Madoff Ponzi Scheme Investigation
Lead Investigator- Jeff Atkins
Employer- Federal Bureau of Investigation
Introduction
Since the introduction of money, fraudsters have been developing different techniques in an attempt to fool people of their assets. The fraud techniques continue to evolve as technology advances. Bernie Madoff is the man behind this Ponzi scheme and succeeded in operating the fraud scheme 15 years unnoticed in the world’s most controlled and monitored financial system. Later in 2009, Madoff was arrested for Ponzi scheme and was proved guilty of defrauding $65 billion of new investors’ funds (Rounds Charles 1). Many people were shocked of how such a huge fraud could be undertaken in a finance environment monitored by regulations and laws supervised by various financial entities. The unravelling of Madoff Ponzi fraud raised concerns from investors on how such a fraud scheme could go undetected for 15 years, and the right measures to employ in order to prevent such instances in the future. The aim of this report is to provide an overview of how the Madoff Ponzi scheme was undertaken as well as giving a detailed investigative plan of how I would approach this investigation if I was the lead investigator.
Executive Summary
Investment Securities LLC was founded in 1960 by Madoff. Initially, the company was small and dealt with penny stock trading. The company later grew at a faster rate due the increased use of sophisticated and computer technology. New investors were able to put their money in a hedge fund through the advisory and investment management division. This hedge fund existed over the years and continued to provide a constant rate of return of above 10 percent to investors. Given a longer period of time, this offered the highest rate of return on investment. The Securities and Exchange Commission (SEC) claimed that regulators failed many times to unravel the red flags that indicated that a Ponzi scheme was underway in the company…Continue Reading….