Criminal Psychology: Analyzing Bernie Madoff's Behavior

This case study delves into the psychology of criminal behavior, focusing on the infamous case of Bernie Madoff and his multi-billion-dollar Ponzi scheme. It examines Madoff's background, the details of his crime, and the psychological factors that may have contributed to his actions. The study references Andrew Kirtzman's biography, 'Betrayal: The Life and Lies of Bernie Madoff,' to provide an in-depth analysis of Madoff's mindset, motivations, and the impact of his crimes on victims. The paper considers the fraud triangle of pressure, opportunity, and rationalization, as well as potential personality disorders such as narcissism and psychopathy, in understanding Madoff's behavior. It also touches on the ethical and legal consequences of his actions, highlighting the complexities of understanding and interpreting such a large-scale financial crime.

Running Head: PSYCHOLOGY
Topic- Psychology of criminal behavior
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PART 1
The paper is based on the psychology of criminal behavior. The report is based on the
case study of Bernie Madoff, the man behind the most notorious financial crime in history, the
mastermind of the Ponzi scheme deception (Andrews & Bonta, 2014). Based on his life history
the book ‘Betrayal-the life and lies of Bernie Madoff’ by Andrew Kirtzman is considered for
critical evaluation of the paper. The book provides an in-depth and personal insight in to the life
of the biggest financial fraud architect. Bernie is been right called as the ‘king of swindlers’ and
he victimized a number of corporations, celebrities and common people who invested all their
life savings trusted that man (Azim & Azam, 2016). The book provides a thrilled experience of a
criminal life that is disturbingly true.
The main purpose of the paper is to provide the reader the true-life coverage of Bernie
Madoff and his criminal behavior. How he used his criminal mindset under the mask of a true
gentleman is surely a topic of consideration in psychology, especially in criminal psychology.
All facts and hypes of Madoff’s life are critically studied in order to have the true essence of
criminal behavior.
The paper covers all possible areas needed to evaluate a psychology paper. It has its
background of the topic and description of the crimes. A brief summary of the financial Ponzi
crime case of Bernie Madoff is already provided above, and the description section will include
summary of index crime, apt terminologies and concepts in regard to psychology (Bartol &
Bartol, 2014). Chronological order of criminal events is mentioned with the main reason of
committing such crime. Criminal judicial system in context of notorious crime by Bernie Madoff
is also highlighted in this section.

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DESCRIPTION OF CRIME
Index crime is basically the eight crimes designed by FBI. They include offences in terms
of willful homicide, robbery, forceful rape, burglary, arson, motor vehicle theft, aggravated
assault and larceny over $50. In this regard the crime committed by Bernie Madoff is clearly a
fraud scam of multi-billions of dollars and comes under larceny index crime (Hornuf & Haas,
2014). He himself was the initiator of his fraud triangle of pressure, opportunity and
rationalization. The panic redemption of the financial crash of 1987 pressurized Bernie to borrow
from new investor capital in order to pay the existing investors and show falsified big returns
instead. The sell-off associates of the crash and slow return on recovery are the main causes
behind his ultimate motive of fraud (Lewis, 2015). He also got the opportunity to cheat as
nobody doubted or ever questioned his intensions. A number of large investment banks and
financial institutions just wanted to invest in his company and Madoff also refused to disclose his
return policies (Kirtzman, 2009). False financial statements show constant growth and high
returns and Madoff used this trick to investors and easily fooled them. The rationalization that
everyone runs after money and are greedy is another aspect of increasing the Ponzi scheme
(Lewis, 2015). He many times put warning signs to the investors mentioning that investments
could be risky and could result in losses but no one was ready to miss this opportunity of easy
return. All these lead to the biggest financial crime of 2008.
The major stock and securities fraud of the Madoff Investment scandal show the dark side of the
most honored man of NASDAQ and Wall Street firm. After the multi-billion-dollar fraud caused
by the Ponzi scam Bernie Madoff himself allegedly confessed his guilt to his employees and
mentioned that the asset management of the firm is an extended version of a large Ponzi scam
and nothing else. No one believed his confession at the very first time as the man in their mind is

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not the man who can be the master mind of such a big scam (Reurink, 2018). To the world and to
the people who knew him, he was a kind and generous man. He was a charitable man to
strangers and he was a personality who will never take risk on people’s money.
But in December 2008 he confessed to all that he lied. He believed in himself and in his
thought that he could have everything simply by lying. He was aware of the end consequences
but his greed to be rich stopped his ethical morality to act but soon after his arrest he apologized
in the court and was ashamed of his misconduct. He was aware of him doing wrong and thought
that the Ponzi scheme will end shortly but he was not able to extricate as it was difficult and
proved impossible and he realized well that he will be arrested for sure. He was called the
‘Jewish T-bill’ who have swallowed all the money himself (Stolowy et al., 2014). Some of his
fraud victims even committed suicide and even his family members were victimized by him. He
is called a good man who did bad things. There was no issue of madness or criminality in his
career as well as personal life background. But his childhood was full of scars and black spots.
His parents were proven foul in stock trading, he was humiliated at every sphere of lie starting
from school to his love life as well. But keeping all things behind he was excellent in
manipulating and money making, he gained his stature back he once lost in his childhood. Even
when he was not satisfied with the amount of money he was making, he simply invented it and
started falsifying financials. And the aftermaths are well known by the world, the biggest Ponzi
scam in the history of finance.
Bernie’s childhood could be blamed to some extent for his emotional disconnection and
lower rate of empathy. Study of Madoff’s mind type reveal that they have some personality
disorders mainly narcissism and they feel good by pulling the wool over eyes of other people.
Bipolar disorder may be linked to the planned Ponzi scam and is a pure case of psychopathy or

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craziness. This coldness psychopathy disorder lead to anti-social repeated crimes and Madoff
was one of the white-collar psychopaths (Matulich & Currie, 2016). When the money comes in,
the power increases and it pushes the scammers to repeat the crime. Some criticized him to be an
obsessive control freak and have double personality syndrome. Such people have charm to please
others and can gain trust of others in a very easy manner. But in reality, such man is least
regretted about their misdeeds and lack empathy. Actually, personality and crime are inter-
related to each other and it is the personality disorder that leads to crime in most of the cases.
A number of speculations about the great Ponzi criminal Bernie Madoff is being made
after his arrest but there is no exact theoretical support that could explain his misconduct
exclusively. Psychological issue is definitely there but no one theory could provide support to his
behavioral changes and why and how he mastered such a great Ponzi scam himself. A 20-year
imprisonment for a 70-year-old man is not justified because the past of his life has already been
missed and his guilt is punished when he realized his misdeed and was sorry for it, though not
from the heart, if guessed (Pontell, Black & Geis, 2014). Lives of thousands of people have been
ruined and ended as well, this man and his psychology is really difficult to understand and is
tough to interpret as well.

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References
Andrews, D. A., & Bonta, J. (2014). The psychology of criminal conduct. Routledge.
Azim, M. I., & Azam, S. (2016). Bernard Madoff’s ‘Ponzi Scheme’: Fraudulent Behaviour and
the Role of Auditors. Accountancy Business and the Public interest, 1(1), 122-137.
Bartol, A. M., & Bartol, C. R. (2014). Criminal behavior: A psychological approach. Boston:
Pearson, c2014. xxiii, 644 pages: illustrations; 24 cm..
Hornuf, L., & Haas, G. (2014). Regulating fraud in financial markets: can behavioural designs
prevent future criminal offences?. Journal of Risk Management in Financial
Institutions, 7(2), 192-201.
Kirtzman, A. (2009). Betrayal: The life and lies of Bernie Madoff. Harper.
Lewis, M. K. (2015). Understanding Ponzi Schemes: Can Better Financial Regulation Prevent
Investors from Being Defrauded?. Edward Elgar Publishing.
Matulich, S., & Currie, D. M. (2016). Handbook of Frauds, Scams, and Swindles: Failures of
Ethics in Leadership. CRC Press.
Pontell, H. N., Black, W. K., & Geis, G. (2014). Too big to fail, too powerful to jail? On the
absence of criminal prosecutions after the 2008 financial meltdown. Crime, Law and
Social Change, 61(1), 1-13.
Reurink, A. (2018). Financial fraud: a literature review. Journal of Economic Surveys, 32(5),
1292-1325.
Stolowy, H., Messner, M., Jeanjean, T., & Richard Baker, C. (2014). The construction of a
trustworthy investment opportunity: Insights from the Madoff fraud. Contemporary
Accounting Research, 31(2), 354-397.