New York, NYWhen it comes to securities fraud, there may be no more infamous case than that of Bernard Madoff, who reportedly perpetrated the biggest securities investment fraud in history. Now, two more people who were allegedly involved in Bernard Madoff's securities fraud have been indicted on fraud and conspiracy charges. Some of Madoff's victims, however, wonder if there are more people who should also face securities fraud litigation.
Although it has been two years since Bernard Madoff was arrested for his multi-billion dollar scheme, federal prosecutors continue to investigate former Madoff employees for their role in Madoff's illegal activities. The most recently arrested employees are alleged to have knowingly participated in Madoff's Ponzi scheme, including executing false trades in accounts.
Federal prosecutors allege that the accused, Annette Bongiorno and JoAnn Crupi, made millions of dollars from the Ponzi scheme. They have been charged with conspiracy, securities fraud and falsifying records.
Lawyers for both the accused denied the charges; however, other Madoff employees who faced charges related to the securities fraud have pleaded guilty.
According to The New York Times (11/18/10), eight people have now been charged related to Madoff's Ponzi scheme, which ultimately resulted in Madoff being ordered to serve 150 years in prison for his activities.
Although Madoff's victims were reportedly happy to hear about the new indictments, some wondered if Madoff's family knew what was going on, too. None of Madoff's family members, including his wife and sons, have been criminally charged with involvement in the Ponzi scheme, even though some family members worked with Madoff. His wife, for example, reportedly once worked as his bookkeeper.
ABC News (11/19/10) reports investors who lost millions of dollars are asking how Madoff's wife can still have $2 million when there are victims who lost everything to Madoff. Federal authorities are reportedly investigating some of Madoff's family members for possible tax fraud, but no charges have been filed so far.
Irving Picard, who is acting as trustee for Madoff's victims, however, has filed civil lawsuits against various family members. According to papers filed by Picard, Madoff family members used approximately $200 million of investor cash to fund their lavish lifestyles.
Ruth Madoff, Bernard Madoff's wife, denies any knowledge of his illegal activities.
Ponzi schemes are illegal schemes in which money obtained from new investors, rather than money from actual profit, is used to pay out previous investors. New investors are enticed by promises of either very high or consistent short-term returns. The Ponzi scheme collapses when new investors fail to materialize or when a large group of investors tries to cash in at the same time.
Bernard Madoff's Ponzi scheme is reportedly the largest financial investor fraud ever perpetrated by a single person, with approximately $21 billion in losses incurred by Madoff's investors.
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