Among the options: Get in line with other victims looking for restitution. Keep quiet and hope nobody notices. Return the money. Or hire a lawyer and fight to keep profits that were probably fraudulent. [1]
Doom saw this one coming a few days ago, but Caruso’s headline pretty well nails it: "Madoff ‘victims’ do math, realize they profited" … as in, oops!
I’m going to have to re-read The Warden. Trollope does a fine job exploring the moral dilemmas involved with poking into the seamy side of financial arrangements entered into in good faith. The present situation is particularly nasty because the modest rate of fraudulent gains allowed the Ponzi to expand to monstrous proportions. Because it was an affinity fraud on top of everything else, the "gains" will likely be concentrated into the affinity group, including folks who have been innocently investing in charity work and education for their children and grandchildren for decades. Disenchanting them of the fairy-gold that has been supporting their lifestyles and good works is one thing, but to now claw-back substantial fraudulent conveyance from these people has the potential to be especially devastating.
I’ve been predicting, since US politicians have undoubtedly benefited hugely from that same intense charity, that the whole mess will be TARP’d over soon under Congressional pressure. That being said, is this necessarily a bad thing?
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[1]: "Madoff ‘victims’ do math, realize they profited", by David B. Caruso, AP / SF Chronicle, January 8, 2009.
if you invested 1 million 10 years ago and just got your 10-15% each year, you MADE money, correct? i don’t know the specifics but SOME of these people got most of their money back didn’t they? in this type of scam isn’t it just the most recent investors that got screwed? or was madoff not paying ANYTHING out over the years?
AZSaluki-
That’s the rub, isn’t it? Many of his investors DID make money, but run the risk of having to pay it back, as it was stolen from other investors.
It sounds like anyone who was a net winner but is still owed money by Madoff might find that filing a claim will cost them money, rather than recovering anything.