Bernard Madoff and His Victims
Bernard Madoff’s financial fraud was global, an enormous amount of money was involved, and thousands of people and hundreds of institutions were swindled. Madoff’s con game was a Ponzi scheme—an investment that pays returns to early investors from money acquired from subsequent investors.
This case study of the Madoff scheme looks at the effects of his crimes on the victims. Elements from a theoretical framework put forward by Erving Goffman provide a perspective for understanding the development and the aftermath of Madoff’s con. For example, as Goffman would have put it, Madoff’s “marks were not cooled out.” Many did not accept the fact that they were victims of a con game and publicly clamored for sympathy, restitution, and for public officials to share their perspective.
Inside men, ropers, outside men, and victims are at the core of con games. Lionel S. Lewis emphasizes that it is important to understand a con game’s characteristics so as to grasp how it operates. The Madoff fraud includes elements of a variety of con games. For a comprehensive study of this economic crime, the “case study” must be seen as part of the broader social system. Considerably more is known about the dynamics of con games than about Ponzi schemes, and this fact frames this book’s approach. To better understand what Madoff did, who was central in keeping his scheme alive, whom he defrauded, and how they reacted, this work is as invaluable as it is illuminating.
“Madoff's infamous crime is generally called a "Ponzi" scheme, but Lewis (emer., SUNY Buffalo) takes the perspective that Madoff perpetuated a confidence game because the marks ("victims") had faith in and trusted him or the financial advisors ("shills") who invested on their behalf. Unlike other writers who focus on Madoff, Lewis considers victims' reactions to their sudden diminished financial security…. Although Madoff's con was a financial fraud, Lewis's account is more concerned with behavioral finance and the psychological and sociological aspects of the crime and its effects on the victims. The validity of this work is enhanced by extensive notes, excerpts from transcripts and questionnaires, and a fascinating illustration of a monthly statement received by an investor…. Recommended.”
—H. Mayo, Choice
“While many books have been written about Bernard Madoff, this is the first to focus in detail on his victims and the story of how they became involved in the Ponzi scheme. Lewis (sociology, SUNY Buffalo; When Power Corrupts: Academic Governing Boards in the Shadow of the Adelphi Case ) has written an absorbing account of the victims, drawing on their own words and examining them through the lens of sociologist Erving Goffman’s study of victims of fraud. Unlike other books such as Erin Arvedlund’s Too Good To Be True , which briefly mentions the investors but focuses primarily on Madoff, Lewis analyzes the victims in their own words, taken from court statements, congressional hearings, and his interviews with them. The investors, he finds, were mostly in their sixties; all were older, wealthy, sophisticated, and eager to take advantage of a sure thing that provided higher returns than insured investments. The book includes copies of Madoff investor monthly statements and a lengthy recounting of investors’ dealings with Madoff and his helpers. VERDICT Highly recommended for academic as well as true crime audiences.”
—Harry Charles, Library Journal
“Lionel Lewis provides an enlightening and bracing account of the multiple ways in which Bernard Madoff accomplished his notorious crimes against hundreds of credulous but duped investors. The social psychology of vicitimization, as Lewis demonstrates, has as much to do with the seduction as it does with seduction’s aftermath.”
—Jonathan B. Imber, Jean Glasscock Professor of Sociology, Wellesley College
“Meticulously researched and poignantly detailed, Lionel Lewis’s Con Game takes a distinctive, engrossing angle on Bernard Madoff’s massive financial fraud—the fate of his victims. Lewis clearly documents, by citing the conned investors’ own accounts, that this was no victimless crime . . . Lewis is impressively attentive to the complexity of the victims’ reactions, involving many different mixtures of anger, resentment, entitlement, self-criticism, and inclinations to blame others. He is rightly sympathetic to their plight, even as he also makes evident that some of the victims’ thoughts and actions were far from admirable. While Lewis’s analysis illuminates the particulars of Madoff’s massive fraud, he usefully and deftly situates this case study in more general scholarly discussions of con games. Madoff’s swindle was surely epic in scope, but in drawing on the work of Irving Goffman and others, Lewis shows that this con closely followed the dramatic arc of many predecessors. Lewis’s analysis underscores that Madoff’s con is sociologically intriguing because it was not unique, just unusually devastating to so many victims.”
—Paul W. Kingston, professor of sociology, University of Virginia