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January 23, 2013 at 07:00 PM
Dec. 11, 2012 marked the four-year anniversary of when Bernard Madoff’s multi-billion dollar heist was exposed. Fortunes were shattered and lives were lost. Yet, mis-reporting about the facts of Charles Ponzi versus Bernard Madoff is still widespread.
Take Madoff’s extravagant investment scam, which is consistently mislabeled by the media. Calling the Immaculate Deception a “Ponzi Scheme” isn’t just bad reporting—it’s misleading. Ponzi’s victims lost around $225 million dollars in today’s money vs. around $18 billion or 80 times more in Madoff’s Scheme. See a difference?
While it’s true that Charles Ponzi was the originator of multi-level financial perversity, Madoff was the master. Therefore, classifying multi-billion dollar swindles as “Madoff schemes,” and not something less, is good for humanity as well as journalism.
Here are other overlooked but major dissimilarities between Charles Ponzi and Bernard Madoff:
Madoff was an insider; Ponzi was not. As ex-c hairman of the NASDAQ and the CEO of top market making businesses at the time, Madoff was the ultimate Wall Street insider. This is a major contrast from Ponzi, who failed in his many attempts to become an insider.
Madoff was private about his scam; Ponzi was not. Whenever asked about his investment strategy, Madoff rebuffed inquiries saying his methods were “proprietary.” In contrast, Ponzi was very public about his scam and even bought newspaper ads promoting it. There were even times when Ponzi arrived at his Boston office with crowds greeting him like a rock star!
Madoff targeted wealthy individuals; Ponzi did not. Madoff was private about his scam, preferring to target high net worth people and institutions and to use word of mouth via a tight network of financial intermediaries to gather money. In contrast, Ponzi took money from average people and just about anyone willing to give him a chance.
Madoff promised steady returns; Ponzi promised the sky. Charles Ponzi promised clients a 50% profit within 45 days, or 100% profit within 90 days. On the other hand, Madoff promised modest but steady returns through up and down markets.
