A new book by financial journalist Erin Arvedlund says that Bernie Madoff ran his massive Ponzi schemes using nothing other than an AS/400. The book, called “Too Good to be True: The Rise and Fall of Bernie Madoff,” is out this month.
To be fair, this isn’t the first time the possibility has been mentioned. After doing a quick search, I found that Alex Woodie at IT Jungle wrote about it months ago after Fox Business News reported on it.
Essential to the fraud was Madoff’s old clunker of a computer, an IBM AS/400 that he and select other employees could use to manipulate prices, the book says.
“Madoff and other employees on 17 punched in the stock prices on the IBM AS/400 and would just enter stock prices that would square with his fake returns,” Arvedlund says, after inexplicably telling us one page earlier that “no one touched” the computer but Madoff.
You’ll learn a lot by reading “Too Good to Be True.” One solemn message is that there are a lot of crooked rich people. Another is that there are a lot of dumb rich people, too.
My guess is that most readers of this blog would be less upset that an AS/400 was used in this scheme than the fact that the book author and reviewer referred to it as an “old clunker of a computer.” Either way, in her article, Woodie interviewed Rich Loeber, the president of Kisco Information Systems, which has Madoff associates in its marketing databases and may have sold software to Madoff. Loeber concluded that the AS/400 certainly can’t take the fall here.
“I don’t see how anyone can control how the hardware is used,” Loeber says. “Over the years, I’ve given this much thought and my final conclusion is that computers are morally neutral. How they are used is where the morals come in, and that is all controlled by people. I would not be surprised that AS/400s are used in all sorts of immoral ways, Madoff’s company just being one such example.”