ye olde scamme

Charlie Stross feels that the Bernie Madoff case has put the sequel to Halting State behind the curve of criminal weirdness. I disagree strongly. Madoff was an American classic, as perfect an artefact of his society as aerosol cheese or moon landings. His fraud was a simple, well-executed example of the tried and trusted Ponzi scheme, a crime which was actually invented in the US by the eponymous Charles Ponzi in the 1920s. Like Ponzi's original, Madoff's homage surfed on the history of US immigration; Ponzi sold his paper to recent immigrants who trusted him as a fellow-Sicilian, Madoff to people who trusted him as a fellow Jewish New Yorker and a Wall Street figure in good standing.

In fact, his crime looks almost old-fashioned; the style of it is reminiscent of the 1950s, pitching an inside track on his wholesale brokerage to rich old Jews at country clubs and Miami Beach hotels. It could be a scene from The Producers. No computers; the investment operation, and fraud, ran from a cluttered office and a suburban accounting practice. It was all handshakes, and for the more sophisticated marks, the tacit understanding that his returns came from front-running his wholesale clients. You can't con an honest man, etc.

The only new element in it was brute size, but then, when has that not been an American tradition?

Compare the Sergei Aleynikov case; now that is thoroughly modern. The guy codes in Erlang, for the sake of all that is holy. And the most telling detail is that nobody is certain if there has even been an actual fraud. No money is missing, and the source code in question is so proprietary it's impossible to say if it's worth anything. Is it possible to write an EULA that would make you eat your own head if you looked at it? That really is the size of it; he's accused of violating software copyright, the most modern of possible crimes.

This is a marker of the times; things happen, but the motives are so overdetermined that it is impossible to pin agency or blame with any accuracy. Outrages and outages occur, but nobody squeals, as with the Israeli air raid on the "Box on the Euphrates" or the Libyan ELINT zorch of the Thuraya satellite they were part-owners of. The Jerome Kerviel case had a similar taste; he's on the out, and is suing SocGen for unfair dismissal. Even Bernie Madoff would have called that chutzpah.