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Madoff Ponzi Scheme Truthers Trying to Shield Their Immense Wealth

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There’s a growing number of old consumers who dealt with Bernard Madoff who want to be able to examine a collection of documents related to the infamous Ponzi scheme that took its victims for billions. Such a request may be puzzling to hear about because it was settled almost a decade ago that Madoff operated the largest Ponzi scheme ever, but these past customers demanding documents are searching for proof that the Ponzi scheme never existed in the first place.

There’s a reason why these people may want to push such a theory because unlike the victims, they have over $100 million of “false trading profits,” according to SFGate, which means that they wouldn’t have to give up that money if there was never a scheme. The money couldn’t be from fake trades if there was never any fraud, if these people are to be believed over the court of law, overwhelming evidence, and an admission of guilt by Madoff.

Customers believe it is possible to show Madoff made legitimate investments, which would blow a hole in the argument that all of the trading was an illusion meant to keep the Ponzi scheme propped up, in classic fashion but on a scale never before seen. The company’s trustee completely dismisses any of these arguments and finds them completely out of touch with reality.

“The standard for a Ponzi scheme is that there is no legitimate business, but Madoff was the single largest market maker in the world,” lawyer Helen Davis Chaitman said. Approximately 70 customers call her their representation. “I believe I can prove that securities were purchased for some of my customers.”

Chaitman thinks the trustee isn’t correct in helping recover money by suing those who got out of the scheme early enough to turn a profit because Chaitman argues there was real trading happening on behalf of Madoff’s victims. The real blame, as Chaitman claims, comes from the U.S. Securities and Exchange Commission being defrauded by Madoff who misrepresented other aspects of his operations but never actually traded fake securities.

She thinks loss claims should reflect the final account statements and not the total principal that was lost.

“They haven’t proved it, after all this time and all this money,” Carol Neville, another lawyer for the customers, said at a July 25 bankruptcy court hearing in New York.

Chaitman has been trying for two years to obtain the 30 million documents that she believes can prove her argument.

She said that the database would blow up the trustee’s argument by disproving “what he’s represented throughout the case.”. “Why wouldn’t he just give us access — there’s no cost to him.”

“Bernard Madoff’s fraud was a Ponzi scheme if ever there was one,” Matthew Schwartz, former federal prosecutor who dealt with the Madoff case said. “The evidence at trial proved beyond a reasonable doubt that Madoff did not buy and sell securities for his investment advisory clients.”

By: Theodore Curran

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