Who Else Made Off With the Money? – 22 October 2013

When Bernie Madoff was sentenced to 150 years in jail for perpetrating one of the biggest frauds in history, he shocked the financial world even more when he claimed that he had acted completely alone.  However, US investigators are finally about to start a trial in the case of five former employees who are accused of being in on the Ponzi scheme he orchestrated.

The case, which is the product of five years of US government investigation, is expected to offer the first detailed look inside the Ponzi scheme that fleeced an estimated $17bn to $20bn from charities, financial firms, retirees and small investors worldwide.  However, lawyers for the five defendants argue that they were merely among the thousands of Madoff victims and that they thought they were just doing their jobs.

Interestingly, the district judge presiding over the case has barred evidence of the expensive homes, shopping sprees and other luxuries the defendants funded with the millions of dollars they collectively received from Madoff, saying that the prosecution’s attempts to portray them as “greedy or extravagant” could cloud the jury’s perception of them.  This is interesting from the point of view of investigative or forensic accounting, as looking into bank accounts and following purchase trails is how a list of assets and expenditure can be put together, either to shoot down lies or to paint a picture of the truth, if a defendant is being honest.

However, it is unsurprising that the case is only just coming to court some five years after the disgraced businessman was found guilty, as the forensic accounting work on both sides of the case will have been incredibly painstaking and thorough as both sets of lawyers attempt to prove their side of the story. 

Author: Roger Isaacs, 22 October 2013

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