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Hi I'm Bernie Madoff.. Tell me what you think!

I'm Bernard Madoff and I've admitted to operating the biggest Ponzi Scheme in history.

Of course, I couldn't have succeeded without help from others that were involved, and of course, I certainly couldn't have succeeded unless those that gave me money were driven by greed.

I didn't put a gun to their heads. In fact, I turned back many people that wanted to invest with me ! (although, those were the people that asked too many questions and were potentially too suspicious of my answers.)

Can you imagine that all of the money managers and all of the individuals that lost billions and billions trusted me so implicitly?

Not a single one hired an expert or an independent due diligence firm to determine if it was even plausible to make the types of consistent returns trading options and stocks that I delivered to my customers. And, most of the fund managers were paid kickbacks from us for placing their client money under our care. Of course, those fund managers also earned fees from their investors for picking me to manage their way out of their money.

After all, not even my 10 year old grandchild could believe that I would be able to deliver what was effectively a 10% fixed rate of return year after year, notwithstanding the massive volatility in the financial markets.

Every month my investors, and those that thought they had deposited money into segregated brokerage accounts received between .15% and 1.0%...and i showed them every trade that I executed on their behalf via monthly brokerage statements that I mailed to each one.

Obviously, if any single investor had actually reviewed the trading activity statements, they would have found that the prices of stocks and options that I told them I traded matched the end of day prices published in the newspaper. But, if they had checked the actual day's volume of those stocks and options, and looked at the total capital invested with me (over $12 billion), they would have noticed that the volumes couldn't have possibly matched.

For example, I reported to one customer with $10 million in capital that I purchased 1000 put options in IBM for his account. For the customer with $100 million, I told him I purchased 10000 option contracts, and for the customer with $1billion, I told them I purchased 100,000 option contracts. All of them were reported at exactly the same price.

If they looked on line at any financial data website, and researched the number of put options that actually traded that day, it should have displayed at least 100,000 contracts. But it didn't, because the exchange-reported volume was a fraction of 100,000 contracts. Proving that the account statements were completely bogus.

And, I would never email an account statement, or provide online account access, just the nice paper documents. That would have involved too many people and a digital trail with computers and hard drives. It was just me, along with a few others that would help print up monthly statements in the maids quarters of my apartment on the Upper East Side. We also had a copy machine on my yacht, and another one at my home in South Hampton, NY. By the way, its beautiful in the Hamptons! Bet you want to know who in my family might have been involved!!

Keep reading!!

The best part is, all of those properties are in my wife's name, or in the name of a trust. So the federal government will take years to seize those properties, and while I'm out on $10 million bond (secured by the NYC apartment), I'll be able to travel to my house in the Hamptons and chill out, or relax on the Upper East Side in my coop. Sure, many of many investors will have already lost their multi-million dollar properties, and some will have to move to a studio apartment in Queens to live the remainder of their lives on Social Security. Isn't Social Security great!!!

And, by the time the SEC or even the Feds decide to seize those properties (and auction them off, where the proceeds will go to the government, not to victims), my lawyers at Paul Weiss Rifkin will have already quietly sold them off on my behalf, and the $50 million or so that we'll get will be divided amongst my wife, and my wonderful children and grand children.

That $50 million will easily cover their college educations, provide homes for everyone, and they'll all be able to shop in Palm Beach and Boca Raton. Maybe one of my kids will even pick up that nice condo in Boca from the estate of one of my greedy investors that had a stroke and dropped dead when he found out that I stole his, and his entire family's life savings.

I won't be going to jail for at least another three, maybe four years. So, in the mean time, I'll be posting here and telling you how everything is, and maybe even provide some restaurant reviews. Right around the corner from us is a great Italian place. And now that I'm not going into the office every day, I'll be finding great places for lunch on the Upper East Side that I'll be telling you about on this blog.

I'll also be telling you about who else helped me, the names of the many "introducers" that I enlisted to capture client money, and for those that want to subscribe for the low price of $100 per year, I'll send you a weekly update containing all of the court filings in the case. There's going to be thousands of documents, so $100 is an unbelievable conservative and realistic price.

Oh, for those that are asking; I didn't start out in Wall Street operating Ponzi schemes. Me, and my family members have long-operated a market-making firm in stocks. Did you know that I was the former Chairman of the NASDAQ? That was a great job. With that on my resume, I never had to worry about the SEC or any regulator questioning my firm. If they stopped by, we had a glass of shnapps and shot the breeze. Never even opened a file cabinet!

Anyway, customers, and other institutions would call us up to buy and sell stock in hundreds of different securities. We made our first fortune by "front-running" those orders. That means we would go ahead and purchase for our own account, then turn around and sell it to the customer at a higher price. And for inhouse brokerage customers, we even charged them a commission, on top of the trade! Nobody new! It was beautiful!

In the mean time, if you'd like to send me a card, or perhaps a free sample of a product, here's where I live:

Full post as published by Bernard Madoff on December 15, 2008 (boomark / email).