Project 630

I. Project Title: Ponzi Scheme II. Introduction You are a relatively new journalist at an accounting publication: The Journal of Strategic Fraud Warriors, which is headquartered in New York City. The target market for Fraud Warriors includes academics, professional fraud examiners, accounting practitioners, attorneys, financial managers, government regulators, and other highly educated professionals. The journal is sold in high end bookstores, university bookstores, and on Websites of various professional organizations. In your sixth week of employment, your boss assigned you to write an article on the fallout from the Bernie Madoff Ponzi scheme. He expects your final article to be approximately 15 to 20 pages. Since the article will appear in a peer reviewed journal, APA style and formatting must be used. The boss explicitly stated, he expects a minimum of 15 pages of content, excluding the cover page, abstract, table of contents, and references. Bulleted lists are disallowed. APA uses double spacing with no extra white space between items, etc. You’re super excited to be selected as the author knowing that your article will likely attract many readers from prestigious institutions. Before jumping into writing you decide to read more about the Madoff Ponzi scheme. III. Steps to completion Step 1: Read the Bernie Madoff article mentioned below. This can also be found in LEO under Course Deliverable Requirements and in Week 6.

• Read: Case Study, Bernie Madoff’s Ponzi Scheme: Reliable Returns from a Trustworthy Financial Advisor by Denis Collins.

• Optional and for your interest only: o Search the Web for:

▪ Bernie Madoff movies and/or the mini-series ▪ Book, pdf, and movie: No One Would Listen, by Harry Markopolis

Step 2: Use the following question(s) as a launching pad for further research.

• Required Questions to be addressed include: o Taking into account the laws and regulations passed since Madoff’s

fraud, how likely would it be for a similar perpetrator to get away with a $65 billion Ponzi scheme? Why?

o Discuss the use of data visualization techniques that could have detected Madoff's Ponzi scheme earlier. Cite from scholarly (peer reviewed) journals only. When using the UMUC library, One Search,

click Scholarly journals only to retrieve articles from peer reviewed journals.

o Using Cressey's fraud triangle, discuss how Bernie and his co- conspirators rationalized the fraud given that they were all very wealthy before their involvement in the scheme.

o What losses, both financial and nonfinancial, could have been avoided (reduced or eliminated) if the SEC had listened to Harry Markopolis the first time he informed them of his suspicions?

o Charles Ponzi's fraudulent scheme began in the early 1900s. He was imprisoned multiple times, escaped prisons multiple times, and died in the charity ward of a Rio de Janeiro hospital in 1949.

▪ In what ways were Madoff's Ponzi scheme similar to and different from Mr. Ponzi's Ponzi scheme?

▪ Bernie Madoff committed a Ponzi scheme a century later than the original Mr. Ponzi. How has the accounting profession failed to create GAAP and the requisite internal controls to protect the public?

▪ What measures have the accounting profession and federal government agencies implemented to thwart similar financial schemes like Madoff’s Ponzi scheme?

• Optional questions for your consideration: o To what extent would it have been considered fraud, if Madoff’s sons

granted their father’s wish to stay quiet for one-week while he disbursed remaining funds to family and friends?

o How would you have investigated further before investing money with Madoff?

o At what point do you think Madoff should have been caught? o What role did the SEC play in allowing Madoff to perpetuate his fraud? o In general, why do people ignore red flags? o How could savvy investors ignore the red flags? o Why didn’t sophisticated investors perform due diligence before investing

large sums of money with Madoff? o Bernie is now in jail but what happened to his co-conspirators? o Who were some of the unwitting victims in this crime? What types of

restitutions have been made?

Step 3: Submit your draft document to the Graduate Writing Center two weeks before it is due. Use their feedback to improve your final submission.

Step 4: Upload the original document you submitted to the Writing Center, the Feedback you received from the Writing Center, and your improved final document to your assignment folder.

IV. Deliverables • Original document you submitted to the Writing Center. • Feedback you received from the Writing Center. • Final version that incorporates the feedback you received from the Writing

Center. o 15-20 page article in APA style suitable for publication in The Journal of

Strategic Fraud Warriors o Requires a minimum of 15 pages of content, excluding the cover page,

abstract, table of contents and references. Also, bullets are disallowed. APA uses double spacing only. Do not add white space between items, etc. Refer to your APA resources as there are many formatting requirements needed.

Guidance to enhance your final deliverables:

▪ Read the rubric before beginning to prepare the deliverables.

▪ Review the Turnitin resources in Content/Course Resources/Academic Integrity

& Turnitin.

▪ Re-read the grading rubric before submitting your final project to ensure you

have met all of the requirements of this project.

▪ Ask your boss (professor) questions as needed. ▪ Review and refresh your understanding of APA Style formatting

▪ Submit your draft documents to Graduate Writing Tutors at least 1 week before

the project due date. This free resource can be accessed in your LEO

classroom. Make edits to your deliverables after reviewing feedback from the

writing center tutors.

▪ If relevant, review the Departmental Late Policy, which is in syllabus. Note: no

assignments are accepted after the last day of class.

V. Rubrics

Group Case and Final Project Rubric

Criteria

Exceeds Performance Expectations

18 to 20%

Meets Performance Expectations 16 to 17.99%

Does Not Meet Performance Expectations 0 to 15.99%

Identification of the Strategic Issue/Challenge/ Problem

Correctly identifies & provides accurate & detailed descriptions of the most relevant & serious issues, challenges, and/or problems facing the company. Shows superior knowledge of the company's current financial situation & strategic issues. Provides a focused diagnosis of the issue(s) & justifies that diagnosis using evidence presented in the case.

Correctly identifies & provides accurate & detailed descriptions for some of the most relevant & serious issues, challenges, and/or problems facing the company. Shows above average knowledge of the company's current financial situation & strategic issues. Provides a focused diagnosis of some of the issue(s) & justifies that diagnosis using some evidence presented in the case.

Does not correctly identify & provide accurate & detailed descriptions for most of the most relevant & serious issues, challenges, and/or problems facing the company. Shows below average knowledge of the company's current financial situation & strategic issues. Does not provides a focused diagnosis of some of the issue(s) & does not justifies that diagnosis using evidence presented in the case. Or, did not submit.

Analysis of Case Specifics

Does not waste space reiterating information provided in the case. Chooses relevant facts & figures for the analysis, and excludes irrelevant, immaterial, & extraneous information. Examines financial and non-

Wastes some space reiterating information presented in the case. Chooses some of the relevant facts & figures for the analysis, and excludes some of the irrelevant, immaterial, and extraneous information. Examines financial

Wastes a significant amount of space reiterating information presented in the case. Chooses only a few relevant facts & figures for the analysis, and includes irrelevant, immaterial, and extraneous information. Examines financial and non-financial data, but does not performs sufficient data analysis to determine and evaluate

financial data, performs data analysis, and evaluates alternatives.

and non- financial data, but does not performs sufficient data analysis to determine and evaluate alternatives.

alternatives. Or, did not submit.

Conclusions & Recommendations

Develops effective recommendations, solutions, and/or action plans that specifically solve the strategic issues, challenges, and/or problems identified as the organization's most relevant & serious. Supports recommendation with convincing evidence.

Develops some effective recommendation(s) solutions, and/or action plans that specifically solve the strategic issues, challenges, and/or problems identified as the organization's most relevant & serious. Supports recommendation(s) with insufficient and unconvincing evidence.

Develops only a few effective recommendation(s) solutions, and/or action plans that only tangentially address the strategic issues, challenges, and/or problems identified as the organization's most relevant & serious. Does not support recommendation(s) with convincing evidence. Or, did not submit.

Writing Competencies

Clear, correct, and concise use of English grammar with no spelling or punctuation errors. Employs professional writing without colloquial language. Organization is easy to follow and congruent with graduate level writing skills.

Clear, correct, and concise use of English grammar with some spelling and/or punctuation errors. Employs professional writing with some colloquial language. Organization is not easy to follow but the submission is written at the graduate level.

Confusing, incorrect, and or wordy use of English grammar with many spelling and or punctuation errors. Employs unprofessional writing with a significant amount of colloquial language. Organization is not easy to follow and the submission is not written at the graduate level. Or did not submit.

APA Style

Includes sufficient credible sources from peer reviewed journals, academic, and/or

Includes some credible sources from peer reviewed journals, academic, and/or

Includes few credible sources from peer reviewed journals, academic, and/or professional resources.

professional resources. All sources are cited per APA style, including properly cited in-text citations. The reference list is complete and accurate. Wikipedia, Investopedia, and other non- academic resources were not used.

professional resources. Some of the sources are cited per APA style, including properly cited in- text citations. The reference list is complete and mostly accurate. Wikipedia, Investopedia, and other non- academic resources were not used.

Many sources are not cited or incorrectly cited per APA style, including properly cited in- text citations. The reference list is incomplete and inaccurate. Wikipedia, Investopedia, and other non-academic resources were used. Or, did not submit.

Overall Score

Exceeds Performance Expectation 90 to 100%

Meets Performance Expectation 80 to 89.99%

Does Not Meet Performance Expectation 0 to 79.99%