Wednesday, March 11, 2009
Here is the Information filed by the U.S. Attorney in the Bernard Madoff case. It does not contain much new information about how Madoff conducted his fraud. It alleges that Madoff's ponzi scheme began at least as early as the 1980s, that Madoff misrepresented that he used an investment strategy known as a "split strike conversion" strategy, but that in fact he made no trades for the investors. Contrary to other published sources that Madoff promised investors a steady 10% return, the information alleges that he promised investors varying returns and some investors were promised as much as 46%. Madoff created a large infrastructure to generate the impression that he was engaged in legitimate business activities, including hiring numerous employees to serve as the "back office" and generate the phony account statements and trade commissions. In addition, from at least 2002, Madoff transferred more than $250 million to the London firm to create the impression he was conducting transactions in Europe on behalf of investors.
As of November 2008, Madoff had about 4800 client accounts, whose account statements reported a collective balance of $64.8 billion.
The Information contains 11 counts, including securities fraud, mail fraud, wire fraud, money laundering and perjury charges, relating to sworn testimony Madoff gave before the SEC in May 2006. The Information does not name any accomplices.