The iSeries Blog

Aug 17 2009   1:16PM GMT

The AS/400: Good for crime

Mark Fontecchio Mark Fontecchio Profile: Mark Fontecchio

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.

From a Bloomberg review of the Arvedlund book:

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.”

8  Comments on this Post

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  • Yorkshireman
    The book is written by a journalist, so it won't be true or accurate. Clunky old . ... (fill in any computer - Apple, Amstrad, Tandy, IBM.. ) Hey - at least he wasn't using a clunku old sheet of paper..
    6,085 pointsBadges:
  • slateken
    My initial reaction was that the AS/400 should face the death penalty. Then I realized that IBM has already long-ago taken care of that for us...
    230 pointsBadges:
  • slateken
    My initial reaction was that the AS/400 should face the death penalty. Then I realized that IBM has already long-ago taken care of that for us![A href=""]
    230 pointsBadges:
  • oldpgmr
    at least he could not claim that his scams & thefts were the work of viruses, security breaches, or hackers on this “old clunker of a computer.”.
    75 pointsBadges:
  • SAPjava74
    There's some interesting history about how IBM technology has been used for purposes other than human progress. Take a look at the [A href=""]IBM & the Holocaust book[/A]. IBM's equipment became a major enabler to the Third Reich and their "perfect plan". It is quite interesting and eye-opening reading material.
    0 pointsBadges:
  • HimanshuS
    This only proves that AS/400 is a powerful business machine, and can be a boon for your business if you use it for right purposes. by the way, in the movies that I have seen, laptops and PCs have been used for crimes :)
    40 pointsBadges:
    Oh no! A computer that allows people to punch in numbers? I guess the new and improved systems don't allow any human interaction. They must just sit there and use electricity.
    0 pointsBadges:
  • Jessieclark
    How can anyone view this as a fall for the AS400?! - This is a machine which is most well known for its secure architechure - that actually earned the trust of Madoff, the master mind of the ponzi scheme, to perform his most secretive business transactions.
    0 pointsBadges:

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