Bernard Madoff may have pulled off the largest fraud ever by an individual. Among those taken for a ride are several of the top banking institutions in Europe, Asia and the United States.
How could so many people "in the know", get caught in an old fashioned Ponzi scheme? The answer is both simple and complex. Each scheme has it's own intricacies and structures, however, the breakdowns in checks and balances are the common thread, along with the hubris and bravado of the perpetrators.
In the early 1990s, Robert Maxwell, founder of several newspapers in the United Kingdom, amassed a publishing empire, but ultimately fell victim to the insatiable need to feed on too much debt. He set up an elaborate international web of companies to dupe the bankers and regulators, but not without the help of cooperating professionals with huge conflicts of interest.
The attached article was published earlier this year by the California Society of CPAs in their monthly publication, The CPA Report. The comments summarize findings after a fourteen year forensic investigation that followed the meltdown. The trends of the Maxwell fraud will certainly be evident in the Madoff scam.
'Bouncing Czech' Lessons Learned from Robert Maxwell...
