Ponzi schemes inevitably fail. Madoff must have realized this; did he feel like he was just in too deep?
His legitimate business was making money on commissions, which they earn whether the market was up or down. But at the very beginning of his career, as a sideline he invested some customers money, originally like 20 people. And he lost money—he realized he can face investment losses. He literally could not psychically accept that. Instead of doing the right thing, which is get the hell out of the business, he pyramided it up, worse and worse and worse. He couldn’t get out.
You know what his exit strategy was? I think in the end, he figured he’s going to die, and it would be all over. He wouldn’t be around to see it. That’s why he wouldn’t let his kids into the secret of the Ponzi scheme. He kept telling them that when he died, the investment side would unwind and they’d give all the money back to investors.
‘Enforcement 40’ for 2020
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