Author: Sonja Dumas
In an earlier Caribbean Innovation article, we compared the transparent Sou-Sou tradition and the not-so-transparent pyramid scheme, and their value as savings or earnings clubs. The traditional Sou-Sou was the big winner. But there’s another scheme that’s even more insidious than the pyramid. While “P” stands for “Pyramid”, it can also stand for “Ponzi”. Sit back and relax, and let me tell/remind you about the man deemed to be the most (in)famous ponzi artist of our time.
Name as Destiny
There are some people whose names seem to illustrate their achievements – like Usain Bolt, who literally burnt up the 100- and 200-metre and 4×100-metre categories in three consecutive Olympic games, or Alexander Graham Bell who (*ring-ring*) is credited with giving the world its first consumer-oriented telephone. Bernard (“Bernie”) Madoff is another. He “made off” with plenty people money in a big, big way.
Bernie’s Twisted Tale
Madoff convinced his investors (with many high-profile individuals and foundations in the mix), that their return on investment was as high as the sky. But the nasty little secret was that he wasn’t investing the money in anything but himself. For the most part, Madoff would prepare well manicured but fictitious dividend statements for investors, giving them a sense of comfort that their money was growing. He also paid out monies when investors wanted to withdraw their original investment. De mark buss, as they say, when the world economy crashed in 2008 and a disproportionately large number of people wanted their original investments back. The high-profile fraudster didn’t have enough money in the coffers to pay them back their own money. US$65 billion or so worth of misused client assets later, Madoff died in prison in April of 2021 at the age of 82, having served approximately 11 years of a 150-year sentence for massive fraud.
But we don’t have to look that far afield to find these schemes. Next week, we’ll look at an infamous ponzi scheme that’s much closer to us here in the Caribbean.
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