‘Madoffed’ at Chandigarh

‘Madoffed’ at Chandigarh
by Harwant Singh

We would not have known Maydoff in such detail had we not been in the US, where for over a month he stayed on the front pages of American newspapers. Further, he lived only a few blocks from where we stayed in Manhattan. 

Madoff’s’ contribution to the US society is considerable. He has pauperised many millionaires and added a new lexicon to the American vocabulary: “Madoffed”, simply stated means swindled. There is no better introduction than to describe him as the father of the mother of all ponzy schemes.
Bernard L. Madoff created the largest Ponzi scheme in history. At a rough count, it is 50 billion dollars. The victims range from Jewish relatives, friends, acquaintances, lawyers, inheritance millionaires to banks manned by some of the cleverest financial experts. Some victims who lived in the lap of luxury are now in a state of penury. 

Most of them were members of the Palm Beach Club, where membership costs a fortune and it is here in this seven-star luxury that the victim had to lobby a great deal to be introduced to Madoff for an opportunity to invest in his scheme.

The essential ingredients of a Ponzy scheme are winning the trust of the investor through the display of supreme confidence, painting an exceptionally rosy picture and assuring a huge income on investment and initially following it up by actual payments of hefty returns. Have a couple of respectable “front-men” and put them in a posh office, from where they can rope in friends, acquaintances and the unwary. 

Returns are not out of investments but from new deposits, and once this cycle is established the scheme has a smooth sailing till new investors stop showing up. Slowly, the returns keep coming down and at some calculated point the promoters disappear with the deposits.

Such schemes are not a speciality of America alone. They are everywhere and a few of these flourished in Chandigarh too. Golden Forest erected show-piece properties to rope in the clever. Retired military men, unaccustomed to the wicked ways of the world, were roped in as “points-men”. That gave these companies a semblance of respectability and dependability. 

Friends got the assurance of safety and people fell over each other to hand in their hard-earned savings. Greed was the over-riding impulse. Inevitably, they all were “Madoffed.” 

Indian courts got into the act where promoters pleaded innocence. They spent a short period in prison and came out to enjoy this ill-gotten wealth. On the other hand, it is to Madoff’s credit that he made a clean breast when he told the court that “he was giving money to investors, which was not there.”  

http://www.tribuneindia.com/2009/20090304/edit.htm#5