Three years of street crime

This article puts the Madoff fraud into some context -- in effect, three years worth of street crime! Of course, how many huge frauds go undetected? If the economy had been growing still, Madoff would still be on his game... .

Just how big is a $50 billion fraud?

The amount of wealth that vanished under Bernard Madoff is roughly equal to that lost to burglars and thieves in the U.S. over 3 years.

By Scott Burns
January 05, 2009
Media accounts immediately labelled the disappearance of $50 billion, masterminded by Bernard Madoff, as the largest fraud in history.

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Three years' worth of crime

One way to measure the extent of the damage is to compare the $50 billion to measures of loss in the FBI's Uniform Crime Reports. In 2007 there were 9.8 million crimes against property in the United States. This included about 2.2 million burglaries, 6.6 million larceny-thefts and 1.1 million car thefts.

I think you'll agree that 9.8 million crimes represent a veritable army of miscreants. In spite of that, Americans' total losses to property crimes in 2007 were a mere $17.6 billion. To be sure, it didn't feel "mere" if to anyone who suffered a burglary. The average loss was $1,991. Nor was it "mere" to be one of the 6.6 million people who suffered a larceny-theft. In those, the average loss was $886.

But when you add all the losses in 9.8 million common property crimes, it's just a fraction of the estimated $50 billion loss authorities blame on Madoff.

Perhaps 2007 was an "off" year for theft?

Well, there was a slight decline in the number of crimes, but not in the amount lost. In 2006, the report shows nearly 10 million crimes against property and losses of an additional $17.6 billion. Similarly, the 2005 report shows nearly 10.2 million crimes against property and a total loss of $16.5 billion.

Add the three years and you get $51.7 billion. Using that value, Madoff has caused losses basically equal to all the losses caused by all the conventional thieves in America for nearly three full years.

Full story here: http://finance.sympatico.msn.ca/Investing/ScottBurns/Article.aspx?cp-documentid=16568160