FRAUD CASEBOOK

Bernie Madoff

Read the following articles or other related articles regarding the Bernie Madoff case and then answer the questions below:   Please be sure to include citations and references where they are utilized. 

Sources: 

Jason Zweig, “How Bernie Madoff Made Smart Folks Look Dumb,” Wall Street Journal, December 13, 2008.  

Zachary Goldfarb, “SEC Broadens Its Probe of Failures in Madoff Case,” Washington Post, January 6, 2009. 

Short Answer Questions 

1.What type of fraud scheme did Bernie Madoff commit? 

2. What was Bernie Madoff’s monthly average return to his clients? 

3. How long did this monthly average return last? 

4.Describe the demographics of Bernie Madoff’s customer base. 

5.How was Madoff’s scheme discovered? 

6.Did anyone attempt to inform the regulators about Madoff’s scheme? If so, who? 

Discussion Questions 

1. In general, would you define Bernie Madoff’s clients as sophisticated investors or naive? Why? 

2. Whether you described Bernie Madoff’s customers as naïve or sophisticated, what trait(s) allowed his clients to become victims? 

3. Why wasn’t Bernie Madoff’s scheme caught earlier? 

The purpose of the “Scientific Method” is to prove or disprove a hypothesis. In courses that are strictly scientific in nature, such as biology, the “Scientific Method” is used as a step-by-step process as an experiment. However, in a course such as critical thinking, we can still apply the scientific method to help us solve problems. Your assignment is to apply the scientific method by answering questions related to the case study.

Directions to complete assignment:
1- Read the case study 
2- Click HERE  to download the assignment 1 worksheet
3- Use the worksheet to respond to the questions.
4- Name and save the document as ‘LastnameFirstName.docx”-So John Smith would be “SmithJohn.docx (or.doc)

Case Study- Is Johnny Cheating?
Johnna is dating Johnny, and they have been living together for the past 6 months. Every Wednesday night Johnny stays out until 10pm. During that time, he does not answer Johnna’s text messages or phone calls. When he does come over he smells like a woman’s perfume. More recently during the weekends he says he is running errands and going shopping, but never comes home with any bags. Even though they are very much in love, Johnna thinks that Johnny is cheating on her.

Grading Criteria:
1. Answer each question in paragraph format. 
2. Your answers must be written in complete sentences, without spelling or grammatical errors.
3. Your answers must be in your own words. 
4. Use MS Word to complete this assignment.