Out of all the coverage of the Bernard Madoff fraud, the one headline that really puzzled me was the point in time when they were negotiating a house that the lawyers claim belonged to Madoff’s wife. It would seem to me that every asset the family owns came from the ponzi scheme, especially since the coupled was married for more than 50 years. However, the court ruled that Ruth (the wife) can keep the house when his husband destroyed so many people’s homes.
How is that fair?
Perhaps this is unfair as well, but the government should come up with a new set of rules to punish criminals who substantially affect someone else’s lives. In ancient China, any crimes against the emperor meant a severe punishment if you get caught. Not only will you be executed, but everyone related to you within nine relationships are all executed as well. So your family, friends, distant relatives, friends of friends are all dead. While it was inhumane, it definitely made people think twice before they act wrongfully.
Obviously, this is too extreme for something like a fraud, but we should adapt the idea and make minor tweaks. Ruth and his children may not know about the whole scheme (even though I doubt it), but they certainly enjoyed the years that the whole operation was going on. For years, they went to fancy parties, bought luxuries, went on extravagant vacations on someone else’s dime! Because of what happened, millions of people are left with nothing. How can the people closest to the fraud escape without much financial harm?
Unfair or not, the immediate family of the person who is directly involved in the fraud should be stripped of all financial assets. It might violate human rights, but that’s how it should work.
Allowing the family members to keep some assets may be a good negotiation tactic for Madoff to reveal where some of the money is, but it promotes bad behavior long term. Doing this give potential scam artists an idea of what the punishment will be if they get caught. If there’s really nothing to lose and everything to gain, people will keep trying shady tactics. If however, we set a precedence and be ruthless for once, we will might help billions of people in the future.
Don’t let them off so easily. Give them a severe punishment for the sake of the potential victims.
This is part of the Government Improvement Series on Fridays, where I discuss ways that the government can help improve our society.
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{ 9 comments… read them below or add one }
I couldn’t agree more!
It’s called democracy. I’m not guilty for anyone’s crimes buy my own. It’s not fair to hold the family responsible, unless you can prove involvement. Guilty by association isn’t good enough.
If someone is willing to sacrifice herself for someone else, couldn’t that person just steal and then give everything to another person and then turn him/herself in? In this case, shouldn’t the money be returned?
Nine relationships huh? I thought there was a website that claims everyone in the world is related within six. Does this mean that everyone (including the emperor) is doomed whenever someone tries something bad?
Joking aside though, I totally agree. We just need to let everyone know that fraud is a big “no-no” and that you will pay big if something goes wrong. Otherwise, we will always hear about these scams over and over and over again because there are always new and clever ways to be deceitful.
I’m with you on this – being that she was the closest person to him – she must have known about the ponzi scheme all along and every asset should be taken away. Unless, however, she worked herself and had a job – outside of her husband’s business then that would be different.
Wow, that it full of vitriol with a dash of vengeance. Yes, I see your point, but if you believe that there is innocence, whether his wife, or the investors, just remember that you can’t rely on somebody to watch out for your actions: it is up to you!
The laws in Australia make it very simple:
1. Put ALL of your personal (non-business) assets into your wife’s name … in the event of a divorce it makes NO difference how your assets are structured.
2. Put ALL of your business (non-personal) assets into a company name (e.g. equivalent of an LLC, S-, or C-corp) … that’s all that you can lose if your business/investments go broke
3. Sign as many personal guarantees (in YOUR name only) because you should have a ZERO net worth … no need to declare bankruptcy because nobody will bother you when they find out that there’s nothing to get and you then make a ‘generous’ offer to pay, say, 10 cents in the dollar.
Scummy, but it works
They had the best weasely lawyers and accountants money can buy– I am sure there are assets hidden everywhere . . .
People are being foreclosed upon because of his crimes and his family still live lives in the lap of luxury– disgusting!
Answer: It’s not fair, and the Maddoffs shouldn’t own anything at this point.