Sources: Madoff Hid $ in DOE Budget

April 1, 2009 (GBN News): According to GBN News sources, Federal authorities have located close to half a billion dollars from convicted Ponzi schemer Bernard Madoff. The money, these sources say, was discovered in the budget of the NY City Department of Education, and had been transferred to the DOE just before Madoff was arrested last December. It is unclear just how Madoff was able to transfer the money to the DOE, but he allegedly planned to later recoup the money by having it returned to one of his relatives in the form of no-bid contracts.

J. Fredrick Runson, Dean of the Manhattan University Law School and an expert on educational Ponzi schemes, was impressed. “The diabolical beauty of all this is that Madoff managed to hide the money in plain sight," Dr. Runson told GBN News. "It’s right there in the budget, but since there is no real oversight over the DOE, it was extremely unlikely that anyone would find it.”

Dr. Runson was asked how Madoff could know that the money would remain intact, and not be spent by the DOE before he could ultimately get it back. “That’s the real genius in this plan,” he said. “He apparently stipulated that the money be specifically designated for class size reduction. That way, he could be certain that the DOE would never use it.”