Looks like a classic "Ponzi" scheme, in which earlier investors are paid an outsized "return" on their investment using only the money contributed by later investors. The perpetrator does not actually invest the money entrusted to him, so there is no real income. Later investors are drawn into the scheme by testimonials from the earlier investors.

Eventually, these schemes have to collapse, since there isn't an infinite number of potential investors. When the money flow stops, folks start asking for their money back and the whole thing unwinds.

What's amazing is that people keep getting taken in by these schemes. The first such scam was perpetrated by Charles Ponzi (1882-1949)just about 90 years ago. Madoff's activities are remarkable in their sheer scale and the length of time it took for the thing to blow up.

BTW, there is no suggestion that the NASDAQ stock market was involved in this in any way. It was purely a project of Bernard Madoff.

Yahoo Madoff Story

Wiki article on Ponzi Schemes

Yes, I think this thread does belong below the line.

Regards,
John