Madoff’s Ponzi investment fraud: a social capital analysis

Paul Manning

Journal of Financial Crime, 2018, vol. 25, issue 2, 320-336

Abstract: Purpose - The social network analysis of criminal networks at both the ego and socio-centric level is well established. This purpose of this study is to expand this literature with a social capital analysis of a criminal network. The focus of the analysis will be the recent egregious investment fraud of Bernard L. Madoff Investment Securities (BLMIS). Design/methodology/approach - This research involves a case study of the BLMIS financial fraud. The article uses a social capital theoretical lens, with archival sources taken from the court records ofMadoffv.NYto include victim impact statements and the defendant’s Plea Allocution. Findings - Financial crime literature can be expanded with a social capital analysis which facilitates a socio-economic analysis of ego-centric criminal networks. Research limitations/implications - Each financial crime is of its time; however, there are recurring socio-economic network characteristics that could be applied to develop an understanding of criminal networks. Practical implications - Any understanding of financial crime, including contemporary instances of criminal innovation, such as cyber-crime, can be enhanced with a social capital analysis of criminal networks. Originality/value - A social capital analysis of financial crime draws attention to “human factors” in criminal networks that are integral to this form of crime.

Keywords: Ponzi scheme; Social Capital; Affinity fraud; Madoff (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-06-2017-0057

DOI: 10.1108/JFC-06-2017-0057

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