Money Crooks Beware

Yesterday in New York, a judge sentenced Bernie Madoff to the maximum penalty of 150 years in prison for his fraud and ponzi scheme that bilked investors out of some $65 Billion. The court heard testimony from nine investors - some of whom have lost their entire life savings from the case. While the size of this case is so incredible and may not be repeated, it is, unfortunately, probably not the last time this sort of thing will happen. It certainly isn't the first and reminded me of issues in our own industry.

Earlier I'd written about the case of Ed Okun. While a scheme like Madoff's gets all the press because of the size and severity of the case, Mr Okun was no less guilty of frauding investors - some, again, out of their lifelong savings. In a scheme designed to defraud clients out of millions of dollars through false pretenses, Okun started buying 1031 exchange companies and, over the course of two years, began raiding the client accounts. He used the money to buy more 1031 Qualified Intermediary companies to keep the ponzi scheme running as well as fund his lavish personal lifestyle. Mr Okun will be sentenced in August and faces up to 400 years in prison.

While the money is gone, at least the courts are finding the heart and determination to sentence these "white collar" criminals to the remainder of their lives in prison. It does nothing to bring back the life savings of the former clients from whom they stole but at least the crooks are paying for what they've done. Maybe, just maybe, it will stop a few future would-be criminals from making the same mistake. Perhaps too, it will bring further highlight to the fact that you need to know who you are dealing with and do your due diligence before allowing them access to your money.