Bernard Madoff Essay

Words: 1225
Pages: 5


This paper will describe the situation and issues regarding Bernard Madoff. It will cover the following questions:
1. Why was Mr. Madoff allowed to perpetrate such a fraud and how long did it take for authorities to find out?
2. What government agencies were involved in finding out of the fraud (federal, state, and/or local), and what did they charge him with?
3. How do the deductions allowed to the victims affect the rest of the taxpayers and what rule of taxation law is being applied? Is this fair, equitable, and/or ethical?
4. Should casualty loss taxation policy be changed to stop victims of Ponzi schemes from having a tax casualty loss deduction advantage over other taxpayers, how so? Introduction Bernard Madoff, born on insert DOB, created a well-known investing scheme, also known as the Ponzi scheme, which stole over millions of dollars from investors. On March 12, 2009, Bernie Madoff was sentenced to 150 years in prison for the fraud and victims continue to collect losses (source).
The questions that puzzled, and continue to puzzle, the public as well
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At the time, investment advisers with less than 15% were not required to register with the SEC. Bernie decided not to register to escape scrutiny of securities regulators and to avoid ending up like his mother. His mother’s license had been lost in 1963 following an investigation of various investment firms for not filing financial reports with the SEC. Sylvia Madoff lost her license and her business and was banned from the securities industry. Bernie’s father, who had started the business, had continued to earn money as an investment adviser even though he did not hold an investment adviser nor a stockbroker’s license. Bernie did not want to take the chance of being audited and banned from the industry due to his failure to follow SEC licensing