The man who defrauded some 30,000 investors out of an estimated $17 billion died in prison, apparently due to failing health.
Madoff lived a seemingly charmed life for decades, starting with a compelling rags-to-riches story.
In 1960, Madoff took his brother Peter, along with a little money he’d saved from installing sprinklers and working as a lifeguard, to Wall Street. By the 1980s, Madoff’s firm occupied three floors of a Midtown Manhattan high rise.
From there, he helped found the NASDAQ stock exchange and generated false financial statements which purported to show stock shares exchanging hands and investors making money.
During a 2009 hearing, Madoff CFO Frank DiPascali flatly admitted that these statements were “all fake.”
To date, a court-appointed attorney has fielded over 16,000 claims and distributed over $13 billion to victims.
Charles Ponzi ran the first Ponzi scheme between 1919 and 1920.
He used money from new investors to pay “dividends” to current investors.
But “Charles Ponzi is now a footnote,” opined a noted white collar criminal defense attorney. “They’re now Madoff schemes.”
In 2020, Madoff’s lawyers filed a petition for his release, citing the coronavirus pandemic and his health problems, which included end-stage renal failure.
The Most Common Financial Scams
Unfortunately, financial fraud matters aren’t limited to people like Bernie Madoff.
In 2020, an estimated 2.1 million people lost over $3.3 billion to fraudsters.
Like the Madoff Ponzi scheme, some of these sophisticated scams ensnare thousands of people and millions of dollars.
Much more commonly, however, people fall victim to smaller-scale frauds. Since so many people live hand to mouth, these schemes are often devastating, especially if the victims lose more than a few hundred dollars.
Some examples include:
- Abuse of Trust: Elderly people are especially vulnerable to caregiver and family member fraud. These individuals take advantage of a position of trust. Sometimes the scam involves a false hard-luck story. Other times, unscrupulous people trick older adults into signing legal documents. So, if one of your loved ones is getting older, watch his or her legal and financial affairs closely.
- Online Dating: These scams have become more common during the coronavirus pandemic. Fraudsters create fake profiles, win a person’s trust, ask for money, usually a gift card, and then disappear. A good rule of thumb, albeit a rather cynical one, is to assume “Jeff” is an imposter until you meet “Jeff” in person.
- Telephone Scams: It’s rather easy to disguise Caller ID information and impersonate a government agent or bank. The scammer then promises a windfall or demands payment. Normally, these entities don’t contact people by telephone. These entities definitely do not ask for Western Union payments.
- COVID-19 Scams: The pandemic has created a cottage industry of various financial frauds. “Contact tracers” ask for personal information, scammers solicit donations for fake charities, and fake health-related emails induce people to click links or transfer personal information.
There are others as well. Computer theft might be the most common one. Sometimes, these frauds involve sophisticated hackers.
Much more frequently, however, users simply leave thumb drives and other storage devices unattended.
Usually, the best way to protect yourself from computer theft, and all these scams, is to always invest in additional technological or emotional security measures.
What to Do If You’re a Victim
Just as security measures get stronger every day, fraudsters become cleverer every day. 2.1 million victims are an awful lot of people.
Most of them probably took roughly the same precautions we’ve discussed in this blog.
So, if you are a victim of a financial fraud, don’t be embarrassed. You are not the first person to fall victim to a scheme, and you certainly won’t be the last one.
It’s natural to feel embarrassed and just want the fraud to be over. But reporting it is the only way to protect yourself, and the only way to protect others.
Start by reporting the fraud to the Federal Trade Commission.
Reporting fraud is always easy and usually more effective than you realize.
Also, send out an informal alert on social media. That notice often forces fraudsters to back off even faster than a government investigation.
If you are the victim of a financial fraud, you have the tools to help yourself. If you’re the victim of an accident or other injury, you can count on the experienced New York personal injury lawyers at Napoli Shkolnik PLLC.
Call us now for a free consultation.