Surprise! The Madoffs Made Off With Even More

Just in time for Valentine’s Day, we get word of what sounds like a perfect partnership. Bernard Madoff’s wife, Ruth, allegedly withdrew about $15 million from the bank suspiciously close to the moment when her husband’s $50 billion Ponzi scheme came to light. Honey, you’re the best!

Ruth Madoff withdrew $10 million from Cohmad Securities (which, according to regulators, was "intertwined" with Bernie Madoff’s company) the day before her husband was arrested in December. A couple weeks beforehand, she had taken out $5.5 million.

I don’t know, maybe she just had a really massive shopping spree planned and was completely clueless that her husband’s jig was just about up, but ummm ... yeah, right. (And of course, shortly after the media firestorm surrounding Madoff’s rip-off, we all learned that Tiffany (NYSE: TIF  ) and Cartier baubles had allegedly been sent to friends and family, despite a court order restricting asset movement. Um, can you say, “Let’s grab everything and hide it before the Feds find it”?)

Motley Fool co-founder Tom Gardner recently wrote an awesome article about how hundreds should go to jail, given all the bad actions that have been taking place, pointing out the outrageous pay awarded to CEOs who presided over Washington Mutual (now part of JPMorgan Chase (NYSE: JPM  ) ), AIG (NYSE: AIG  ) , and Merrill Lynch (now part of Bank of America (NYSE: BAC  ) ). These are the folks who arguably presided over ruin and yet managed to run off with big bucks anyway.

It’s true that we have seen too many instances of folks who have exhibited their greed in what should be considered a downright criminal manner. Yet Bernie Madoff still sits in his swanky penthouse instead of the big house.

True, Madoff did pay a $10 million bail, and I guess the judge’s thoughts that this dude wasn’t a danger to the community or a flight risk have some logic, but hello, grifting $50 billion out of people seems like a pretty major transgression against society.

And here’s a thought: Consider all the media hoopla about Olympic hero Michael Phelps’ marijuana smoking and the buzz about his possible arrest. Meanwhile, Madoff sits comfortably in his penthouse. That might really make you wonder where priorities are these days. Maybe runaway greed really has become a virtue -- or at least an understandable vice? Save us all, then.

I’ve heard a few people complain about the dangers of the hysterical, pitchfork-wielding “court of public opinion” here lately, but I believe in that sort of thing -- a little public shaming is freaking awesome and called for. I say, let’s shame these people and expect better behavior. This goes beyond simple legality, since people should know how to act like ethical human beings. The lack of remorse some of these villains have demonstrated shows an appalling absence of morals or responsibility.

There was a time when people were concerned about their reputations (or whether they might burn in hell for eternity for what they’d done). I have to wonder how many of these people whose bank accounts hover in the millions or billions think those numbers are what make them “good” people -- a terrifying thought. Do you want that kind of person living next door to you? I sure don’t. Because let’s face it, it’s more than clear that the uber-wealthy get away with a lot, and that’s shameful too.

Well, shame, shame, shame. And that’s the truth, Ruth.   

JPMorgan Chase is a current and Bank of America a former Motley Fool Income Investor selection. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.


Read/Post Comments (30) | Recommend This Article (93)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 12, 2009, at 4:22 PM, whereaminow wrote:

    I agree Alyce.

    While we're at it, it would be nice to open up the books of the Federal Reserve as well, and let's see how many billions they are bilking us out of. I would suspect that 95 years of stealing from the American people would probably dwarf Madoff's despicable activities.

    So let's close all the Ponzi schemes, particularly the one where the next generation of taxpayers is forced to pay for this generation's greed. Ya know, the greed of the public works do-gooders that rip us off every day. That's to the tune of $1 trillion per year last time I checked. That's roughly the amount of income tax we pay, most of which goes to paying the interest on the national debt.

    Now THAT'S a ponzi scheme. Oh, and the beauty of it is that we get nothing for it. No roads, no schools, nothing. It pays the interest on the debt so that the government can engage in even more boondoggling.

    Madoff is a colossal scumbag and I hope he spends the rest of his short life in jail. It would be even better, however, if we could set aside some jail cells near his for the other Ponzi schemers in Washington D.C.

  • Report this Comment On February 12, 2009, at 7:52 PM, pzbar wrote:

    This is a refreshing article, mostly because it indicates a rejection of the greed which has controlled Wall Street for generations. Maybe this time it is different. I'd like to think so. The Boomers have blown it, much to their unending shame. Yet reading between the lines of this article I sense (hopefully) a generational shift on the ethical front. This is what investors and all believers in fundamental fairness have been waiting for, especially after the past eight years of deregulated, winner-steal-all madness.

    Phil Trupp

    Washington DC

  • Report this Comment On February 12, 2009, at 9:07 PM, teejk wrote:

    Bernie...

    $50bil is a lot of money and I still can't figure out how it is that high...even the most inept day trader could not have lost that much given what he was playing with...I suspect that there is a boat-load of money sitting in swiss private bank accounts. Irony being what it is, it will sit there forever because no way can he go back and get it now.

  • Report this Comment On February 12, 2009, at 9:33 PM, mytravelguy wrote:

    I am all for shunning them, a quaint custom which does have its place. They all did very bad things that hurt many people - shameful! They should all do jail time - as did Martha Stewart and Michael Milken and John DeLorean, to name a few, who still managed to end up quite wealthy even after "paying their debt to society." Not hardly enough, but it made me feel a little bit better.

  • Report this Comment On February 12, 2009, at 9:49 PM, xetn wrote:

    The contention of Phil Trupp of deregulation, that is just so much bs. Please see:

    http://www.heritage.org/research/regulation/bg2116.cfm for the real truth about government regulation. It has risen in the last 8 years not decreased.

  • Report this Comment On February 12, 2009, at 9:50 PM, kurtisj wrote:

    The court system and the judge is really screwing this one up. The families and funds that lost their money should not have to endure the ongoing Madoff payouts of their stolen money. Maybe Guantanamo could finally be put to proper use here for Bernie, his wife, and his crew.

    pzbar - I really wonder if GenX will be much better?

  • Report this Comment On February 12, 2009, at 10:10 PM, kurtisj wrote:

    xetn-

    The heritage link rambles on with generalizations regarding federal regulations. Like, the number of pages in a regulations book. Do you seriously think that it accurately evaluates the regulatory environment for investment banking during the past eight years? It does not.

  • Report this Comment On February 12, 2009, at 11:14 PM, JibJabs wrote:

    Damn good article - I agree with your analysis of the irreligiosity of our times, too.

  • Report this Comment On February 13, 2009, at 12:24 AM, FleaBagger wrote:

    0x4b6a-

    You criticize the Heritage article, but where are your facts? Those of us who work in (or despite) government every day are keenly aware of the ever-growing influence of regulation in our lives, regardless of who is president.

  • Report this Comment On February 13, 2009, at 2:13 AM, FLEESEee wrote:

    I'd give my last buck,just give me 5 minutes with that S.O.B......and I'd be dead broke....and so would he.....Bernie Madoff......

  • Report this Comment On February 13, 2009, at 4:36 AM, RRGGBB wrote:

    I would love to see a positive shift in the downfall of the American Empire brought about by this distasteful greed and corruption that plagues our God loving society.

    When will people wake-up? When will our education system start teaching people again? When will people face the truth behind the premises of religion and how they are stealing people blind? When will nations stop going to war over human created ideas of deities?

    When will we replace Federal Reserve, which is not a government agency but a for profit entity that blatantly profits and thrives off the blood of hard working American people?

    September 11th comes to mind, an opportunity to re-center a democratic society instead we fueled further our demise and feathered the nest of a selected few, including the Federal Reserve.

    This shameful behavior needs to be punished not only by taking back the funds that have been stolen by bank executives and the likes of Madoff, but all of their assists should be liquidated and distributed to rebuild our economy. After imprisonment they should be forced to work menial jobs and learn what it is like to exist on minimum wage for the rest of their life inclucding their families lives since they also benefited from corruption. This might make people think twice.

  • Report this Comment On February 13, 2009, at 4:39 AM, RRGGBB wrote:

    I would love to see a positive shift in the downfall of the American Empire brought about by this distasteful greed and corruption that plagues our God loving society.

    When will people wake-up? When will our education system start teaching people again? When will people face the truth behind the premises of religion and how they are stealing people blind? When will nations stop going to war over human created ideas of deities?

    When will we replace the Federal Reserve, which is not a government agency but a for profit entity that blatantly profits and thrives off the blood of hard working American people?

    September 11th comes to mind, an opportunity to re-center a democratic society instead we fueled further our demise and feathered the nest of a selected few, including the Federal Reserve.

    This shameful behavior needs to be punished not only by taking back the funds that have been stolen by bank executives and the likes of Madoff, but all of their assets should be liquidated and distributed to rebuild our economy. After imprisonment they should be forced to work menial jobs and learn what it is like to exist on minimum wage for the rest of their life. This punishment should include their families lives as well since they also benefited from corruption. This might make people think twice.

  • Report this Comment On February 13, 2009, at 8:33 AM, AlyceFan wrote:

    I agree with the sentiment in this article, and your juxtaposition of how Madoff and Michael Phelps are being treated in the media is appropriate - in fact spot on. Personally I think Madoff ought to be forced to clean latrines with his tongue for the rest of his life.

    However, even scumbag billionaires have legal rights. He isn't sitting in jail because he has yet to be convicted (as I am certain he will be). Bail is there to prevent a person charged with a crime from fleeing. As you point out Madoff is not a flight risk, and so he gets to sit in his penthouse awaiting trial...as galling as that is...

    I know the rich have unfair access to the legal system that the poor do not have, and Madoff will no doubt benefit from that. It is a major defect in our legal system that needs to be addressed - urgently.

    It is also a defect when people (and I use that word loosely in this case) can so easily abscond with other peoples money with no legal course available to public for redress.

    However it is also true the legal rights of an individual cannot be curtailed by the weight of public opinion. Allowing that would be equally as destructive...

  • Report this Comment On February 13, 2009, at 8:46 AM, Smallworld0 wrote:

    "However, even scumbag billionaires have legal rights. He isn't sitting in jail because he has yet to be convicted (as I am certain he will be). Bail is there to prevent a person charged with a crime from fleeing. As you point out Madoff is not a flight risk, and so he gets to sit in his penthouse awaiting trial...as galling as that is..."

    Maybe, there should be some law where someone like Madoff had to 'live' in a half-way house with ex-cons, until his trial comes around. I mean, he would be 'free' to roam - but, not get to live in his pretty, pretty penthouse!

  • Report this Comment On February 13, 2009, at 8:56 AM, AlyceFan wrote:

    "Maybe, there should be some law where someone like Madoff had to 'live' in a half-way house with ex-cons, until his trial comes around. I mean, he would be 'free' to roam - but, not get to live in his pretty, pretty penthouse!"

    Easy to say, impossible to implement. I understand the sentiment - I really do. But. Who pays for the upkeep of his penthouse? What if he is acquitted - will he get it back? Who reimburses the halfway house for the expense of keeping him?

    The law cannot treat someone differently because they are unpopular - no matter how obviously guilty they may seem.

  • Report this Comment On February 13, 2009, at 9:17 AM, TMFLomax wrote:

    Thanks for all these comments -- whereaminow, I like your point.

    AlyceFan (nice, haha), thanks for being the voice of reason to counterpoint my outrage. You're bringing up very true and solid points and you're right that our legal system may have some flaws but that it is also very good. By "court of public opinion," I don't mean we should be able to literally mob these guy and poke them with forks because we've just convicted them. I just feel the public does have reason to be outraged, and deserves to speak out and be heard, because when people complain about it, at what point is the message, people should just shut up and roll with the way things are. I truly believe public opinion matters. And I don't like what I've been seeing... this trend of these people who don't appear to feel responsible or care what's right or what anybody thinks. I think the main point I was driving at was fear of a deterioration of ethics and responsibility to society at large, and that we should expect better, and nobody's above that. But you're absolutely right that as galling as it is, the laws are the way they are for a reason, and yes of course every individual does have rights.

    Thanks again, everybody. I am enjoying the conversation.

  • Report this Comment On February 13, 2009, at 9:19 AM, TMFLomax wrote:

    Oh and by "galling," I meant this guy sitting in his multi-million dollar penthouse surrounded by his stuff.

  • Report this Comment On February 13, 2009, at 9:45 AM, AlyceFan wrote:

    Alyce, didn't mean to imply you literally wanted to curtail Madoff's legal rights. I absolutely agree with you that a big dose of public humiliation is warranted. It might make the next "Madoff" think twice (though I am skeptical). And believe me I am as outraged by this guy as anyone...

    But a public mob mentality can develop in cases like this, and public officials are as prone to be swayed by intense pressure as anyone. If not occasionally grounded by a discussion of what the law is, and why it is there, this type of intense pressure can work to undermine due process.

    Keep up the good work!

  • Report this Comment On February 13, 2009, at 11:02 AM, smudgenpudge wrote:

    Madoff's not a Baby Boomer...too old. He, like the other Wall St. crooks without ethics or shame who DO happen to be in the "boomer" generation, is just what he is - an unprincipled, greedy, con-man. Those exist in every generation and age group.

  • Report this Comment On February 13, 2009, at 11:14 AM, jesse2159 wrote:

    Dear Bernie and Ruth,

    Are you two nuts ! $15 million is a mere pittance. Had I stolen $50 billion, you could rest assured that there would be at least a billion stashed all over the world, especially in places where no one could find you or extradite you. Is this the best could could do? Surely over the years you established some secret little hidden accounts to see you through your golden years. And incidentially, why didn't you simply disappear before you made it all public? This is very poor planning.

  • Report this Comment On February 13, 2009, at 11:20 AM, intelledgement wrote:

    teejk wrote:

    > $50bil is a lot of money and I still can't figure out

    > how it is that high...even the most inept day trader

    > could not have lost that much given what he was

    > playing with.

    teejk, there never was $50B...that is Madoff''s estimate of how much there would have been if his investment strategy had actually been working the way he claimed it was...but as in reality he never invested the money - just parked it in liquid accounts and drew from it to pay "expenses" and cover withdrawals - what he really "lost" is the money he was given to invest, minus the money he paid out for withdrawals, which may net out to as much as $19B, but I expect will prove to be substantially less.

  • Report this Comment On February 13, 2009, at 12:45 PM, billjam wrote:

    Couldn't agree more. As to Madoff being out on bail, I thought the judge did him a huge favor by restricting him to his apartment. Madoff was clueless if he wanted to wander the streets of New York. He's made a lot of bitter enemies. One TV reporter even made a point of mentioning that Madoff was wearing a bullet proof vest. Note to angry investors: go for the head shot.

  • Report this Comment On February 13, 2009, at 2:02 PM, JoaniInTheWind wrote:

    I am trying to stay out of foreclosure ~ thanks to Bernie Madoff! 100% of my husband's money was invested there! To make life even more interesting ~ we are both disabled senior citizens.

    We were never rich, never belong to any country club. Now we are trying to avoid putting our dogs to sleep and becoming homeless. Thanks Bernie!

  • Report this Comment On February 13, 2009, at 3:58 PM, 7351jay wrote:

    I personally think that Madoff gave big contributions to most of the judges in NYC. Ergo no jail time for bail violations. If I were Madoff I would be worried. Some people may not like it to see him walking around free after he stole some of my money.

    The man belongs in prison and NOT a club fed. 25 years would be about right.

  • Report this Comment On February 14, 2009, at 11:36 PM, rdlincoln wrote:

    If guilty as accused, Madoff's conduct was reprehensible. If convicted, he will not likely face the sort of justice that would seem appropriate, due to his age and the state of lax justice in America. I do find it difficult to feel a full measure of sympathy for his "victims". A truly honest person has to question returns that are "too good to be true". Surely, only a hopelessly naive person would put "all their eggs in one basket". I don't trust anyone enough to put my life in their hands to that extent. I can't even imagine the degree of greed that motivates one to "invest" hundreds of millions, or more, to acquire even more. And last but not least, a few even committed suicide over their loss. Suicide? Over money? Truly we are all living in an "open air insane asylum"!

  • Report this Comment On February 15, 2009, at 1:24 AM, wippling wrote:

    Just one question: Where are the 10 million for his bail from?

  • Report this Comment On February 15, 2009, at 8:22 PM, TomChristy wrote:

    They should both go to jail for the remainder of their lives! All relatives and friends should be investigated and charged as well for receiving stolen property.If they pay-off Obama , he'll get them off with a reprimand or have them become joint cabinet members. Possibly "keepers" of the locks at Ft. Knox? Mr. and Mrs. may go to jail for a minimum amount of time...bet on it!

  • Report this Comment On February 19, 2009, at 4:05 PM, alalD92 wrote:

    Even if he somehow gets off, he wouldnt live long.

  • Report this Comment On February 19, 2009, at 10:58 PM, lanceski wrote:

    We should go back a few hundred years to use an old punishment. He should tarred & feathered and tied to a lightpole on Wall Street with the sign: Bernie Made off with your money by conning you, what are you going to do about it?

  • Report this Comment On March 04, 2009, at 8:40 PM, prosandbagger wrote:

    Report this Comment On February 13, 2009, at 2:02 PM, JoaniInTheWind wrote: I am trying to stay out of foreclosure ~ thanks to Bernie Madoff! 100% of my husband's money was invested there! To make life even more interesting ~ we are both disabled senior citizens.

    We were never rich, never belong to any country club. Now we are trying to avoid putting our dogs to sleep and becoming homeless. Thanks Bernie!

    joanilin YOUR A STORY TELLER AND FULL OF B.S.

    YOU NEVER HAD ANY EGGS TO PUT IN ANY BASKET AND READ NEWS FOR ONLY THE BAD NEWS. YOU NEED TO TAKE A TRUTH PILL !!!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 830955, ~/Articles/ArticleHandler.aspx, 10/23/2014 2:51:51 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASD 4,382.85 -36.63 -0.83%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/22/2014 4:00 PM
AIG $51.67 Down -0.48 -0.92%
American Internati… CAPS Rating: ****
BAC $16.40 Down -0.20 -1.20%
Bank of America CAPS Rating: ****
JPM $57.45 Down -0.48 -0.83%
JPMorgan Chase & C… CAPS Rating: ****
TIF $93.00 Down -0.21 -0.23%
Tiffany & Co. CAPS Rating: ***

Advertisement