Pyramid and Ponzi schemes

Source: Wikipedia. Pages: 97. Chapters: Pyramid scheme, Ponzi scheme, Charles Ponzi, Madoff investment scandal, Bernard Madoff, Scott W. Rothstein, List of Ponzi schemes, Norman Hsu, J. Ezra Merkin, Allen Stanford, Barry Minkow, Lou Pearlman, Arthur Nadel, Stanford Financial Group, Holiday Magic, Tom Petters, U-Vistract, Danny Pang, Laura Pendergest-Holt, Franchise fraud, FundAmerica, Bernard Cornfeld, Frank DiPascali, WinCapita, Foundation for New Era Philanthropy, Matrix scheme, G12 Vision, Joel N. Ward, Robert Douglas Hartmann, Solomon Dwek, Reed Slatkin, Stock Generation, Yilishen Tianxi Group, David G. Friehling, Ron Rewald, MMM, Studiotraffic, John McNamara, High-yield investment program, K1 fund, Kevin Foster, Caritas, Valerie Red-Horse, 1997 rebellion in Albania, Operation Broken Trust, Earl Jones, Make Money Fast, USA Capital, Bayou Hedge Fund Group, Cherry Shares, Swiss Mutual Fund, Stanley Chais, World Plus, D.M.G. Grupo Holding S.A., Samuel Israel III, Gary Sorenson, Petters Group Worldwide, Joseph S. Forte, Double Shah, Afinsa, Success University, Greater Ministries International, GKO-OFZ, Charis Johnson, Bishop, Baldwin, Rewald, Dillingham and Wong, Kubus scheme, Rick Koerber, Investors Overseas Service, Steven Hoffenberg, James Nicholson, Lyonya Golubkov, Angelo Haligiannis, T5PC, Dona Branca, Allied Deals Inc., Equinox, Tenka Ikka no Kai, Andrew Duncan, James M. Davis, Airplane game. Excerpt: The Madoff investment scandal broke in December 2008, when former NASDAQ chairman Bernard Madoff admitted that the wealth management arm of his business was an elaborate Ponzi scheme. He founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest. Alerted by his sons, federal authorities arrested Madoff on December 11, 2008. On March 12, 2009, Madoff pleaded guilty to 11 federal crimes and admitted to operating what has been called by The Market Oracle the largest investor fraud ever committed by an individual. On June 29, 2009, he was sentenced to 150 years in prison with restitution of $170 billion. According to the original federal charges, Madoff said that his firm had "liabilities of approximately US$50 billion". Prosecutors estimated the size of the fraud to be $64.8 billion, based on the amounts in the accounts of Madoff's 4,800 clients as of November 30, 2008. Ignoring opportunity costs and taxes paid on fictitious profits, half of Madoff's direct investors lost no money. Investigators have determined others were involved in the scheme. The U.S. Securities and Exchange Commission (SEC) has also come under fire for not investigating Madoff more thoroughly; questions about his firm had been raised as early as 1999. Madoff's business, in the process of liquidation, was one of the top market makers on Wall Street and in 2008, the sixth-largest. Madoff's personal and business asset freeze has created a chain reaction throughout the world's business and philanthropic community, forcing many organizations to at least temporarily close, including the Robert I. Lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation. Madoff started his firm in 1960 as a penny stock trader with $5,000 (about $35,000 in 2008 dollars), earned from working as a lifeguard and sprinkler installer. His fledgling business began to grow with the assistance of his father-in-law, accountant Saul Alpern, who referr