Saturday, February 7, 2009

How to run an investment fraud the Madoff way

The NY Times posted an article this week entitled "How to Run a Financial Fraud" that outlined six steps to run an investment fraud (ala Bernie Madoff) and walk away relatively scott free -- considering you may have stolen billions of dollars. Of course the article doesn't condone the activities or even say that people should expect to get away with things, but it offers some interesting observations on how Madoff consciously did certain things to limit the collateral damage of the fraud for himself and his family. A thumbnail outline of the points made follow below.

1 - Avoid the six year lookback period for fraud
2 - Make substantial transfers to your friends and family
3 - Title your assets in the name of your spouse (preferably in Florida)
4 - Confess when before you get caught so you can control things
5 - Get arrested by the Feds, not the state.

You can read the whole store here at NY Times.

Image: Tracy O @ Flickr