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Bernard Madoff

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Running head: BERNARD LA WRENCE "BERNIE" MADOFF

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BERNARD LA WERENCE "BERNIE" MADOFF Naamah Pagan Augustine Weekley Business Law 1 August 21,2011

BERNARD LA WRENCE "BERNIE" MADOFF

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Introduction Bernard Lawrence "Bernie" Madoff ran one of the largest Ponzi Schemes. A Ponzi scheme is a scam investment designed to separate investors from their money. It is named after Charles Ponzi, who constructed one such scheme at the beginning of the 20th century. The scheme is designed to convince the public to place their money into a fraudulent investment. Once the scam artist feels that enough money has been collected he disappears taking all the money with him.

Describe three types of illegal business behavior alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business. The three types of illegal business behavior alleged against Mr. Madoff were fraud, money laundering and perjury, The first illegal business activity I would like to talk about is fraud. Fraud is the representation of a matter of fact-whether by words or by conduct, but false or misleading allegations, or by concealment of what should have been disclosed-that deceives and
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intended to deceive another so that the individual will act upon it to his or her legal injury. Fraud is the intellectual use of deceit, a trick, or some dishonest means to deprive another out his/her/its money, property, or a legal right. (Hill/Hill) Madoff actually

committed fraud in the inducement which "occurs when a party makes a false statement to persuade the other party to enter into an agreement." (Bagley/Savage p 222) He also committed security, mail and wire fraud. The next illegal business behavior I would like to discuss is money laundering. "Article 1 of the draft: European communities (EC) Directive of March 1990 defines

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