Online Auctions Profit From Madoff Misfortunes
Posted on: Monday, 5 January 2009, 15:10 CST
After Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC, was arrested in December for allegedly heading up a $50 billion “Ponzi scheme”, many investors were left reeling. Now, some keen investors are profiting from his misfortunes by selling Madoff memorabilia on eBay.
Before Madoff was implicated in the scheme, he would tack his name on numerous keepsake items ranging from T-shirts to cigar humidors.
John Mitchell, of Fox Grove, Illinois, has made money from the misfortunes of firms like Lehman Brothers and Madoff. He said he buys Madoff labeled items and resells them on the online auction site.
He recently purchased a humidor from the manufacturer before it went en route to Madoff’s firm.
"It's sad, but it's still humorous," Mitchell said.
However, bidding for most Madoff related items won’t do much to regain the billions of dollars lost in the Ponzi scheme. Most items didn’t earn bids over $50 on eBay.
Eleven bidders were hoping to take home a fleece jacket, size L, on Sunday; the highest bidder had offered $147.59, according to Associated Press.
A Ponzi scheme is a swindle offering unusually high returns, with early investors paid off with money from later investors.
U.S. Federal Bureau of Investigation agents raided Madoff’s New York apartment in mid December 2008.
"There is no innocent explanation," Madoff said in light of the charges, acknowledging that he had "paid investors with money that wasn't there."
U.S. prosecutors charged Madoff, 70, with a single count of securities fraud. They said he faces up to 20 years in prison and a fine of up to $5 million.
Also up for bid was a photocopy of a financial statement Madoff put out for a client, postmarked Dec. 3, a week before his Dec. 11 arrest. The seller said he may put up the actual document for bidding at some point.
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Source: redOrbit Staff & Wire Reports
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