Banks and Hedge Funds Bernie Madoff

Madoff: Banks and Hedge Funds Knew About Scheme

Bernie Madoff has made headlines again by claiming that hedge funds and banks knew of his ponzi scheme. This is a powerful accusation from the convicted fraudster as it implies that banks and hedge funds were complicit in his multi-billion dollar fraud.

For 26 months since Bernard Madoff's multi-billion dollar Ponzi scheme unraveled -- one of history's great financial villains -- has claimed he acted alone, reports CBS News correspondent Jim Axelrod.

Now he's telling the New York Times certain banks and hedge funds were "complicit" in his fraud, calling it "willful blindness" in an interview published Feb. 16. "They had to know. But the attitude was sort of, 'if you're doing something wrong, we don't want to know,'" Madoff said in the interview.

"American law treats willful blindness the same as actual knowledge -- you can't shut your eyes and avoid having knowledge attributed to you that you would have known had you opened your eyes" said Columbia Law School professor John Coffee.
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