Introduction:Case Studies—Finance, Education, and Law William Deringer (bio) when does a con become a con? the papers in this section interrogate this often frustrating question by examining three institutional fields—finance, education, and law—in which matters of trust (and distrust) are particularly salient. The "con" in this question can be taken in at least two ways: as a description of a person (a con artist) or an enterprise (the confidence game). So too can the "when": it is both developmental—when in time does a scheme (or schemer) go from being legitimate, if perhaps a bit tricky or shady, to being an outright con (or con artist), and how does that occur?—and taxonomic—when conceptually does a specific venture cross the line from legitimacy to illegitimacy, legality to illegality? Diana Henriques's revelatory account of Bernie Madoff and his unprecedented Ponzi scheme offers a rich case for thinking through when a con becomes a con in a developmental sense. The question of when and why Madoff went from being a legitimately successful financier to the perpetrator of one of Wall Street's most horrific financial frauds remains the biggest mystery in the entire affair. "While we know a good bit now about how Madoff conducted his fraud," Henriques writes, "we unfortunately know less about why he did so" (750, this issue). As Henriques observes, there are effectively two standard narratives given to explain how con artists emerge. In the first story, the confidence man rolls in from out of town, unknown to the locals, [End Page 739] peddling a carefully wrought fraud, always already a fully fledged deceiver. This is the iconic image of a con artist as a "charismatic bon vivant" (755) that we might associate with the snake-oil salesmen of the nineteenth century or with Charles Ponzi himself, the Italian- born financial trickster who arrived in Boston in 1920 and gave his name to the scheme Madoff would perfect decades later. In this story, the con begins the minute the fraudster arrives in town, and there is nothing incremental or accidental about it. The question of how that individual came to be the deceptive person he or she is becomes essentially moot, because the con artist erases his or her own biographical past and fabricates an entirely new one. The second common story of how a con becomes a con is the story that such artists often tell about themselves, a "slippery slope" story of creeping transgression of the sort exemplified by Patricia Highsmith's Tom Ripley or Breaking Bad's Walter White. This is the story Madoff told Henriques, that "he 'got in a bind' and took some dubious 'temporary' steps to cope, then couldn't get out of the sinkhole opening underneath him" (750). In the first of these stories, the process by which the con becomes the con is sudden, timeless, volitional; in the second, it is gradual, historical, accidental. Henriques reveals that neither of these two standard accounts explains how Madoff became "Madoff." He never rolled in from out of town with a well-formed plan to defraud, but rather exacted his confidence scheme upon communities who had long known and trusted him. Rather than emerging from the proverbial shadows, Madoff worked in the open, generating credibility by doing business with highly visible Wall Street firms and surviving numerous SEC investigations. The confidence that his investors and counterparties placed in him was derived not from a flurry of fast talk and big promises but from a long record of fair dealing and soft-spoken success. (Part of the crooked brilliance of Madoff's scheme was that his funds promised strong and consistent financial returns, but never ones that were so high as to be implausible). But neither was his Ponzi scheme the product of a steady accumulation of minor manipulations and the gradual [End Page 740] erosions of moral scruples. As Henriques astutely points out, Madoff had exhibited a ruthless willingness to deceive since at least 1962, when he surreptitiously borrowed money to cover investors' losses when the market hit a momentary "air pocket." Madoff may not have always planned to execute the particular kind of Ponzi scheme he...
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Sep 9, 2019
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