Massive Ponzi Scheme

Bernard L. Madof is accusing of defrauding investors out of $50 billion!! He runs an investment advisory business, which manages clients money. He would use the one client's money to pay the returns or redemptions of another clients. It's like the old saying "Robbing Peter to pay Paul."

The criminal complaint signed by FBI Agent Theodore Cacioppi said Madoff told at least three senior employees at his Manhattan apartment Wednesday that the investment adviser business was a fraud and had been insolvent for years, losing at least $50 billion.

I find the $50 billion a bit hard to swallow. Detroit is only asking for $13 billion in bailout. Jerome Kerviel, the rogue trader of the Socgen fame, lost only about 5 billion Euro, or about 8 billion USD at the time. So I wonder about the validity of this $50 billion number, let's see if this number changes.