Madoff probe uncovers fresh scams

[emad]

* James Doran in New York
* The Observer, Sunday 21 December 2008


Investigators are unearthing more irregularities in the financial affairs of Bernard Madoff, the man who stunned America's wealthy elite when he allegedly admitted running the biggest investment scam in history.

Initially, it was thought he was running a simple pyramid scheme. But Steve Harbeck, head of the Securities Investor Protection Corporation and the receiver of Madoff's broker-dealer business, said the investigation had uncovered a trove of records stretching back at least 20 years. "We do not seem to be dealing with a traditional Ponzi scheme alone," said Harbeck. "Ponzi" frauds occur when the money from new investors is used to pay existing ones. "This seems to be something of a hybrid," Harbeck said, adding that the potential losses could be far greater than anyone first thought.

He was unable to elaborate on the types of fraud that were emerging. But sources close to the Madoff investigations suggested the trader may also have falsified tax documents and other records to show fake profits to his investors. Harbeck would only say: "It is just too early to say exactly what else was going on here."

The new allegations are understood to revolve around two sets of books that Madoff kept for his investment advisory business. Investigators have discovered records on thousands of trades in shares and bonds and other securities in seven binders stored on the private 17th floor of the Lipstick Building on Manhattan's Third Avenue. The investigators believe the positions detailed in the binders may be fake, used only to compile fraudulent statements of account to clients.

http://www.guardian.co.uk/business/2008/dec/21/bernard-madoff-fraud-investment-scam

[marketcrazy1]

1. no surprise here, I fully exspect

losses from the madoff "ponzi scheme" to total 160 to 170 billion when all is said and done.

[Double T]

2. Heavy regulation and brutal oversight are the only ways to deal with the wall street criminals.

There are plenty more madoffs to be discovered.