Go to jail, go directly to jail….

Bernie Madoff, Ponzi scheme emperor, was ordered by a federal district judge to go directly to jail while he awaits sentencing.

Madoff pled guilty today to 11 criminal charges. The judge determined “He has incentive to flee, he has means to flee, and he is a risk of flight.”

Justice is served.

And for those who tossed all of their money at him so he could make them richer than they otherwise were, faster than they otherwise could have achieved it and who are now destitute, or as one “victim’s” spokesperson said, “they now have to work menial jobs,” I say never put all your eggs in one basket.

That’s what they teach those of us who tend to work menial jobs.

Since we have less eggs than you people who worked important jobs or didn’t work at all, it was imperative that we learn not to get so greedy that we would turn over our life savings to one guy, with no track record, and risk losing it all, just so we can brag that we’re in with the in crowd.

Perhaps a review of the seven deadly sins –  lust, envy, gluttony, sloth, greed, anger and pride, would be in order here as well.

I believe that Madoff and his investors, probably were guilty of envy, greed, and pride……but careful, don’t let anger get the better of you or you just might end up with Madoff in the federal pen of the government’s choice.

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Most scams are run out of Texas and Florida….

What little people have known for years, apparently wealthy people are learning the hard way. If it seems to good to be true, and it is coming from Florida or Texas…..it is.

First was Madoff, who was running his pyramid scheme for 20 years until it recently fell apart, leaving in its wake West Palm Beach millionaires and a long list of people with cash to burn, selling their estate jewelery to make ends meet and now, Texas enters the financial scam scene.

Texas billionaire Allen Stanford, has been charged by the SEC in a civil complaint with “fraud of shocking magnitude that has spread its tentacles throughout the world,” said Rose Romero, regional director of the SEC’s office in Fort Worth, Texas, and reported by Reuters.

Stanford, who holds dual U.S.-Antigua citizenship, has dropped off the face of the earth and failed to respond to a subpoena. The SEC can’t understand it.

SIB, his company, oversees $50 billion in assets (this seems to be a magic number, Madoff was charged in a $50 billion fraud scheme).

Maybe the SEC doesn’t consider it worth their time to investigate, unless it amounts to enough money to warrant Barbuda and Antigua’s prime minister to consider the consequences “catastrophic.”

Stanford’s banks are based there and, according to Reuters, “he owns the country’s largest newspaper, heads a local commercial bank, is the biggest private employer, its top investor and is the first American to receive a knighthood from its government.”

He is accused of selling $8 billion in CD’s “by promising high return rates that exceed those available through true certificates of deposits offered by traditional banks.”

Reuters lists additional SEC allegations as the following:

— Stanford’s Antigua-based bank reported identical returns of 15.71 percent in 1995 and 1996, which the SEC called “improbable” and suspicious.

— Ninety percent of the offshore bank’s claimed investment portfolio was in a “black box” shielded from any independent oversight, and only Stanford and aide James Davis, also charged, knew details of the bulk of the portfolio.

— Stanford failed to cooperate with the SEC probe and continued to mislead investors by falsely saying the SEC had frozen accounts or the company had ordered a moratorium on CD redemptions.

— A major, unidentified clearing firm stopped processing wires to SIB for purchase of SIB-issued CDs after the clearing firm was unable to obtain information about the company’s financial condition.

— Stanford used false information to promote a mutual fund program separate from the CDs. The program grew to more than $1.2 billion from less than $10 million in 2004.

In Antigua, hundreds were lining up to get their money out, Panama regulators seized one of the Standford’s local affiliates, the local arm of its financial group pulled itself off of Columbia’s stock exchange, and Adolph Ogi, the former president of Switzerland, quit his post on the advisory board of Stanford Financial Group.

Despite all of this, Reuters states that “There were no signs of imminent criminal charges against Stanford, whose personal fortune was estimated by Forbes Magazine last year at $2.2 billion. A Justice Department spokesman would not confirm or deny the existence of a criminal investigation.”

I would think criminal charges would be a no-brainer, considering the amount of money involved, the 30,000 clients and the 131 countries in which he operated.

But no.

Why, you ask?

Because Reuters also reported this:

Stanford was also expanding his political reach, opening a Washington lobbying office about two years ago after buying the Washington Research Group, a policy study unit of Charles Schwab & Co, in 2005.

Stanford spent $2.8 million on lobbying in 2008, according to records accessed through the Center for Responsive Politics, which tracks campaign contributions. His political action committee and employees donated about $2.4 million to parties and candidates for federal office since 1989.

Campaign finance reform won’t fix this, the only thing that will is term limits for Congress and supermax prisons for the influence purchasers.

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