Bernard Madoff, developer of the biggest financial pyramid in the US history called the government a so-called “Ponzi scheme”, which the Madoff Securities fund was based on. He announced this in a phone interview with New York magazine. The interview itself was published on the magazine’s website on February 27.
According to the Ponzi scheme early investors are paid their returns out of money put in by later investors. “The whole government is a Ponzi scheme", – said Madoff. Although he did not explain the exact meaning of this.
The creator of the pyramid said that responsibility for financial fraud falls not only on the bankers employing it, but also financial regulators like the U.S. Securities and Exchange Commission (SEC). He said the Securities and Exchange Commission "looks terrible in this thing." Earlier the SEC checked the Maduff Securities activity for several times, but never could find a violation.
Madoff Securities was considered the most reliable financial institutes and was declared by the SEC to be a financial pyramid only in December 2008. According to one version, Madoff confessed to fraud to his sons who addressed the government. In court Madoff plead guilty in financial fraud and was sentenced to 150 years of imprisonment. At the moment he is serving his term in a prison in North Carolina. Madoff estimates investors’ loss caused by his fund’s activity at $50 bn; however, the court has reduced this amount to $13 bn.
