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What Madoff, Minkow and Ponzi now have in common

They've been inducted into the Con Artist Hall of Infamy, a website designed to be comprehensive educational tool to help readers understand and prevent white-collar crime, the site's founders say.

July 02, 2009|Tiffany Hsu

It's not the first time Bernard L. Madoff has had his name in lights this year.

But with his induction into the newly launched Con Artist Hall of Infamy, it may well be the first time that his exploits will serve a constructive purpose.

The gallery of rogues at, which goes public today, is designed as a comprehensive educational tool to help readers understand and prevent white-collar crime.

The nonprofit website is the brainchild of San Francisco financier Warren Hellman, founder and chairman of the Hellman & Friedman private equity firm, and Arthur Rock, a venture capitalist who was among the first investors in Intel Corp. and Apple Inc.

Halls of fame are usually reserved for rock stars and baseball giants, but in the vein of the National Museum of Crime & Punishment in Washington, D.C., or the "America's Most Wanted" television show, Rock and Hellman wanted to include fraudsters who made their own scandalous mark.

There are 35 inductees in the Hall of Infamy, and Madoff, 71, the former Nasdaq chairman who was sentenced Monday to 150 years in prison after pleading guilty to swindling investors out of billions of dollars, is the most current crook.

Charles Ponzi, the namesake of the Ponzi scheme, is also a member, thanks to his postal coupon scam in the early 1900s.

Then there's John Law, a Scottish playboy and French minister of finance who bankrupted thousands of Parisians in the early 18th century.

And who could forget local-boy-made-bad Barry Minkow, the Reseda-raised wunderkind who used fake contracts, credit card fraud, mob money and bank loans to pass off his carpet-cleaning business as a $300-million success in the '80s.

Current and future inductees are judged using one of four criteria: That they either stole or caused shareholders to lose huge sums; displayed a colorful character; committed a crime that resonated throughout an entire industry or compelled new legislation; or were proved guilty in court.

There are no women in the hall -- not yet, anyway.

"Maybe they're too smart to get caught or they're actually too honest," Hellman joked.

Each profile includes a detailed description of the con and an assessment of the wreckage, as well as the outcome of each case.

Minkow, for example, spent seven years in federal prison and now helps nab crooks at his Fraud Discovery Institute.

A major focus of the website is to warn business school students of the consequences of sneaky behavior.

"The emphasis in business schools is more and more on teaching ethics," said Rock, who funds a namesake Harvard Business School entrepreneurship program. "But there's not only the carrot, there's also the stick, which the schools don't talk about much."

The site includes a Web page called "Art of the Con," which examines the patterns of scams, as well as a "Con Watch" blog. There's also "The Con Timeline," which shows cons clustered around noteworthy periods in the stock market's history.

Hellman said he and Rock had been fascinated with the subject of con artists for years, marveling at the magnitude of scams that were "so amazingly clever" and wondering how to stop them from happening in the future.

Though Hellman and Rock plan to add more profiles, they hope the website helps prevent scammers before they end up joining Madoff in the slammer.

"If these guys had devoted their energies to useful things, the world could be a lot better off," Rock said.


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