Chances are pretty good that one of the biggest financial crimes in modern history will essentially go unpunished. I mean, c’mon, minimum security white collar prison? Hammering out license plates, watching television and taking stoles through the yard doesn’t sound like punishment to me. And honestly, does anyone really think he still has the money to pay back to his investors? Paying back the money will be virtually impossible. Once it’s spent, it’s spent, right? So here are some ideas for REALLY punishing Madoff:
- Mow the yards of the investors who lost money with an old, dull, reel mower in the blazing sun – in Florida – in 105 degree heat with 99 percent humidity.
- If the heat is too much for an old man, let him go underground and clean out investor’s septic tanks – with a spoon.
- He could always work in Tennessee on the road kill (skunks, possums, and armadillos) cleanup team. Let him bring the same spoon from cleaning out those septic tanks.
- How about making him work as a roofer, installing shingles on big residential homes — in Arizona — using that spoon.
- I hear there are some openings for killer bee exterminators in Texas.
- On yeah, we don’t want him getting too hot. How about coal mining in West Virginia — with a spoon?
- Make him work as a busboy in a popular New York restaurant so all his friends can see him.
- He could always work in New York as a hot dog vendor. On or near Wall Street … that might give hot dog vendors a bad name though.
- Maybe the best would be to work as a mushroom farmer. Farmers feed the mushrooms a lot of manure and keep them in the dark – just like he treated his investors.
Seriously though, despite the fun ideas, there were a lot of real people who lost a lot of real money to a real crook. Now they’re dealing with the stress of seeing the guy plead his case down to a country club prison sentence. What worries me about just sending him off to any prison is that he could either purposely or inadvertently educate a lot of other criminals about how to set up scams.
Remember: the number one way to recognize a scam is that it is usually too good to be true. If you “can’t believe your luck,” or if you “found a once in a lifetime opportunity,” or if someone contacted you with “an unbelievable ground floor deal,” run. Run far away and hide your wallet and remember that once in a lifetime deals usually come along every two weeks.
Scams today take on so many different faces. You can get scammed by fake brands on the street, scammed by “pump and dump” stock cons, or scammed by fake stock brokers. Wait a minute, you say, how does THAT work? Like this:
You get a phone call one day from a guy identifying himself as a stock broker for a firm that you’ve never heard of but with a fancy sounding name. He doesn’t try to sell you anything, but instead, extols the virtues of a particular investment (a stock, a mutual fund, or an ETF) and tells you to just “watch it”. He predicts it will go up, up, up … and it does! A week later he calls you and says, “Hey, don’t invest with me just yet, let me ‘prove’ to you how good I am.” He then tells you about an investment that will go down, down, down … and IT does. Wow, this guy is good! You’ve already missed two boats and you’re not going to miss another, so you wire him $15,000 only to never hear from the guy again.
Let’s just assume he called 300 people and predicted to half of them that Investment A would go up and the other half that it would go down. He’s then a genius in the minds of 150 people. Two weeks later, whichever group he made the right call gets the second phone call about Investment B. Now, he’s a genius in the minds of 75 people. If he can get a 10 percent response, he makes out like the bandit he is and he simply steals the money. There never was a real brokerage firm and the account you wired the money to was probably located offshore in the Cayman Islands.
Why did this happen?
It happened because those investors actually believed that something “too good to be true” was about to happen to them. They failed to check out anything about the “investment firm” that was really just a front used to scam them out of money. Their desire to beat the market, to use “secret” knowledge, or to be associated with the next Warren Buffet clouded their common sense.
Check out everything. Assume nothing. Scams just like this one are pulled off every single day and a huge percentage never get reported because the investors know they should have known better. They would rather swallow a $15,000 loss rather than face the ridicule. But, if someone had just reported it, perhaps fewer people would have become victims.