Remember when the Feds were thisclose to finally arresting Bernie Madoff’s sons and confirming all of our suspicions that the biggest Ponzi scheme ever was a family affair? Well, they still haven’t done that. But they have arrested Bernie’s IT guys.
The U.S. Attorney’s office in Manhattan has arrested two computer programmers who formerly worked for BLMIS. According to the SEC, they provided the 70-something-year-old Madoff with the technical support needed to keep a three-decade long fraud going.
Jerome O’Hara and George Perez “used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff’s scheme for so many years,” the SEC’s George Canellos said. They have been charged with conspiracy and falsifying documents.
“Special computer skills?” Is it any wonder that the SEC can’t catch swine flu at a New York City public school?
Much of the criticism of the agency since the Madoff scandal–and the three million other frauds and alleged frauds that have collapsed since then–has been of its investigators, who apparently can’t wrap their heads around some of the more complicated trading strategies and instruments which the crooks aren’t actually trading anyway. It hardly takes “special computer skills” to run an investment scam; many of those who do so are barely literate.
It’s time to throw away the typewriters and start running Excel classes at the SEC.
S.E.C. Accuses 2 Programmers of Aiding Madoff [NYT]
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Hilarious Tags. My guess is that these computer geniuses will plead out.
It is arguable that the SEC’s actions seem less typical of an incompetent regulatory body and more typical of a fraudulent consenting party. I could be seen as big a part of the schemes as the “perpetrators”. More than an administrative review of its procedures, somebody should launch a full fledge criminal investigation within the SEC.
Bess -
Bernie actually ran the entire scheme on an AS400…which is a system that is about 30 years old, and has slightly less processing power than a modern microwave.
@2 – I think its more ineptitude than criminal conduct.
@2
Its called Regulatory Capture
@4. Don’t forget death by a thousand cuts (budget and legal restrictions outside of the SEC itself).
Good post, Jonzo
@4 – sufficiently advanced incompetence and malice are indistinguishable.
Not 2
Would be useful for the American public to have the names of each and every one of the SEC’s examiners of Madoff’s fraud (say from 1999 to 2008 or so) disclosed. At least some sort of public ridicule of these people involved in this case could provide some minimal comfort to the victims and taxpayers…
The truth is, Harry M. had this whole thing figured out & was screaming from the rooftops. No one at the SEC paid attention – they have liability and they are trying to whitewash it.
2nd @9. Get their addresses and I will personally charter a tour bus.
@3-
Bear used an AS/400 in Equities.. Hmm.
-mrp
It was an OPEN secret on Wall Street that Madoff was a complete fraud. Ask anyone. No one was suprised. That is the dirty little secret.
You don’t actually need anything more powerful than an AS/400 to fake some paperwork.
The reason that everyone knew that Madoff was a fraud was this: His funds were closed except if you went through a “Feeder Fund”. That makes no sense at all. Either its closed or not. Yet, these Feeders were sending Billions to Madoff all the while his fund was closed. That was the big “tell” for Wall Street. You didnt see Harvard, Stamford, Columbia or Yale invest with him.
My name is Bernie Madoff; I’m a PC, just like BG.
So the spic and the mick take the fall… yawn.
Shazbot, I feel like we crossed over into bizaro DealBreaker. You finally have a winning post (note that @3 thought it was Bess) and it’s the comments that are a snooze fest.
Good boy. Take the next two days off.
in 2006, o’hara and perez were transferred from the it dept to pascali’s. so for more than 10 years, these two bozos reported to bernie’s cio who died in february 2008, taking her secrets with her.
The photo: He is covering his miniature erection with his hands, and his puppy-like facial expression shows his shame.
Bernie: So Jerome, listen, that virus you’re always talking about. The one that that could rip off the company for a bunch of money…
Jerome: Yeah? What about it?
Bernie: Well, how does it work?
Jerome: It’s pretty brilliant. What it does is where there’s a bank transaction, and the interests are computed in the thousands a day in fractions of a cent, which it usually rounds off. What this does is it takes those remainders and puts it into your account.
Bernie: This sounds familiar.
Jerome: Yeah, They did it in Superman III.
Update, they made bail. $1mm.
Great title. But we’ll get those little pricks…