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In 1959 while attending Hofstra College Bernie Madoff made a series of decisions that shaped the rest of his

life and would lead him on his path to federal prison. The first decision that he made was that for him to become rich he would need to follow in his parents footsteps and become a stockbroker. His second very important decision was to marry his girlfriend, Ruth daughter of Saul Alpern who ran an accounting firm in midtown Manhattan. This relationship would soon become very beneficial to Bernie. His most important decision was to register his firm of Bernard L. Madoff Investment Securities. With assets of $200 and no liabilities Bernie was ready to begin his path to riches. Starting out with penny stocks, Bernie impressed his father in law with his hard working ways and was rewarded with a 50,000 dollar loan to invest. Because of his hard working ways and good relationship with his father in law Bernie began to meet many people. One of these new persons he would meet was Carl Shapiro an owner of a successful womens apparel company. Shapiro was so impressed with Bernies ability to complete trades in 3 days while other stockbrokers took 3 weeks that he gave him $100,000 to invest on his behalf. Years later this relationship would cause Shapiro to forfeit over 600 million dollars because of profits that he gained by being an early investor of Bernie Madoff. With the fees that Bernie earned from investing Halperns and Shapiros funds Bernie was able to subsidize his firm. Bernie wanted to increase his business and offered to pay his father in law for each new client he referred to him. At this time Bernie had surpassed the SEC rule requiring investment advisers with less than 15 clients. Bernie ignored this requirement and joined the ranks of illegal unlicensed advisors who along with his parents had escaped the scrutiny of regulators. By 1962 Bernie is overwhelmed and is obvious to see that he is aware that he is breaking the law. He asks his father in law to collect money from investors and to give him the total so as to appear as one account. Soon after the accounting firm of his father in laws unofficially merged with his securities firm. Bernie continued to grow and meet new people but his main key of success was the efficiency and speed of his trading operations. Bernie was one of the first to recognize the importance of computers could play in the industry and recruited his brother Peter to computerize his operations. By doing this Bernie attracted more clients and earn more fees especially his one or two cent commissions for each share invested with his company. Eventually because of his success Bernie and some others were encouraged to create a third market for companies not listed on the other 2 big exchanges. NASDAQ was soon born and Bernie was one of the first to join. Some litigators believed that Bernie had begun his Ponzi scheme much earlier than 1991 because of the high amounts of returns that Bernie would offer. Even in 1960 Saul Alpern would tell his friends that Bernie could get them 18 percent on their investment. Bernie would continue to attract investors but he soon would begin to attract unwanted attention on his dealings. In 1992 due to his partnership with his father in laws accounting firm who had retired and sold it to his employees who renamed it Avellino & Bienes. A&B were in the process of recruiting a customer and shared some marketing materials with them. A competitor investigated and soon

found out that they were unregistered and reported them to the SEC. Bernie admitted to knowing the company but had not been aware the company was unlicensed. Even though the company was fined and forced to return money from investors they shielded Bernie from the SEC and he was allowed to continue his fraudulent way. Bernie continued to attract unwanted attention from people who were certain he was running a Ponzi scheme and even though it was reported to the authorities there never was an investigation of his business dealings. It finally came to end when Bernie could not fulfill his investors requests for their money and Bernie finally came to the attention of the authorities. At this time Bernie Madoff is currently serving 150 years in a federal prison. Nathan Vardi, Forbes.com 12/07/10 Denis Collins http://dcollins.faculty.edgewood.edu Diana B Henriques http://www.nytimes.com/2008/12/20/ On October 4 2010, Vincent Singh was charged with a 24 count indictment alleging wire fraud, false statements in bankruptcy and bankruptcy bribery. Singh allegedly targeted members of the ethnic Indian Fijian community that netted him over 20 million dollars. Singh told his investors that he was using the money for hard money lending but was actually using for gambling, a film project and paid earlier victims saying that the payments were profits from the money lending business. Singh also diverted more than 2 million to personal bank accounts. If convicted, Singh faces a maximum penalty of 20 years in prison for each count of wire fraud. http://www.fbi.gov/sacramento/press-releases/2012

Charles Ponzi was an Italian immigrant whose name is now synonymous with fraud that engineered a scheme that promised to bring incredible profits for those who invested. Ponzi first started his plot by establishing the Securities Exchange Company. With the company giving him an air of respectability Ponzi promised investors that by buying international reply coupons and exchanging them in the United States for postage stamps they could make lots of money. With the lure of riches Ponzi had a steady flow of customers which allowed him to pay earlier investors and keep millions for himself. But soon enough the scheme collapsed and investors lost an estimated 20 million dollars.

Samantha Grossman Wednesday, Mar. 07, 2012 http://www.time.com