There are a zillion ways Madoff and his investors could have pulled off massive tax fraud.....using "tax-exempt do-goodism" as a cover. ONE SCENARIO The money is passed to tax-exempt non-profit entities, Madoff and the entity take a cut, then wire transfer the bulk to numbered bank accounts offshore for the "investor" at a later date. Madoff might also have distributed falsified "loss" statements to investors to defraud the IRS.
REFERENCE
MY EMPHASIS----- New York "charities" scrambled to cut ties with longtime trustee Bernard Madoff, and one nonprofit group that "invested" with him was forced to shut down.
The Robert I. Lappin Charitable Foundation, which promoted Jewish education, fired its staff and closed yesterday, "effective immediately." "The money [is] gone," said foundation trustee Robert Lapin, who added that the charity's money had all been invested with Madoff's firm.
Madoff was deep into do-goodism. News reports srecounted that he raised millions for Jewish groups. On Friday, as the scam unfolded, he resigned as chairman of Yeshiva University's Sy Syms School of Business and as it's board treasurer (HOPE THEY CHECKED THEIR BOOKS). Yeshiva's board scrubbed all mention of Madoff from its Web site.
At Hofstra University, a stunned board held an emergency meeting and voted unanimously to put Madoff "on leave."
Madoff also sits on the boards of (a) North Shore-Long Island Jewish Graduate School of Molecular Medicine, (b) the Picower Institute for Medical Research and (c) New York City Center, a theater organization.
With his wife, Ruth, Madoff also runs a "self-funded non-profit, with about $19 million in assets," according to the latest IRS filings. The couple has given millions to Jewish charities, the Dalton School, the Metropolitan Opera, Queens College, Lincoln Center Theater, the Robin Hood Foundation, and groups for underprivileged kids.
SOURCE http://www.nypost.com/seven/12132008/news/regionalnews/charity_trustees_a_bustee_143968.htm
FReeper Dave has posted extensively about tax-exempt non-profit fraud.
Greed.