Madoff's willing enablers

Here's hoping the authorities looking for the missing Madoff billions takes a look at the feeder funds who did his bidding.

(Via CJR and Bloomberg)

The feeder funds became Madoff’s ad hoc sales force. The payoff was the steady flow of fees. Every billion dollars invested in Madoff generated $150 million in paper profits a year for clients, based on a 15 percent return.
If a fund charged its clients 1 percent of the assets under management and 20 percent of the gains, as the largest one did, that translated into $41 million in annual fees.

Assuming Madoff didn’t do any investing on behalf of his clients, as investigators now suspect, the feeder funds were, in effect, being paid out of principal, which would have been depleted after 15 years.
In other words, much of the money invested in Madoff through feeder funds wound up in the pockets of fund managers.

Their defense is comical: We knew he was doing something illegal, but we never thought it was a Ponzi scheme!!!