Adonis Diaries

Ponzi, Madoff or the pyramid chains?

Posted on: August 5, 2009

Ponzi, Madoff or the pyramid chains? (August 5, 2009)

 

            Ponzi, Carlo or Charles later, was born in Parma, Italy in 1882.  He imigrated to the USA in1903. He served two years prison out of 3-year term in Montreal for checks falsification.  Ten days after his release, the USA emprisoned him for two years for trying to sneak in clandestine Italian workers.  In 1907 Europe issued the International Union post stamps for one cent, kind of a universal coupon-response post stamps that could be exchanged for 6 cents in the US.  In 1919, Ponzi figured that he can generate five folds profit in the exchange of the coupon and registered the Security Exchange Company. 

            Ponzi promised 50% on investment in his company, which was feasible if the exchange was legal.  The exchange turned out to be illigal and Ponzi started paying off the interest out of new fresh money coming in as investment.  Clarence Barron discovered that there were only 27,000 coupons circulating in the USA and Ponzi needed 160 millions coupons to generate the kind of disbursment he was paying.  Guess what? It took only 8 months to discover the fraud after Ponzi amassed 20 millions of the 1920’s dollars.  Ponzi died in misery in Brazil in 1949.

 

            Anyone believes that a single person can start a pyramid scheme? Only old money and well intrenched mafia with connections and political clout to bribe policemen and justices can pull off these huge frauds.  One chain is caught ten take the relay.  The greedy suckers keep the coffers of old money plenty. It is a chain pyramid within a chain for easy money generation.

 

            Bernard Madoff did the same fraudulent scheme on a wider scale for at least 40 years! He confessed so that the most influential figures avoid indictedment if the prosecution went ahead. Actually, there were no serious competitions to Madoff scheme because he was covered to siphon in billions of dollars into the pockets and companies of influential traditional political and financial families. 

            Guess what? The Security Investor Protection Corporation is reimbursing up to $500,000 to those who transacted directly with Madoff. The government is paying bonuses to the billionaires for consciously participating in this mass fraud after they reaped billions in profit from the late unfortunate investors.  Those who invested indirectly in Madoff through mostly fraud banks that offered high interest rates on short-term deposits or feeder funds like Banco Santander, Bank Medici, Fortis, HSBC, UBP, Natixis, and RBS will not re-imbursed. It is those middle class sucker investors, so far more than 16,000 complaints, who lost every saving they had.

 

            Bernard Madoff was born in Queens and worked in Long Island as swim guard. He started his scheme on ethnic groups and then extended globally. He had two companies; a legitimate company Bernard L. Madoff Investment Security and a fraud company for portfolio investments.  Madoff promised 15% of return and even much higher for preferred clients; statements were either faxed or mailed by post to prevent any modern computer sofisticated investigation. The money were transfered through Fairfield Greewich Advisors, Tremont Group Holdings, Ascot Partners, and Access International Advisors. I hope you have no longer faith in Advisors and Partners anymore.  Madoff would claim that he generated profit by split-strike conversion of the hedge fund but he confessed in court that he did not invest a dime. If you still believe what Madoff is confessing then keep your faith a secret.

 

            Harry Markopolos tried to emulated the techniques described by Madoff for his hedge fund but he was unable to get near the returns that Madoff paid off on investment. Markopolis warned the SEC in three report from 1999 to 2005 that Madoff hedge fund is a fraud but the SEC claimed not to find any wrong doing!

 

They claim that Madoff built his fraudulent empire by word of mouth: bullshit.

They claim that Madoff pulled it off by sticking to the dictum “Don’t ask, don’t tell. Madoff is secretive; he even asks investors to keep mum”; bullshit.

They claim that Madoff made it big by joining caritative associations and organization; bullshit.

            The behind the scene string manipulators selected Madoff for key financial postions as a cover of respectability, credibility, inside stock trade knowledge or front running to attrack more greedy investors.  Madoff was nominated head of the NASDAQ from 1990 to 1993; he was heading the technology value stocks, the security industrial association, and the lobby of stock trade interest group.

 

            Many of the investors would state: “We thought he was God”; You give more to the good causes thanks to Madoff the Savior”; “We trusted that our money was secure with Madoff”; “He convinced us that we were a few of the select people”.

 

            Madoff manipulated over 60 billions dollars and many got rich just on commisions. Bank directors would receive $450 millions in commission for depositing 3 billions in Madoff’s hedge fund.

            Madoff got a sentence of 150 years but if the citizens do not presure the Justice to resume prosecuting all the prominent influential people behind the Madoff case then the US justice is no longer credible. They should receive 200 years sentences and their remains burried in the prison premises.

 

Most probably the old money families generated another fortune as first comers in the pyramid chain and the money is deposited in fiscal paradise islands.

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adonis49

adonis49

adonis49

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