Madoff is in jail today. He has put millions of dollars of many hard working people into oblivion.
I guess the expression “Laughing away to his bank” was actually made for Madoff… as he “Made off” with the hard earned money of his victims.
And what was his scheme? Well he would take money from wealthy people promising them 10-30% “safe” returns. And how was he investing that money? Well, he would take the money and deposit it into Chase bank account for the basic interest (3-4%??). When someone would ask for money, he would pay them… but would need more “investors” (or really victims) to keep the Ponzi scheme going!
Today he said that he knew he would end up in jail one day, but even though he was aware of the mess, he could not extricate himself out of this once he was in it.
What he used was an old marketing technique.. where he would only deal with people who were “in” a club. So, there was an air of exclusiveness. That made him believable and also someone special. He was smart in that he could pull it off for years – indeed decades!
Nothing I have heard in this entire episode is as tragic as this couple – where the man Ian Thiermann, a 90 year old, owned a pest control company which he sold to retire 25 years back. He had his money invested with Madoff and enjoyed returns of 10 to 12 percent each year on his savings for about 15 years regardless of whether markets rose or fell.
Now Thiermann works at the local grocery store handing out fliers Ben Lomond, California.
It is instructive to read how he was sucked into this entire thing!
A very close friend said that he and his family had been involved in an investment for the previous 30 years – 30 years, you understand. And they received the same amount, it wasn’t a great amount but on average about 10 percent, over the years, even in the crashes that had taken place. They were never been affected by the crashes.
He said there’s an opportunity to get into this thing. And we could form a partnership and so forth and get into it. We knew him very, very well. A number of us we’re trying to be thoughtful of our own investments. Here’s a guy and his family who has been in it for the last 30 years.
We had been in it for about 15 years. And in the last recession in the 1990s, we just received the same amount, about 8 to 10 percent, and we were extremely pleased. It didn’t affect us at all. And then suddenly, when the crash took place and so forth, I called our friend and said this sounds really serious, can we get out and put it in something else. He said ‘that’s a good idea’. So he did. We got word back that everything had been put into Treasury bonds. That’s what he thought. He was dealing with this guy Madoff for all those years. And he had confidence in him.
He called us around December 15 and said ‘I’ve lost everything and you have lost everything’.