Thanks to The Economist
The name Bernie Madoff (pronounced made-off, as in he MADE-OFF with your money) may ring a bell. If not we here at USDemocrazy can fill you in:
Madoff organized one of the biggest scams of all time. Current estimates show that he committed at least $65 Billion in fraud. He did this through a technique known as a Ponzi Scheme.
A Ponzi Scheme (not to be confused with the leather clad, motorcycle riding, Fonzi scheme) is a four step process:
- Attract some investors with promises of great returns on their money.
- Take their money and pretend to invest it.
- Get more investors and use their money to pay back the initial investors.
- Rinse and repeat.
As word gets around about your “great investment” more people flock in, bringing in plenty of greenbacks. For more info, check out this NPR report.
Now, you may be saying how can I get in on this? Madoff was a big Wall Street executive, how can I, a working stiff, scam my family and friends?
Craig Ginsberg managed to swindle $4 million using gift cards instead of stocks. See, it’s that easy!
Now before you go start your own little scam, here is a warning of the risk. Madoff currently is facing up to 150 years in prison for his crimes. He’ll get out when he’s 220 years old.
Who said investing wasn’t risky?
