There's a sucker born every minute. -- P.T. Barnum.
I’ve been reading with some interest the downfall of the aptly named con man Bernard Madoff (pronounced “made-off” as in he made off with your money) in part because some friends and acquaintances become unwittingly involved a less sophisticated, Utah County ponzi scheme. Of course Madoff’s con is more stunning because of the amount of money he took ($50 billion) and the length of time it went on (decades).
A Wall Street Journal editorial on Madoff seems shocked that such a renowned man could pull such a con on the super rich. Writes The Journal:
Capitalism runs on trust, so inevitably there will be men like Bernard Madoff who attempt to steal from the trusting. His alleged $50 billion ponzi scheme is exceptional mainly for its size, the length of time he was able to run his con, and the affluent and sophisticated circles in which he operated. There is something especially shocking when a man held in high esteem turns out to be a thief.
A con man held in high esteem? Either The Wall Street Journal editorial writers are extremely naive or have never been suckered by a con man. There is no way Bernard Madoff could have pulled off what appears to be the largest con in history without being held in high esteem.
Capitalism isn’t the only thing that runs on trust. So do con men (and women). Trust is the con man’s ultimate tool. It’s impossible to pull off a con – especially one like Bernard Madoff’s apparently did, without gaining the trust of your victims.
Madoff moved in affluent, “sophisticated” circles because that’s was the only place to find loaded victims. They wouldn’t pay attention to him if he was simply some rube off the street. He had to act like one of the rich elite in order to continue the scam.
And from what I’ve read, it appears Madoff didn’t have to do much conning after his ponzi scheme got started. He’d simply hobnob with the rich and famous in Florida and New York and have his investors tell their friends about the fabulous returns (about 1% a month or 12% a year) they were constantly earning and show off the fancy cars they were driving and more people would be brought on board.
To his credit, Madoff appears to have played his part to perfection by acting hesitant to take on new clients when a friend of a friend would approach him and ask if he or she could invest with him. Con men never act like it’s about the money. Instead they misdirect you into thinking they’re not interested or that they have your best interests at heart.
And just because you’re rich doesn’t mean you can’t be conned. The vaster your wealth, the bigger mark you are. One of the biggest cons of the 19th century involved Phillip Arnold and John Slack involved disguising a worthless piece of land as a diamond mind and, as a result ripping off U.S financier Asbury Harpending, Bank of California owner William Ralston and other “sophisticated” investors. (You can read a brief write up on their scam here. For a more in-depth look at the scam, see Law 21 in Robert Greene's The 48 Laws of Power)
Bernard Madoff proved that you’re never educated, sophisticated, or rich enough to avoid being conned. All he did was follow the age old tricks of playing to the victim’s fantasies and greed then gain their trust.
Bernard Madoff just did it better than most. The result was a scam that netted more money and lasted longer than other ponzi scheme and left a trail of lies, deceit, and broken dreams in its wake.