Madoff may have been outed earlier

With Bernard Madoff safely behind bars,Mother Jones thinks that his misdemeanors may have been highlighed on previous occassions.

In May 2001, writing in MAR/Hedge, a trade publication covering the hedge fund industry, Ocrant reported that finance experts were "baffled by the way the firm has obtained such consistent, nonvolatile returns month after month and year after year." They were equally puzzled by their own inability to replicate Madoff's success. The story raised the possibility that Madoff was padding his clients' returns with profits from another part of his business, which operated not as a hedge fund but as a so-called market maker—a middleman for the purchase and sale of securities. Madoff denied this at the time, though Ocrant remained convinced that fraud lurked behind the surface of Madoff's thriving enterprise. Even so, he never fathomed that Madoff's fund was nothing more than a Ponzi scheme, paying returns to investors from their own money rather than from profits. For a period of at least 13 years Madoff made no investments at all, according to the Securities and Exchange Commission (SEC). "I just couldn't believe it!" Ocrant says. "I couldn't believe a Ponzi scheme could operate that long."

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