Victims or Accomplices In Madoff Scheme?

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Victims or Accomplices In Madoff Scheme?
By Ray Hanania
Southwest News-Herald Newspaper Friday Dec. 14, 2012
Four years ago this month, Bernard L. Madoff, the king of Wall Street, told his two sons that he had been running a “ponzi” scheme totaling more than $50 billion.
Madoff managed “Hedge funds” but instead of investing money, took money from new clients to pay profits to old clients.Thousands of people are Madoff “victims.” He was convicted the following year and sentenced to 150 years imprisonment serving at the Butner Medium Correctional facility in North Carolina.

But what about his “victims?” Are they really victims?

Not everyone could invest their money with Madoff. You had to have clout. People were invited in with the promise of steady profits, and no losses.

It was too good to be true but the inner greed in people with big money is never ending. Nearly everyone lost their money when Madoff’s scheme came to an abrupt end on Dec. 10, 2008.

But, all of his victims were receiving the profits of the scheme. Each investor was receiving millions in what we now know were false interest and investment profits.

Madoff would fake up investment statements and the people were so happy to get their money no one bothered to question how one person could earn on stock investments even when the stock market had collapsed, dropped and was quaked with uncertainty.

They didn’t want to know. Most were not just average people. They included his relatives, friends of his relatives, and business partners and investors.

They would “invest” their hundreds of millions in Madoff and Madoff would secretly take those investments and issue them as payouts or redemptions to his investors.

They all got money. What they lost was the nest egg they invested. But they all received cash payments every month for the entire time they were invested. Many were huge cash payments that they used to live on while the ponzi scheme continued. Many were just reinvested.

Greed was the common denominator. It’s hard to feel sorry for someone driven by greed.

There is one group of victims, though. Those were the people whose money was invested in other firms, and did not directly know their money was invested with Madoff. The brokerage companies and fund managers simply took their money and then they invested it with Madoff.

They lost their money, too.

The Wall Street fund managers, though, made lucrative profits. Hundreds of millions every month were paid out to all kinds of fund managers.

Amazingly, through all of this, the Security and Exchange Commission (SEC) did absolutely nothing. They did nothing when an obnoxious and hard-to-like whistle-blower named Harry Markopolos complained not once but twice that Madoff’s investments were fake. He spent eight years and failed to convince anyone of the truth.

The SEC did nothing because when SEC officials leave and go into private practice, they were almost all hired by Madoff. No one wanted to risk closing the door on their own possible gain, or, greed.

Madoff is all about greed and how greedy people can close their eyes to commonsense in the hopes of making easy profits, even when investing their hard-earned savings.

There are no real heroes in this saga. And for those who lost everything, well, they sure had their fun, like gamblers in Las Vegas enjoying the high life until it all caught up.

(Ray Hanania is an award winning columnist. Reach him at  — City & Suburban News-Herald

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Ray Hanania

Ray Hanania

RAY HANANIA — Columnist

Ray Hanania is an award winning political columnist and author. He covered Chicago Politics and Chicago City Hall from 1976 through 1992. Hanania began writing in 1975 when he published The Middle Eastern Voice newspaper in Chicago (1975-1977). He later published “The National Arab American Times” newspaper which was distributed through 12,500 Middle East food stores in 48 American States (2004-2007).

Hanania writes weekly columns on Middle East and American Arab issues for the Arab News in Saudi Arabia at, and at, and at

Palestinian, American Arab and Christian, Hanania’s parents originate from Jerusalem and Bethlehem.

Hanania is the recipient of four (4) Chicago Headline Club “Peter Lisagor Awards” for Column writing. In November 2006, he was named “Best Ethnic American Columnist” by the New American Media;In 2009, he received the prestigious Sigma Delta Chi Award for Writing from the Society of Professional Journalists. He is the recipient of the MT Mehdi Courage in Journalism Award. Hanania has also received two (2) Chicago Stick-o-Type awards from the Chicago Newspaper Guild, and in 1990 was nominated by the Chicago Sun-Times for a Pulitzer Prize for his four-part series on the Palestinian Intifada.

His wife and son are Jewish and he performs standup comedy lampooning Arab-Jewish relations, advocating for peace based on non-violence, mutual recognition and Two-States.

His Facebook Page is

Email him at:

Visit this link to read Ray's column archive at the ArabNews,com
Ray Hanania