Madoff Swindled, but It Was Never $50 Billion

Bernard Madoff’s guilty plea yesterday was an anticlimax of sorts. Yes, we got a few more details from the untrustworthy horse’s mouth, and the sight of Bernie in cuffs provided relief to a few victims. But as Chadwick Matlin reminded us, there’s still a lot we don’t know about Madoff’s epic swindle. More and more people are starting to cotton on to the fact that “years of investment returns that never existed” means the ultimate losses cannot be $50 billion, as Madoff originally claimed (or, as summed in all account statements to clients, $64.8 billion). NPR’s Robert Smith cites an AP report putting the amount between $10 billion and $17 billion. And Madoff’s own allocution makes it pretty clear what happened: “I never invested those funds in the securities, as I had promised. Instead, those funds were deposited in a bank account at Chase Manhattan Bank.” In other words, he just stashed cash.

Many elements of the media haven’t figured out how to talk in dollar terms about the Madoff and the damage done. Even Bloomberg, which had done extensive reporting in January to put the figure at $41 billion, repeated the $65 billion in stories filed today. It’s hard to report on a massive scheme without settling on a price tag, but we may have to settle for that at the moment. Check out The Big Money’s original argument for why Madoff’s swindling may amount to considerably less than $50 billion, or $64.8 billion, in this post from our "Madoff Files" blog.

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