30 June 2009

150 Years Prison Sentence for Bernard Madoff

Yesterday the disgraced US ex-financier Bernard Madoff (right) has been sentenced to 150 years in prison for fraud. It was the maximum sentence the Judge could impose on the man who has been exposed as the - so far - biggest crook in world history.

There were cheers and applause in the courtroom when the Judge passed sentence, as many of Madoff's victims and former clients were present to follow the trial.
Among those former clients are many Hollywood stars, well-known international financiers and investors, some of the world's most famous banks and plenty of Jewish charities, some of which were forced to close after Madoff's fraudulent 'Ponzi scheme' unravelled.

They all fell for Madoff's charm and chose to believe in the impossible. He promised investors a regular steady return each year, regardless what the markets were doing or how the economy was developing. Anyone with even basic knowledge of mathematics will know that such is not possible. Investments are always subject to fluctuation, because the global markets are quite volatile and hard to predict. Thus there will be great gains in one year, lesser gains in other years, and often enough also losses.
This never happened to Madoff investors. They just received their annual pay-outs as steady and regular as the No. 3 bus, no matter what was going on. And no-one seemed alarmed, or wondered how he could do it. There was no other bank or investment fund that could offer such returns, and some of them began to wonder what was going on inside the Madoff organisation. (These doubts and various complaints, long ignored by the regulatory authorities, led eventually to Madoff's unmasking and downfall.)

Madoff told the court in March that of the billions of dollars which passed through his hands during his three-decade-long scam he never invested one cent in the market. Instead he stashed the funds in a Chase Manhattan bank account. Later he used some of the moneyto pay out 'dividends' to investors.

Investigators do still not know how much money was stolen by Madoff and his family and accomplices. Prosecutors say that $ 170 billion flowed through the principal Madoff account over the decades, and that weeks before the crook's arrest last December the firm's statements showed a total of $ 65 billion in accounts. But the trustee winding down the Madoff operation has so far collected only $ 1.2 billion which should be returned to investors.

Before the big swindle came to light, the investors were just too greedy to even touch the boat, left alone rock it. As long as their cheques were coming in on time, they did not ask any questions.
The fact that most of them were Jewish also played a significant role. There is still this strange myth of 'the chosen people', the belief that 'God' has for some reason selected Jews to rule the world and thus gives them better chances and more skills than other people have.
For years some of the biggest names in American Jewry were queuing to see fellow Jew Bernard Madoff and give him money. There was apparently no-one who knew more about money and investment than he. At least that was the whisper around synagogues, luxury saunas and golf clubs.

Well, 'pride cometh before the fall', as a famous Jewish book - the Bible - tells us. And greed comes before the bust, I hasten to add in the same spirit.

All the people who are now crying for their money, spitting on Madoff and applauding his long jail sentence, are the very same people who were singing his praise up to six months ago, and giving him ever more money 'to invest'.
None of them ever used his (or her) brains and questioned the possibilities of Madoff's steady success. If he could do that, why was no-one else able to do it, too? After all, we live in an open society and there are very few secrets left in the world of business and finance. If someone finds a new way to phenomenal success, there are soon scores of people following the same line. But no-one followed Madoff. This should have made many people suspicious. But their own greed blinded them.

And thus - I have to say - they are at least partly responsible for the big mess they find themselves in now. Without their only too willing co-operation the fraudster and thief Bernard Madoff could not have done it.
So I will not be able to feel sorry for them and see them as the 'poor victims of crime'. They are very rich victims of a crime they helped to commit.

"I leave a legacy of shame to my family. I am responsible for a great deal of suffering and pain. And I live in a tormented state," Madoff told the court. However, it did not make a great impression. His defence lawyers had hoped and argued that "a 12-year sentence would be severe enough", but the Judge was not willing to be lenient in a case of such dimensions.

So the 71-year-old will spend the rest of his life in prison and die there. Which - in my opinion - serves him right and is more than fair. He spent seven decades - the vast majority of his life - in great wealth and luxury. And given his age, he will probably not be incarcerated for too many years.

However, there is one thing in this case that makes no sense. And that is the actual length of the sentence. Anyone knows that the average life expectancy of a human being in the western world is currently somewhere between 70 and 80 years, depending on country, health and other elements. So what is the point of sending someone to prison for about twice the time of his natural life? Are they keeping dead bodies incarcerated in the USA if their sentence is not yet fully served? I doubt it.

So what is the point? Frankly, I cannot see one. Why not just give someone like Madoff a life sentence - without parole - which really means 'imprisonment for life'. Many people - myself included - have problems with taking a legal system (and the country it serves) for serious when it has such irrational and ridiculous sentences.

Bernard Madoff is not the only case where a totally irrational sentence was passed. American jails are full with people on sentences lasting several centuries. People are regularly given multiple life sentences, and even multiple death sentences.

With regards to Bernard Madoff, they can put him in and throw away the key, as far as I am concerned. The man did wrong in a big way and harmed many people in the process. And all for nothing but greed. So he deserves to rot in prison (and afterwards in Hell, if there is such a place).

But in the interest of sincerity and common sense the irrational sentences passed by US courts should be examined and the whole legal system reformed to make it more realistic and believable. As President Obama is a lawyer and Professor of Law, maybe he could bring his influence to bear on this matter. It could do a lot of good to America.

The Emerald Islander

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