinth of interrelated international funds, institutions and financial entities of almost unparalleled complexity and breadth......with assets and businesses in multiple places overseas that hid thievery, money laundering and tax evasion.
Keep in mind Bernie‘s investors were savvy, astute successful business people, accustomed to constructing, picking apart and analyzing financial statements. One investor who spoke to reporters was a stockbroker (her family invested with Bernie for generations---the family's patriarch founded the wildly successful Stop and Shop supermarket chain). Other inevstors gave Madoff $100-500 millions to "invest" for years and years.
WILPON ABIDED BY THE CONDONATION LEGAL PRINCIPLE The compelling legal principle of “condonation” is operating here---implied forgiveness for certain behavior. Meaning investors implicitly “condoned” Madoff’s actions over a period of time--sometimes decades.
His investors willingly acquiesced to Madoff's activities in several ways:
(1) Sending Madoff enormous sums of money, sums that were spread out over time (some families invested for generations), even AFTER they had the opportunity to assess their investments;
(2) Referring other investors to Madoff (if the investment was so bad, why did they bring in other investors?);
(3) Taking profits out of the investment, rolling it over, or putting more money in;
(4) Writing PERSONAL checks to Madoff's subrosa spinoff vehicle that was not listed on the Securities Exchange (tax evasion modus);
(5) Accepting, without question, Madoff’s obviously flawed monthly statements.
YEAH SURE---I BELIEVE THIS (/SNIX) The SEC did not have “the slightest clue” about Madoff's financial fraud. Until Madoff confessed.
>>>The Wilpons have been trying to replace roughly $750 million they lost by investing with convicted Ponzi schemer Bernie Madoff, a source said.
In addition, they are now in settlement talks with Irving Picard, the trustee for the Madoff estate, who claims Sterling is a “net winner” that withdrew $48 million more from two Madoff funds than it invested.<<<
So did the lose $750 million with Maddoff or make $48 million in profits? So much of the reporting on the Maddoff scandal has been sloppy and unclear from the beginning.
Did they really LOSE $750 million or was did they have $750 million in phony profits wiped out when the ponzi scheme collapsed?
I think Picower was “drowned.” You play with crooks and you get burned.