Bernard Madoff & Greed Bernard

Bernard Madoff & Greed Bernard Madoff and Greed in Business The people taken in by Bernie Madoff's alleged Ponzi scheme may be seen as greedy, but Robert FitzPatrick, a nationally recognized expert on pyramid and Ponzi schemes as well as other consumer frauds, says that isn't the case with most people taken in by such frauds. I've been to meetings where they promote these things, and I don't see a lot of greed in the room," he said. "I see desperation, need, hope.

Somebody will say the people taken in by these things are greedy and stupid. If that's the case, we're all stupid and greedy, then." (Dettro) Bernard Madoff has been arrested for a multibillion fraud that stretched from Europe to Asia and America. Madoff built a giant pyramid scheme that helped him gain new investors all the time, which he used to pay off the old ones. As long as new investors were signing up, the deal worked perfectly.

(Bhushan) The driving motivation behind the scheme, from top to bottom, was greed. Everyone -- from Ponzi on down to the last "investor" recruited -- knew that in the end someone would be left "holding the bag;" that people would get hurt; and that some would be hurt very badly. They didn't care, just so long as it wasn't them.

Most who involved themselves in the scheme felt that they could get "in and out" of the pyramid before it collapsed - and "to hell" with those who were "dumb" enough to get caught. (Bhushan) The question that everybody with big chunks of money parked with exclusive fund managers on Wall Street will be asking today is whether there are other possible Bernard Madoffs out there: high-profile managers who've been lying about their returns for years.

The answer to this is going to be "yes," which leads to the second question of, "Is there any way to spot them?" or, in other words: Is there a way to know whether a money manager's returns are too good to be true? (Gimein) This is fraud that has gone wild," says Fitzpatrick. "It's no accident at all that Madoff took some of our smartest people for billions of dollars.

There is no one dealing with these things." He said the pyramid schemes are disguised as "matrix selling" and "cash gifting" opportunities that assert their legality and legitimacy by citing lack of government action. (Chris Dettro 2) But the Madoff scheme, unfortunately, is not the only one on the SEC's desk right now. The U.S.

Securities and Exchange Commission is pursuing at least one other case in which investors may have been cheated out of as much as $1 billion, according to a person, who declined to name the manager and asked not to be identified because the probe isn't public. This week, the SEC said it also halted what the agency described as a $23 million scam targeting Haitian-Americans, and said the Florida- based operators as recently as last month sought more investors.

(Bloomberg.com) On the hot seat, too, are corporate leaders who made a profit in the midst of the crisis. "They were living so high on the hog, and they were so used to getting, you know, 10, 15, $20 million bonuses, and flying on private planes," Andy Sewer, managing editor at Fortune Magazine, said. "And, then, all of a sudden, the bottom fell out of these companies. it's a reckoning." The question becomes: are there any honest and ethical business executives anywhere? Let's take a look.

Former corporate CEOs like Richard Fuld of Lehman Brothers, faced down questions and cameras on Capitol Hill; former executives of the insurance giant AIG were also questioned. One topic of discussion: the fancy retreat hosted by AIG after an $85 billion bailout. Also facing scrutiny are the bosses of the Big Three auto companies, caught by ABC's Brian Ross flying private jets to Washington to beg for bailout money.

(Kristin Pisarcik and Gail Deutsch) Is it any wonder than schemes like the Madoff ponzi debacle, in such an environment, happen so often? Probably the two most common reasons upper managers commit fraud are greed and need. Both greed and need can come into play on a personal level and on a corporate level. Those who think the perpetrators of fraud are inherently bad are refusing to confront the issue that good people can turn bad. We trust people who seem trustworthy.

But we have to accept that they can change. Many executives who commit fraud were at one time considered rising stars with good values. (Coenen) There are many motivations and factors that go into the decision to commit fraud, and one can appreciate that "greed" and "need" are only two small pieces of the puzzle. Nonetheless, they can be primary motivators for upper-level executives to commit fraud within corporations, so they must be taken seriously if we are to have any chance at preventing fraud.

(Coenen) The Enron scandal demonstrated how money, power, and the accompanying greed can grow exponentially once.