White Collar Crime: Ponzi Scheme with a Focus on Bernard Madoff

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Submitted By marizee0419
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White Collar Crime:
Ponzi Scheme with a Focus on Bernard Madoff
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White Collar Crime:
Ponzi Scheme with a Focus on Bernard Madoff Most people, when they hear the word “crime,” think about street crime or violent crime such as murder, rape, theft, or drugs. However, there is another type of crime that has cost people their life savings, investors’ billions of dollars, and has had significant impacts of multiple lives; it is called white collar crime. The Federal Bureau of Investigation defines white collar crime as illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence. Individuals and organizations commit these acts to obtain money, property, or services; to avoid the payment or loss of money or services; or to secure personal or business advantage (as cited in Barnett, n.d., para. 3).
White collar crimes consists of such things as embezzlement, bank fraud, forgery, insider trading and investment schemes. This paper is going to focus on a Ponzi scheme, a type of investment scheme, and Bernard Madoff. Madoff is probably one of the most known offenders when it comes to the Ponzi scheme.
The U.S. Securities and Exchange Commission (SEC) defines a Ponzi scheme as “an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors” (U.S. Securities, n.d.). In another words, a person gains the trust of people and asks them to invest money into opportunities that this person claims will produce high profits, usually in a short time, with little to no threat of losing. The money is never really invested but it is used to pay dividends. Once these people start seeing a return on their money, they help in finding other people to invest. Newer “invested” money is used to pay…...

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