Today’s Illustration: The Greatest Financial Fraud In History!

Who: Bernie Madoff — Bernard Lawrence Madoff — Bernie Madoff was born on April 29, 1938.  His wife was Ruth Madoff.

What: Greatest Ponzi Scheme In History!

Madoff piloted the biggest financial fraud in history!  The most notorious Ponzi scheme in history.  It not only pulled in a variety of rich and important people, but it also touched various Christian ministries.  Jim Campbell’s new book is titled “Madoff Talks.” [Jim Campbell — the audio interview]

“The Bernie Madoff story was, and remains, one of the biggest tales of grandiosity and greed that Wall Street has ever known, and certainly the largest Ponzi scheme in history. . . . .[Jim Campbell investigated] the systemic breakdown of the SEC, big banks, and every watchdog that had the obligation and opportunity to stop the fraud before more people got hurt. But failed.” [1]

A Ponzi Scheme:

[It] is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity (e.g. product sales and/or successful investments), and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.”

When: From 1991-2008, the Ponzi scheme developed and progressed.

Death: Bernie Madoff died this week — April 2021 — age 82 of natural causes.

His brother, Mark Madoff, committed suicide in 2010. [2]
In September 2014, his son, Andrew, died of cancer.

Quotes From Two Articles: (Take time to read the two articles for more ideas!  Yes, speaking takes work!)

  • “It boasted impressive returns in good times and bad. No one understood how he did it, but everyone wanted in.”
  • “And Madoff was very rich with a yacht and fancy houses in Palm Beach, France and the Hamptons. It only added to his credibility.”
  • “Then came the 2008 financial crisis, when too many people wanted their money at once.”
  • “I put all my savings in stupidly and because I trusted him so much.”
  • “My conclusion is that he just could not admit failure.”
  • “In an interview from prison with New York Magazine, Madoff said he always hoped he could somehow recoup the losses that were piling up.”
  • “BERNIE MADOFF: You know, I was sort of telling myself, you know, that some – you know, some miracle was going to happen or that I was going to be able to work my way out of it, OK? I just didn’t know – I just didn’t know what that – what that was.”

    “Bernie Madoff, Whose Ponzi Scheme Bilked Thousands, Dies In Prison” — https://www.npr.org/2021/04/14/987165621/bernie-madoff-whose-ponzi-scheme-bilked-thousands-dies-in-prison

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  • “As the years went by, I realized that my arrest and this day would inevitably come”
  • “I can’t tell you how many hours I’ve spent with the psychiatrist, to try to make some sort of peace with myself, to understand how I did it,” he said, according to Politico. “I’d like to believe that there was something mentally wrong with me. It would make me feel better.”
    . . . . . . 
    https://www.bloomberg.com/news/articles/2021-04-14/bernard-madoff-mastermind-of-giant-ponzi-scheme-dies-at-82

♦♦♦♦♦♦♦♦♦♦♦

Key Biblical Concepts:

  • trust
  • faith
  • confidence / false confidence
  • hope
  • bankrupt
  • money / love of money
  • greed
  • loss / gain the whole world
  • temptations
  • guilt
  • too good to be true

For further help on using an illustration, go back to the post — Three ways to use an illustration and the fourth way — I’m Joseph



1. https://prisonist.org/white-collar-week-with-jeff-grant-podcast-ep-06-madoff-talks-with-guest-jim-campbell/

2. https://www.nbcnews.com/id/wbna40617952

Some Links:

Mad About Madoff

https://en.wikipedia.org/wiki/Bernie_Madoff

Investors List: https://en.wikipedia.org/wiki/List_of_investors_in_Bernard_L._Madoff_Investment_Securities

https://www.npr.org/2021/04/14/987165621/bernie-madoff-whose-ponzi-scheme-bilked-thousands-dies-in-prison

Some of the signs of a Ponzi Scheme:

 Note: Jim Campbell — There was not a single person in the financial world surrounding him who realized that he was running a Ponzi scheme — “There were 250 people on the 17th floor, not a single person in the entire business who knew he was running a Ponzi scheme.”

According to the U.S. Securities and Exchange Commission (SEC), many Ponzi schemes share similar characteristics that should be “red flags” for investors.[10] The warning signs include:[10]

      • High investment returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Any “guaranteed” investment opportunity is often considered suspicious.
      • Overly consistent returns. Investment values tend to go up and down over time, especially those offering potentially high returns. An investment that continues to generate regular positive returns regardless of overall market conditions is considered suspicious.
      • Unregistered investments. Ponzi schemes typically involve investments that have not been registered with the SEC or with state regulators. Registration is important because it provides investors with access to key information about the company’s management, products, services, and finances.
      • Unlicensed sellers. Federal and state securities laws require that investment professionals and their firms be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms, the few exceptions usually being the aforementioned investment vehicles that started out as legitimate operations but failed to earn the expected returns.
      • Secretive or complex strategies. Investments that cannot be understood or do not give complete information.
      • Issues with paperwork. Excuses are given regarding why clients cannot review information in writing about an investment. Also, account statement errors and inconsistencies are frequently signs that funds are not being invested as promised.
      • Difficulty receiving payments. Clients have failures to receive a payment or have difficulty cashing out their investments. Ponzi scheme promoters routinely encourage participants to “rollover” investments and sometimes promise even higher returns on the amount rolled over.
    • See the “New Era” Financial Scheme/ John Bennet:

      • Among the biggest losers who participated with New Era, according to bankruptcy documents, are Lancaster Bible College in Lancaster
      • But the chief financial officer and board of the Prison Fellowship Ministries were suspicious, according to Paul Edwards, senior vice president for development for the group, which ministers to prisoners, ex-prisoners and their families. . . . . Our board of directors said, ‘You can’t get something for nothing. This is too good to be true,'” Edwards said. “We were also worried about these anonymous donors. Bennett wouldn’t tell us who they were. What if they were Colombian drug lords?” . . . . So Colson’s board turned Bennett down flat. Bennett, surprised, came back with a counter-offer. Prison Fellowship could set up their own escrow account, so they’d be in control of the money, and New Era would still match it.
      • The Coalition for Christian Colleges and Universities, an association of 90 Christian schools, was one of the groups that took a chance with Bennett. The association itself put $250,000 into New Era, while 14 of its member institutions contributed between $20 million and $30 million, according to an estimate by Bob Andringa, president of the coalition.”
      • “Wheaton College, The Biblical Theological Seminary, CB International, Covenant College, John Brown University, and International Missions, to name just a few.
      • https://ministrywatch.com/25-years-ago-john-bennett-and-the-foundation-for-new-era-philanthropy/

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