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There may be more to Madoff tale »

Madoff is more than just a sociopath. Too much of this story doesn’t hang together to my mind, and he was too functional in other aspects of his existence.
That’s why I think this may be more about money laundering and tax evasion than about fraud. Many people may not realize that he pleaded guilty to money laundering too.
If so, then some Madoff “victims” may be perpetrators.
Here’s my thinking:
It is bothersome that investigators have been unable to find records of any trading for years. If there had been trading, and massive losses, then it would be arguable that he started off legit, then got into trouble and was forced to begin his Ponzi.
But the fictitious nature of this long-term scam may mean it was money laundering combined with a Ponzi.
Here’s how money laundering would have worked: Unsavory people, from drug cartels to gangsters or greedy tax evaders, are forced to keep their ill-gotten gains hidden from police or tax authorities in dirty-money havens. In order to get their money out so they can spend it, they hire such people as Mr. Madoff to “clean” their cash.
On paper, they “invest” huge sums in capital in Madoff funds in return for 10% a year in dividends. But only the 10%, plus fees for Madoff, are transferred to Madoff so he can pay the crooks in a taxable jurisdiction.
In other words, the crooks pretend to give him millions to invest, he pretends to invest it, and he collects big fees for transferring to them 10% every year of their hidden capital.
Laundering money is not for the faint of heart. These people are often dangerous, which may explain why some of Madoff’s biggest feeder-intermediaries are known to police and another one disappeared from Vienna immediately after the jig was up.