Essays on Ponzi Scheme of the Bernard L Madoff Investment Securities LLC Assignment

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The paper "Ponzi Scheme of the Bernard L Madoff Investment Securities LLC" is a good example of a finance and accounting assignment.   Bernie Madoff, the owner of Investment Securities LLC, was arrested in December 2008 for operating the fraudulent investment called the Ponzi scheme which was considered the biggest fraudulent scheme in the history of the United States. The working of the Ponzi investment scheme involved the payments of returns to investors from other investor’ s money or their savings with the company. The scheme eventually collapsed because the number of investors was paid to surpass the actual earnings the company realized from the scheme (Kennedy, 2012). By the time the scandal was discovered the investor's account had totaled to approximately $67 billion.

Also, the assessment conducted indicated that the scheme had been in operation for almost 20 years without being noticed. Charges of federal felony directed to Bernie Madoff totaled to eleven and were summarized as money laundering, perjury and securities fraud. The crimes committed were termed as extraordinary evil, and he was sentenced to serve a 150-year jail term. Peter Madoff, a brother to Bernie Madoff, was also jailed for ten years following the significant role he played in the scandal.

Over 33 years, Peter Madoff served a chief compliance officer and a senior lawyer of the company, and it is upon this that he charged for failure to uncover the scandal long before it surfaced. Other individuals convicted alongside Bernie and Peter were David G. Friehling who served as the company’ s independent auditor and confirmed to have failed to audit the firm as required and that his independent of work was significantly compromised, and Frank DisPascali who was understood to be a longtime aide of Bernie Madoff and confessed to having extended a hand in the execution of the fraudulent scheme for almost 20 years (Kennedy, 2012. The scandal attracted over 1500 lawsuits, and by May 2010 at least $15.5 billion were settled by the different foreign financial institution.

Irving Picard was appointed by the court as a trustee to represent the victims in the United States who fall into the trap of the fraudulent scheme. At the start of the recovery mission, Picard was aiming $100 billion in damages, but it comes out that recovering the initial investment of $17.5 billion unattainable.

What followed was that the court ruled that the claims Picard raised against third parties and banks were void and thus the $20 billion sought out from UBS, HSBC and JP Morgan Chase will not be paid out. As we speak, approximately $9 billion was recovered out of which $340 million claims have been settled with the rest of the recovered amount waiting for court settlements of pending appeals.

Prominent victims of Ponzi scheme included but no limited to Eliot Spitzer Governor of New York whose real estate business plunged into trouble in the wake of the scandal due to its significant involvement, and Elie Weisel former Noble Peace Prize winner (Kennedy, 2012. Case 2: Former Tesco Directors Charged Over Accounting Scandal Information forwarded by the Serious Fraud Office (SFO) outlined significant accounting scandals at Tesco Company. The alleged fraudulent activity was believed to have occurred between the months of February and September 2014. The scandal involved former directors of the company who served different roles.

The alleged individuals included John Scouler; who served as a commercial director for food, Carl Rogberg who served as a finance director in the UK headquarter and Christopher Bush who served as the managing director in the UK headquarter. The three were convicted over fraud accounts that were attributed to abuse of individual power and position. Also, they were charged with accounts of false accounting done with the stipulated time of February and September 2014. In October 2014, SFO commenced a criminal investigation into the company’ s accounting practices following the admission made by the firm of profit overstatement by 263 million pounds following incorrect book payment it had to anticipate from its suppliers.

Following the uncovering of profit overstatement, the three directors were suspended by the company. Personal representatives of the alleged individual expressed their dissatisfactions following the suspension and vehemently contested against the raised allegations to prove their client’ s innocence over the matter. Despite pleading guilty the three directors are faced set to stand trials in September this year (2017) (Adibi, Aziz, & Nur).

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