A crime script analysis of the Madoff Investment Scheme

Abstract

The Madoff Investment Scheme was a long-term and large-scale fraud which involved both an affinity fraud and a Ponzi scheme. Numerous studies have examined financial and legal aspects of the case, but relatively few have explored the case from a criminological perspective. This study applies crime script analysis (CSA) to the Madoff case in order to conceptualise the procedural elements of complex fraud offences and to identify crime prevention opportunities for investigators and regulatory bodies. CSA identifies 12 steps in the offence, occurring in three phases which create a relationship between earlier and later victims, with earlier victims providing credibility to the scheme and later victims generating the resources to sustain it. The study finds that crime prevention techniques which harden targets and extend guardianship could reduce criminal opportunities for offenders and techniques which strengthen formal surveillance and assist natural surveillance could control the capabilities required to perpetrate similar offences.