Editor’s Note: Duh! Has no one figured out the name of this guy yet? Bank-man-fried? The actions of this guy will/are sparking the destruction of our current economic system. Of course he will be lauded and protected by those whose aim is to destroy our world. Yet…the current world must be destroyed allowing our world to morph and leave polarity/duality, leaving all to BE in…
On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.
Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.
But how much weight does the comparison deserve — particularly as a guide to how prosecutors ought to be handling the case? Unfortunately for those seeking immediate action by the Department of Justice, while the juxtaposition — between the swiftness of Madoff’s arrest and the fact that SBF is apparently enjoying life in the Bahamas — is superficially compelling, it does not withstand more than a few minutes’ worth of scrutiny. In fact, these claims run the serious risk of misleading the many people, including victims, who are understandably angry about what may have been a gigantic fraud. Those who are eager to see Bankman-Fried charged with serious financial crimes will just have to be patient.
Let’s start with the actual circumstances of Madoff’s arrest. The scheme was not detected by the government or the media — infamously — but was in fact revealed by Madoff himself, who confessed the whole thing to his sons once he realized that he could not keep up the fraud. According to the criminal complaint filed on the day of his arrest, Madoff told his sons “that he was ‘finished,’ that he had ‘absolutely nothing,’ that ‘it’s all just one big lie,’ and that it was ‘basically a giant Ponzi scheme.’” His sons called the FBI, and two days later, two agents showed up at his home and asked whether “there’s an innocent explanation” for what Madoff had told his sons. Madoff literally replied, “There is no innocent explanation.”
At the risk of stating the obvious, the reason Madoff was arrested so quickly is because he confessed to every element of criminal fraud — including both the underlying scheme and his criminal intent. This meant that the FBI had both that confession and highly potent, admissible evidence of guilt in the form of testimony from his adult children (who had no apparent axe to grind).
If that is all the government ever had, they would have been able to convict Madoff easily at trial. (He eventually pled guilty.) They also needed to make sure that Madoff did not have second thoughts — he told his sons that he planned to turn himself in to authorities in about a week — and that he would not attempt to flee the country instead.
We have not seen anything like a real admission of criminal conduct from SBF yet and, of course, he is not in the country at the moment, so there is no imperative (no ability, really) to keep him in the United States. As important, SBF has been rather talkative in interviews — including in an interview with New York’s Jen Wieczner that was published yesterday — but he has been careful as well. So far as I can tell, he has held firm on a central point for his defense — that the epic, still-unspooling fiasco at FTX was the result of sloppiness and inadvertent missteps by the company’s leadership rather than an intentional effort to mislead FTX customers or investors.