Bernie Madoff in Jail! It’s Not “Club Fed” I Know – I’ve Been There…

March 12, 2009

madoff-cp-6397978There was cheering from the crowd when Madoff was immediately taken to jail.  Emotions are running high and will do so for years to come.   But this is not a joyous day.  Many victims lives have been radically transformed by the financial crime Madoff effected.  Likewise, Madoff’s life as he knew it is over.  Leaving the comfort of normal life to go to prison is a radically different experience as well.

I know – regretably I have been there for exactly the same crime Madoff plead guilty to today.

Every choice has a consequence.  Many were victimized by Madoff et al and both the victims and Madoff, himself, are facing the consequences of choices made.

Madoff made the following comments in court today.

“I operated a Ponzi scheme.  I thought it would end quickly, but it proved impossible.  I am ashamed for these criminal acts. I always knew madoff_sketch_09031203this day would come.”

I was asked today on CBS radio – KRLD – by Ernie and Jay about the mentality of how something like this could happen.  Is it possible that Madoff just was out to steal from folks?  The answer is simply – NO.

While I don’t personally know Bernie Madoff, I know the thought process that ends in federal prison.  Madoff is a smart man.  In fact, I would say that he was brilliant in his ability to effect such a scheme successfully for so long.  That is rather amazing.  But, for a time, I suspect when he first got started, Madoff was legitimate.

To effect a fraud like this, there must be three components: (1) need; (2) opportunity and (3) rationalization.  My best guess is that Madoff had two needs that came together when he began this in the early 90’s – (a) emotional need – he would not admit that he was faliable; and (b) money – in that he likely lost money and was unwilling to admit that fact.  Hence, he entered into the second  part of creating such a fraud – he took advantage of his name and notariety to gain more money – more investors or more victims.

CNN reported: Madoff admitted that he never invested his clients’ money, and that he deposited the funds into a “Chase Manhattan” bank.

At that point, Madoff crossed the line of investing and became an outright fraud.  Amazingly, instead of continuing to invest clients money hoping for the big win, Madoff just deposited the money in the bank.  Of all revelations, that was the most amazing.  Effectively he just gave up, committed the crime and waiting until the house of cards fell.

TONIGHT FOR MADOFF:

As I type this I can speak first hand from experience, Madoff just entered a phase of life that is totally foreign and for which he is unprepared.  Likely, as he was removed from the court room, he went to processing where he removed his clothing and was issued prison issue clothing.  It is doubtful that he was madoff_jail_cell03allowed to keep much other than one set of “street” clothes that might be used for limited visiting privileges or meetings with legal counsel, etc.  He would have likely been handed his bed linens and escourted to his holding cell.   Unless because of his age he was assigned a lower bunk, he would be given the upper bunk as those with more time in the facility get the privilege of lower.  His meals would be a step above a Swanson’s TV dinner – maybe – and the routine is strict.

Counted multiple times per day, Madoff will soon find that he’s no more than anyone else incarcerated, an inmate.  Inmates will likely acknowledge him, but not consider him any more than they.  In fact, it is likely that many will avoid him fearing that what they might say to him will be used against them (they fear he’d become a snitch) in order to gain favor with the judge for a lighter sentence.

Tonight will be one of the longest nights of Madoff’s life.  He will wonder to himself – time and time again – what he has done and why.  Those thoughts will haunt him for the rest of his life, which from a free man’s perspective, has ended.

THE VICTIMS:

Now here’s where I should stop, but for whatever reason, I can’t.  I understand the anger, and desire for revenge that many feel.  It is natural as your trust has been violated.  This is no different than feeling that one has when a marriage ends with the distrust created by adultery.

Many would say that I am the least to offer advice.  Perhaps that is true, but I’m going to try.  First, from a practical perspective seek the legal help you need to recover what you can.  Know that there are possible sources for some recovery including the application of IRC Section 165(c)(2).  I am not an expert in that area, but I have a guest blog from someone who is.  Go there it might be helpful.

Beyond the legal recourse against Madoff and those involved – and I suspect that others will fall from this as well, may I say – with respect – put your loss into perspective.  We come into this world with nothing and leave that way as well.  Money – security – certainly are important, but it is afterall only material.  The longer one harbors anger or hate, the worse life becomes.  Finding the ability to recognize that Madoff will suffer and reap the consequences of his choices is significant.

Your life has changed – so has his.  No one walks away from this feeling good or whole.  The ultimate outcome, however, for you and your well being will, in large part, be a function of your ability to forgive.

IN THE LONG RUN:

Having been there, I know the pain of prison.  Some learn from their experience and others never get it.  In Madoff’s case we may never know what the true effect of his life changing experience will bring.  In my case, prison was life changing.  While I am thrilled with freedom, I understand that my time there changed my life and gave me an opportuity to do something positive today that, in fact, helps others.

Sometimes you can actually get lemonade from lemons!

As always – COMMENTS ARE WELCOME.

HERE is what Madoff read to the court.


O J Simpson’s Self Sabatoge – You Can’t Escape the Law – You Reap What You Sow!

January 14, 2008

Have you ever noticed that it’s impossible to avoid outcomes that – on the surface you would think – you want to avoid. Oh, for a time, you might think you could dodge the bullet, but then reality hits and, once again, you are hit squarely in the face with reality. For O. J. Simpson that rings true.

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Reality is – O. J. Simpson is sabotaging himself.

No I’m no psychologist so I have no formal educational basis for my claim and even though I state that here, I am sure I’ll receive comments to that effect. But, I do have a Ph.D. from the school of practical experience. And, let me say, that is one of the most significant learning environments I’ve ever participated in. So let me state again my premise – O. J. Simpson is sabotaging himself!

The question is why? Why would anyone take actions – either consciously or unconsciously – that would bring about an outcome that, by most standards, people would not want?

Why, for example, would you violate the terms of your bail knowing that such a violation would, most certainly, put you in jail?

The Theory:

We are taught in school several laws which we hold to be truth. One is that, on a universal level, everything seeks to find equilibrium. For example, I am a private pilot and one of the first lessons was that a plane (airplane) seeks to fly, so if you are in an unnatural attitude – let go of the controls and the plane will generally right itself. Similarly, for every action there is an equal and opposite reaction. One might try to delay the outcome or reaction, but it is inevitable.

O.K. – so much for theory. How does that apply to O. J.? Well, O. J. got off from his earlier murder charge. Recall, if the glove don’t fit, you must acquit! Verdict: Not Guilty!

Now for most of us…that little (O.K. Big) brush with the law would be enough. But, O. J. couldn’t resist. He had to try to get his stuff. Slogan: The theft is fine, if the stuff is mine! (Sorry, couldn’t resist that one). Outcome: Busted for armed robbery. Hum…in trouble again. Now why would you even try to (get your stuff back) knowing that you could have an issue with the law?

But…that’s not enough. Simpson had been instructed by Las Vegas Justice of the Peace Joe M. Bonaventure in September not to have any contact with anyone involved in the case — not even by “carrier pigeon.” So what does Simpson – violate the terms of bail. Another dumb move.

Or is it?

Self Sabotage:

If one is guilty of a crime, then one will continue to do things so that guilt is brought to light. While Simpson got past the murder charge, there is something lurking that brings Simpson the need for punishment. So, having avoided what some would call his just reward, O. J. has chosen to act out in different ways so that equilibrium is restored. O. J. is guilty of something and the need for punishment is being manifest by his actions – whether conscious or unconscious.

A universal law is at work here – you will reap what you sow! And, until that law is satisfied, you will continually have the opportunity to reap till there is equilibrium.

The Positive Side of Consequences:

While reaping and sowing, at least in O. J.’s case, seems to focus on the negative, I know from experience that one can experience negative consequences from one’s actions, but likewise, you can enjoy positive results from the seeds you sow. From prison to Senior Sales Executive in a public company – I know that first hand from personal experience and speak about it regularly. If you’re interested in my presentations visit my web site at http://www.chuckgallagher.com

Perhaps, once O. J. is past this phase of his life and has satisfied his need for punishment, he’ll have the time to pay it forward and give back using his celebrity for the benefit of others. Till then – mark my words – a universal law is in play and once started it will find balance.