Bernie Madoff – The Man Who Had No Shame

 

Charles Ponzi 1882-1949

Charles Ponzi, who originated the Ponzi scheme stepped off a boat, as an Italian immigrant with $2.50 in his pocket in 1903. He moved to Canada in 1907 and was arrested, for writing himself a $423.58 check, from a checkbook he had found. He didn’t want his mother to know he was in prison, so wrote her telling her he was a special assistant to the warden.

Without going into the details, Ponzi’s investors lost $20 billion in 1920 dollars, but $225 million in 2011 dollars. This is just a little background, on how Ponzi schemes started about 60 or 70 years, before Bernie Madoff set new records for bilking investors out of their money.

Bernie Madoff took Ponzi scheme to a whole new level.

Bernie Madoff was born in Queens, New York on April 29, 1938. His Bernard L. Madoff Investment Securities company was started in 1960. He was influenced by his father Ralph Madoff, who had been a plumber/stock broker and Bernie decided to enter the investment securities business.

Bernie Madoff in high school

It was only a matter of time, before Madoff saw that he could make huge sums of money, by investing funds of his investors in his own account. He promised investors high interest rates, in return for their investments. Once a Ponzi scheme starts there has to be a steady stream of new investors, so the money of the new investors can be used, to make regular payments to the early investors.

Investors thought Madoff was reliable, since he was one of the first brokers, to join Nasdaq and even became a Nasdaq official. Madoff was secretive, about his “investment” and using the word investment in the loosest sense of the word. His 17th floor office in the Lipstick Building had signs telling people Do Not Enter and Do Not Clean. He knew the papers in that office could end his Ponzi scheme. His own secretary for 8 years didn’t even know he was running an investment firm.

SEC Warned About Madoff

Harry Markopolos a hedge fund manager got his hands on some of Madoff’s paperwork and it only took him four hours, to figure out that Madoff’s investments were a fraud. Another red flag for Markopolos was that Madoff’s investments were only down 3 months in a 87 month span, while Standard and Poor’s results showed 28 months of being down in that same 87 month span.

Harry Markopolos warned SEC about Madoff 8 years before arrest.

Markopolos filed an eight page complaint about Madoff in 2000 with the Securities and Exchange Commission. The SEC ostensibly, because of work overload declined to investigate the complaint, which left Madoff with no roadblocks in his way, so he continued to bilk his investors.

I can imagine the way Markopolos felt after the SEC decided not to pursue an investigation. It was in effect giving Madoff a license, to steal for another 8 years, as corporations and individual investors poured millions more into Madoff’s pockets.

Bernie Madoff’s Penthouse apartment bought by Al Kahn (left inset photo) of Time Warner

While Madoff’s investors were watching their investments grow on paper at least he was living, in a $7.4 million penthouse which was very much real. The apartment gave Madoff time to ponder, on how he was bilking thousands of investors out of their life savings, and didn’t even know it was happening. The worst thing is that Madoff didn’t really care. His only concern was that his financial chicanery would be exposed.

Zsa Zsa Gabor lost $10 million after investing with Madoff.

This is a 162 page list of the Madoff clients in PDF format. It only lists the names and not the amount they lost in the Ponzi scheme.

http://online.wsj.com/public/resources/documents/madoffclientlist020409.pdf

Madoff’s world came crashing down at 8:30 AM on December 11,2008, when he was arrested. He was indicted on March 10,2009, and was sentenced to 150 years in prison on July 29,2009. He will be released on November 14, 2139, if he doesn’t have any bad behavior while in prison. He will be approximately 200 years old, when he is released in 2139.

Aftermath

Madoff is imprisoned in a federal prison in Butner, North Carolina.

Bernie Madoff’s new home at federal prison in Butner, North Carolina featuring 3 hots and a cot

He says he is being well treated in prison in this Wikpedia entry:

In his letter to his daughter-in-law, Madoff said that he was being treated in prison like a “Mafia don“.

They call me either Uncle Bernie or Mr. Madoff. I can’t walk anywhere without someone shouting their greetings and encouragement, to keep my spirit up. It’s really quite sweet, how concerned everyone is about my well-being, including the staff … It’s much safer here than walking the streets of New York.

However this entry tells an entire different story of his life in prison:

Madoff’s projected release date is November 14, 2139.[115][114] The release date, described as “academic” in Madoff’s case because he would have to live to the age of 201, reflects a reduction for good behavior.[116] On October 13, 2009, it was reported that Madoff experienced his first prison yard fight with another senior citizen inmate.[117] When he began his sentence, Madoff’s stress levels were so severe that he broke out in hives and other skin maladies soon after.[118]

On December 18, 2009, Madoff was moved to Duke University Medical Center in Durham, North Carolina, and was treated for several facial injuries. A former inmate later claimed that the injuries were received during an alleged altercation with another inmate.[119] Other news reports described Madoff’s injuries as more serious and including “facial fractures, broken ribs, and a collapsed lung”.[118][120] The Federal Bureau of Prisons said Madoff signed an affidavit on December 24, 2009, which indicated that he had not been assaulted and that he had been admitted to the hospital for hypertension.[121]

Ironically, his son Mark was found dead in his apartment on December 11, 2010, which was second anniversary of Bernie Madoff being arrested. Coroner ruled it was death by hanging. His other son Andrew died of lymphoma on September 3, 2014. 

Ruth Madoff taking out garbage since Bernie is predisposed

His wife Ruth was ordered to give up $85 million in assets, which left her $2.5 million. 

However, I can’t feel sorry for her knowing, that so many Madoff clients literally lost everything. A lot of wealthy people thinking they were becoming more wealthy, as they looked at the phony financial statements sent by Madoff ended up having to pay any money they received in the Ponzi scheme, above their original investment. The saddest stories were those of investors, who had invested their life savings only to lose everything. 

It was astounding that so many charitable organizations invested with Madoff and lost everything. 

One investor took his life after losing $1.5 billion, by investing in Madoff:

A more extreme loss is the loss of life. Thierry de la Villehuchet, the French aristocrat who refused to believe Casey or Markopolos’ theory that Bernie operated a Ponzi scheme, lost $1.5 billion. This included his personal fortune along with substantial funds from European royalty and aristocrats. On December 22, 2008, unable to pay his 28 employees or office rent, Villehuchet committed suicide in his downtown Manhattan office.

Madoff is not doing well healthwise, with him telling CNBC, that he now has kidney cancer and had a heart attack in December of 2013. 

Sadly, Madoff’s Ponzi scheme will not be the last one. I am sure right now somebody is bilking investors out of their money, but their day will come like all the others, when investors demanded their investments back and the money is long gone.

This article below gives many more details, of how Madoff cheated so many investors, in his elaborate Ponzi scheme:

http://dcollins.faculty.edgewood.edu/pdfdocuments/Madoff%20Case.pdf

Conclusion; Mr. Madoff have you no shame? How could you function as a human being all those years, while knowing that you were using the life savings of your investors, to pad your own bank account, to buy yachts, mansions, $7.4 million apartments and too many other luxuries to list them all?

Advertisements

Magazine Ads From the Past

These ads will bring a lot of memories to the old-timers among us and will let the younger generation know about the days, when you could buy a Coca-Cola for 5 cents and a pack of gum for 5 cents.

Smokesational! Radiolutionary! Smokerette-Radio by Stewart Warner: The only combination smoker and radio set. Magazine Ad, later 1940’s
A combination radio-smoker which provided smokers with a place for their cigarettes, cigars, pipes and tobacco, while listening to their favorite radio programs on this $49.95 radio.
This is the precursor of the Sony Walkman for only $7.95, before shipping and federal tax.

 

A one pound bag of Bazooka Bubble Gum will set you back $7.99 today after inflation kicked in.

 

 

You could look up and down every aisle of every grocery store in the United States today and not find these prices. Two boxes of Wheaties probably cost at least 25 cents nowadays and two pounds of coffee has probably doubled to 50 cents.

 

Barber shop prices of the 1900’s on the left. No date given for the prices on the right.

 

Barber shop prices over a 100 years later. The shave and a haircut of the 1900’s cost a total of 60 cents. That same shave and haircut today costs $33.00.

 

Memories of a Lifetime: 2011-2013

2011 – We were living in Sulphur, Louisiana, a city of about 20,000 at the start of 2011. We were living on Live Oak Street in Sulphur and we found a home church in Calvary Baptist Church on Lewis Street. We were impressed by the pastor Rev. W.D. Darnell, who lived what he preached and only used the King James Version of the Holy Bible. We made many friends, among the members of the church. Rhonda was very involved with the activities at the church and I often sang special music on Sunday and Wednesday nights. Rhonda and me sang duets a couple of times and she sang On The Wings Of A Dove with another lady one time.

Rhonda liked living in Sulphur, since she had a sister and her mom living there. We lived close to the neighborhood, where my daughter and family had lived before moving to Groves, Texas.

I would return to working as a caregiver again in November of 2011. I worked with a disabled man with diabetes and lost the job at the end of the year, when his family changed to another caregiving company.

An international news story was when an earthquake and resulting tsunami in Japan took 15,840 lives.

President Obama announces the death of Osama bin Laden on May 1.

Casey Anthony was acquitted of the murder of her daughter Calee Marie Anthony, in a controversial verdict by the jury.

Steve Jobs, the co-founder of Apple Computers dies on October 5 of cancer.

House were renting at $955 a month in 2011.

A gallon of gas cost $2.89.

Movie tickets were selling for $8.20.

 

2012 – I worked as a crossing guard at a school in Sulphur for a few weeks, toward the end of the school year. It was interesting work and enjoyed the job. The job could turn out to be the last job I will ever work, since I haven’t worked since becoming sick a couple of months later.

We moved to DeRidder, Louisiana in July and are living in a trailer, that is about halfway between Merryville, Louisiana and DeRidder. We are living in the country and liking it so far.

Knew something was wrong when I began vomiting up blood and lost about 35 pounds in less than two months during the summer. Found out in October in Houston VA Hospital, that I had duodenal cancer. It was a very disease to diagnose, since it mimics acid reflux and duodenal ulcers. It is very rare disease with only two percent of gastrointestinal diseases being duodenal cancer.

Surgeons in Houston performed a resection surgery on Oct. 16 to remove a blockage, which was cancerous and was successful. However I found out in November, that duodenal cancer has a history of returning and has a relatively low survival rate.

Chemotherapy started at the VA hospital in Pineville, Louisiana on Dec.13 and have had three chemo IV’s since that date, with five more to go. Have finished six of a 24 week program of chemotherapy. It seems like the side effects have been worse with each chemo IV. Had difficulty walking in a straight line after the last IV and sort of lurch from side to side.

2012 was a life changing year for us, with us being evicted, moving to a new city and finding out that I had cancer and had surgery a few days later. Spent a total of 32 days in hospital in Houston.

July 20 would be the first of two mass shootings in the United States, when a gunman killed 12 and injured 58 in an Aurora, Colorado theater.

December 14 would bring the second mass shootings of 2012, when a man kills 20 children at the Sandy Hook Elementary School in Newtown, Connecticut, along with six adults, before killing himself.

A gallon of gas would rise to $3.89 during 2012. It is about 64 cents a gallon cheaper now in 2013.

House rent average goes over the $1,000 mark for the first time, as it rose to $1,045 a month.

A pound of bacon which was $2.96 in 2008 had risen to $4.48 in 2012.

 

2013 – This year should be a very interesting year, as the chemotherapy continues through May and it will be interesting to learn the results of the bloodwork after the last week of chemotherapy. May 21 will be another important date for us as we return to Houston for another C-scan, which will show if the cancer is completely gone or has returned.

We don’t know what this year holds, but we plan to remain positive, even if the news is bad and I don’t plan on being negative, regardless of what happens in 2013.

 

 

 

 

 

 

Memories of a Lifetime: 2001-2005

Grandson Mark Geisel who was born one day after my birthday.

 

2001 – Mark Geisel was born on October 15, 2001 in Sulphur, Louisiana, while his father was the manager at the Domino’s Pizza place in Sulphur.  Mark has done very well in school and loves to read. He plays goalie and other positions on his soccer team. His red hair goes back a long way in family history. My mom had a red-headed brother, that was born in the 1920’s or 1930’s. My mom had two red-headed sons and a red-headed daughter and a daughter with auburn hair. I was the black sheep of the family with black hair.

We moved to Gibbons Street about this time and then moved to Linda Drive later that year in the Kingsville area.

September 11, 2001 – A day that will live in infamy.

 

September 11, 2001 was a day that none of us will forget. I had called the mechanic that morning checking on our car in his shop. He asked me if I had the television on and that is when I found out about the horrific events of that day. The memory of those planes slamming into the twin towers of the World Trade Center will forever be ingrained in my memory.

I couldn’t comprehend how four planes could be hijacked the same morning and that day let us know how lax our airport security was at the time. The nation was in chaos at the time, with aircraft being grounded all over the country. It was eerie hearing about passengers on these planes talking to loved ones, on their cell phones telling, about the horrors of what they were experiencing and then knowing those same people on the cell phones died a violent death minutes later.

It is difficult to believe that September 11 of this year will be the 12th anniversary of that horrific day.

The “War on Terrorism” begins with the invasion of Afghanistan.

Dale Earnhardt dies during a crash in the last lap of the Daytona 500.

Richard Reid known as the “shoe bomber” attempted to blow up an American Airlines plane.

The first iPod was released and Wikipedia was launched on the internet.

The average rent jumped $40 from $675 in 2000 to $715 in 2001. The price of a gallon of gas jumped from $1.26 in 2000 to $1.41 in 2001. A loaf of bread cost $1.82.

2002 – My favorite memory of this year was the 40th class reunion of Pineville High School. I had never attended a reunion until 2002. If I was scheduled to work on the day of reunion, then I would usually work, but this year I made sure I had that week off, so I could attend. It was great seeing classmates from the 1962 class, for the first time in many years. I hadn’t run into some of them even though they had never left Pineville. The saddest part of the reunion was when the members of our class that had passed on were mentioned in a Power Point presentation, with Duane Yates singing the Lord’s Prayer in the background. Sadly Duane died before our 50th reunion in 2012. Seeing the teachers and students from 1962 again made this a special time in my life.

The price of gasoline escalated to $1.61 a gallon, a 36 cent a gallon rise since the $1.26 gasoline of 2000, which was two years earlier.

 

2003 – This turned out to be the last full year that I worked at the Alexandria Town Talk newspaper. The paper was never the same, after it was acquired by the Gannett Corporation. The Christmas bonus we had received while the paper was owned by the Smith family and the Central Newspapers chain was the first thing to go, under the auspices of the Gannett mega corporation. That $150 we had received each Christmas was now a thing of the past, as was the free newspapers for employees.

Iraq is invaded on March 19 by the United States military.

Saddam Hussein is captured by the U.S. 4th Infantry Division.

Gasoline prices jumped to 1.83, a jump of 57 cents a gallon since 2000.

 

2004 – My 36 years at Town Talk and 38 years in newspaper production ended in 2004, when I retired with my last day of work being Halloween night. I spent most of my working life at Town Talk. In fact it was my first job after returning from Vietnam in 1966. I had seen my pay go from $1.40 an hour in 1966 to $13.50 an hour in 2004. Still I never took home more than $28,000 in any year, that I worked for the Town Talk.

We had a traumatic event  this year when my stepson Justin was sleeping in the den and was woken by a burglar, who was rifling through cabinets and drawers, while looking for painkillers. Neither Justin or the burglar knew anyone else was in the house. Thankfully, Justin thought the burglar was a relative, who told Justin he was taking stuff because his mom owed him money.

A few days before the burglary a man had knocked on our door and wanted to know if anyone lived in the trailer next door. Evidently, he was casing the house and had a timeline of when my wife Rhonda and me would be at work. Anyway he had left, about 30 minutes before I arrived home from work that night.

Justin followed him from room to room and the burglar told him to tell his mom, that he would return the next night. The burglar did have an encounter with our cat, when the cat bit him and the burglar said “ouch”. The burglar would be later caught due to his own stupidity. He overdosed and the paramedics noticed painkillers all over his trailer, which included some painkillers my wife had in our house, after having major surgery. He lived only about five houses up the street from us and was arrested for burglary and sent to prison.

Facebook was launched in 2004 and was originally only for students at Harvard University.

Strongest earthquake in 40 years hits near Indonesia and the earthquake and resulting tsunami would take 290,000 lives.

Martha Stewart is convicted of felony and sentenced to five years in prison.

Gasoline continued to skyrocket to $2.10 an increase of 84 cents a gallon from the year 2000. Oil peaked at $50 a barrel in 2004.

 

2005 – I returned to work in 2005, when I was hired as a caregiver by Louisiana Community Care in Ball, Louisiana. Sometimes I would start a shift at 8PM and would finish the shift at 8:30 AM the next morning. It wasn’t hard work, but it was detail work, that required a set schedule of administering medicine. I found out later in Tennessee, that anyone administering medicine in Tennessee was required to take a course and pass a test to give meds to a client. However, Louisiana required no certification to give meds. I was giving meds my first night. There was a voluntary meds certification, but it wasn’t required at this time.

Later that year I went to work for Plasti-Pak in Kingsville area and I learned how much work is involved with factory work. I operated a box making machine for Procter and Gamble products the first night there. We went to work at 6:45 PM and the shift would end at 7:15 the next morning, so we would get a full 12 hours per shift, with a half hour break to eat. It was tiring and exhausting work and dangerous work. I back over my foot with a hand truck, which resulted in losing two toenails. I bought steel-toed boots the next day. It was a temp job with Westaff and the job played out soon and I was one of first laid off, since I was one of the last ones hired.

Then I went to work for Coastal Culvert operating out of Eunice, Louisiana. It was the easiest job of my life, after working the hardest job of my life at Plasti-Pak. My job was to be the manager of a new Alexandria branch for the company. My main job was to check inventory of the culvert pipes outside the office. I had to call the Eunice office each morning, to verify I was at work. Then I would read the paper, listen to old-time radio shows or watch Andy Griffith shows on the DVD player till it was time to go home that afternoon. The job lasted from November till February of 2006, before they decided to close down the Alexandria office, since there was little to no business.

I can’t say enough good things about the Coastal Culvert executives. They invited me to their annual Christmas dinner and they gave me a $100 Christmas bonus, even though I had been there less than a month.

Some of the damage from Hurricane Katrina seen the day after.

The major event of 2005 in Louisiana is when Hurricane Katrina hit the southern coast of Louisiana and a break in the levee resulted in 80 percent of New Orleans being flooded. 1,577 died from Katrina in Louisiana. Many New Orleans residents waited five days for food and  water to arrive in the city. It was a colossal case of bad planning by government officials, who let people go for days without food or water.

Katrina didn’t cause much damage in Alexandria-Pineville area, but Hurricane Rita was a different story as many trees fell on houses in the area, with fallen trees closing roads.

Lance Armstrong won an amazing seventh Tour de France championship, as he demonstrated how he could live better through chemistry.

Video gamers saw the Microsoft X-Box 360 launched in 2005.

The price of gasoline climbed to $3.18 in 2005 an increase of almost $2 a gallon from the $1.26 price of 2000.

 

 

 

 

Stuckey’s: Roadside Landmark in America

Stuckey’s was a place where you could fill up with gasoline, go to restrooms and shop for souvenirs and the famous Stuckey’s pecan candy.

There was their famous pecan log rolls, pecan divinity and of course pecan pralines. I have to debate with myself whether my favorite was the divinity fudge or the pralines.

First Stuckey’s Physical Building Opened in 1937

The first Stuckey’s building was opened in 1937 and expanded into 350 stores. Stuckey’s merged with Pet Milk in 1967 and the 350 stores dwindled into 75, during the Pet Milk operation of the company. Most of the Stuckey’s stores sold Texaco gasoline back then.

William S. Stuckey Sr., got the idea for the company when he had a bumper crop of pecans in 1930. His wife went to work in the kitchen and experimented with different candy recipes, which were the main drawing card for Stuckey’s, when they opened their first physical store in 1937.

After the fortunes of the company declined during the Pet Milk ownership period, the son of Stuckey, who was U.S. congressman William S. Stuckey restored the Stuckey’s name by purchasing the company and there are now 115 Stuckey’s in the United States at the present time.

Stuckey’s are found as far north today as Connecticut, but surprisingly there are no stores in either New Jersey or New York. Most of the stores are concentrated in the southern states, but there are stores in Illinois, Pennsylvania and Indiana.

Stores are only located in 17 of the 50 states. I was surprised recently to see a Stuckey’s returning on a trip to Houston and the store sold gasoline, souvenirs and had a Popeye’s Fried Chicken place inside the store. There are nine Stuckey’s located in Texas, but the only Stuckey’s in Louisiana according to their website is a store in Opelousas.

It was exciting to see signs for Stuckey’s, since we knew we could get off the road for a while, while we browsed the souvenir shop and found candy to munch on as we continued on down the highway. It is great to know the company still exists 56 years after our 1957 trip from Louisiana to our eventual destination of Maine to visit my uncle and aunt and their family.

Stuckey’s has had its ups and downs since the first store was opened in 1937, but it is good to know, that the company is thriving again, now that the Stuckey family once again own the stores. We want to thank them for restoring our memories of that 1957 trip, when Stuckey’s were a mainstay on the U.S. highway system.

Typical Day In Small Town America 60 Years Ago

This ten minute video shows what life was like in small town America in 1952. It is sickening to read the comments made by those who viewed this video. They turn what was a special time to those of us, who grew up in the 50’s, into a platform for hatred of races.

Even the ugly remarks can’t ruin a video that brings so many fond memories  of the past.

I was eight years old when this video was filmed so can identify with what happened during a typical day 60 years ago.

It was a simpler time, before cell phones, I-pods, laptop computers and HD television sets. The television sets back then still had the huge tubes, that made them so bulky, unlike the lightweight television sets of today.

Growing up in the 1950’s was a special time and this video captures the feeling from having grown up in that era.

Gasoline Price Wars: Now Ancient History

With the price at 24 cents, a driver could purchase 10 gallons of gas for a total of $2.40, which is about a dollar less than it costs today for one gallon. 15 gallons at 24 cents a gallon cost $3.60, which is close to the price of gas today for one gallon in some locations.
Using  $3.50 a gallon as a benchmark price today, 10 gallons would cost $35 today  instead of the $2.40 during that gasoline price war in 1969. 15 gallons would cost $52.50 today compared to the $3.60 price during the 1969 price war.
Drivers today are paying about $49 more per 15 gallons than the $3.60 price of 1969.
The American people are being held hostage by high gasoline prices. Drivers who drive 25-30 miles to work one way today are seeing a lot of their income eaten up, by high gasoline prices. For instance a driver who drives 60 miles a day to and from work, who uses 20 gallons a week, would spend close to $65 a week for gasoline, while driving 300 miles.
That is a total of  $260 a month spent on gasoline. The politicians in Washington don’t seem to care about gasoline prices, since senators and congressmen earn $174,000 a year in 2011.
So while our lawmakers more or less ignore the high gasoline prices, the middle class is paying more at the pump each year as gasoline prices continue to rise, with no relief in sight.