The trust people tend to feel toward others in the same ethnic, racial, and political groups makes them easy targets for scammers.
Last week’s ABC mini-series chronicled the most famous financial fraud in recent American history: Bernard Madoff’s $50 billion Ponzi scheme, which devastated elite institutions and families of the American Jewish community. The scale of Madoff’s crimes was breathtaking. There’s much to be said about his crimes—not least about the incompetence of the regulatory apparatus that failed to stop him despite repeated warnings and what researchers Greg Gregoriou and Francois Lhabitant quite appropriately called “a riot of red flags” over many years.
The tragedy itself was also its own sort of warning. Madoff’s victims were not a random assortment of the well-off; he decimated a segment of the wealthy Jewish community and several Jewish charitable organizations. Knowing the general magnitude of Madoff’s crime, I’m still taken aback by the particulars, which betray Madoff’s lack of conscience and any sense of limits. He wiped out Elie Wiesel’s life savings, and stole $15 million from Wiesel’s foundation. Madoff defrauded Hadassah. Who defrauds Hadassah? That’s like mugging your grandmother.
