So Bernie Madoff was sentenced to 150 years in prison for bilking investors out of billions of dollars in a Ponzi scheme.
Judge Denny Chin described Madoff's crimes as extraordinarily evil after many of his investors' life savings were wiped out. Legal experts predict that Bernie won't do time in one of those comfy Club Feds. Instead, they expect him to join other “evil doers” in a maximum security prison where his cellmate is likely to be Bubba or a Charles Manson.
The night before the French peasantry put Marie Antoinette's head on the chopping block, she was said to have remarked that “the only things that are new are those that have been forgotten.”
Looking back to the 1950s and ‘60s, I was reminded of another Bernie, Bernie Cornfield, master scammer and founder of Investors Overseas Services
Halcyon Days for Finance
From the 1950s and until the early ‘70s, the United States government financed western European socialist states — West Germany, France and England — by stationing millions of American service personnel and their dependants in these countries.
The American public was told that the troop presence in Europe was to deter the Russians from invading these countries.
More than 300,000 Army and Air Force personnel were stationed in Germany along with 700,000 wives, children and other dependents plus civilian workers. The American military built huge compounds with plush PXs, grocery stores, movie theatres, barber shops and clothing stores.
During my time in the Air Force, I met many service personnel who had been stationed all over the world but never had left “American soil.”
The PXs and their lavish surroundings were meant to discourage the GIs from spending too much of their money on the local economy.
Back in 1967, when Americans were starting to sour on Lyndon Johnson's War of Attrition in Viet Nam, which used to be two words, it was estimated that the Americans in Germany were spending an average of $100 per person on the local economy.
Bernie’s Empire Building
That made a staggering sum of $100 million a month in greenbacks going into the German economy.
In the 1960s, Bernie Cornfeld formed a mutual fund selling company, Investors Overseas Services (IOS) with principal offices in Geneva,
although it had been incorporated in Panama.
Although the headquarters was in Switzerland, the main operational offices of IOS were in Ferney-Voltaire, France, 20 minutes across the French border where Bernie owned a splendid home and surrounded himself with a bevy of beautiful women including Victoria Principal who went on to star in the television series, “Dallas”
At its peak, IOS employed nearly 25,000 mutual fund salesmen who plied their trade in PXs and service clubs throughout Europe. Their mutual funds also invested in real estate, which was illegal at that time in the United States.
The horde of salesmen turned their attention to civilian investors all over Europe, especially Germany and Italy.
These people were still recovering from the ravages of World War II, and until this time they had no access to investment in mutual funds.
Bernie's slogan was “Do you want to be rich?” He called his company “people's capitalism.”
In 1969, the bottom dropped out of the international stock market and the U.S. real estate market. IOS stock took a serious fall.
At this point, American financier Robert Vesco took control of IOS. He promptly evicted Cornfeld from the management and looted the company
of more than $200 million, which he transferred to Costa Rica and other parts of Latin America.
During the ‘70s, Cornfeld fled Europe. He settled in Beverly Hills where he became friends with Hugh Hefner and moved into the fabled Greyhall Mansion that once had been leased by Douglas Fairbanks. Later, he became chairman of a land development company in Arizona, and he also owned a real estate company in Los Angeles.
Cornfeld suffered a stroke and died of a cerebral aneurism on Feb. 27, 1995 in London.
Mr. Hawkins may be contacted at rjhculvercity@aol.com
