It’s understandable that victims of Ponzi scheme operators like Bernard Madoff and Earl Jones focus mostly on trying to get their money back and on seeing criminals punished. Not being a victim myself (so far) allows me enough detachment to question the mindset of the guilty.
Do these people enter into their occupations planning to defraud investors or do they get tempted to dip into the money or to overstate the returns they generate? Once there is a gap between actual amount invested and the amount investors are told they have, it wouldn’t take too long for this gap to grow out of control.
The part that is most baffling to me is why more Ponzi scheme operators don’t try to run off to some other country and hide. As the end is drawing near and the amount of money still in their control dwindles, it becomes obvious that they will eventually be found out. Perhaps the onset of the recession sped up the demise of the Ponzi schemes enough that their operators hadn’t finalized plans to hide from their victims in some remote corner of the planet.
Maybe there is nowhere in the world to hide from authorities who would try to track down Madoff given the incredible size of his fraud. But in Jones’ case, you’d think that he might be able to take the last $3 or $4 million and try to hide. Maybe he just waited too long until he didn’t have enough money to live on if he ran away.
Another puzzling part of all this is that Madoff and Jones ran their schemes with enough skill that it seems that they could have run a legitimate business and made a very comfortable income. When it comes to the risk of doing jail time, it seems that some are far less risk-averse than I am.