Business
Off the Books
Off the books is a term meaning that your money is not being recorded and can therefore not be tracked. There are many jobs that don't have to keep a record of their money - off the books - including: construction workers, painters, gardeners, and other manual laborers. These people are actually hiding their spending from the federal government. You don't have to pay any taxes or social security if your money is off the books. You are also able to hire illegal workers. This barter system becomes tricky because by hiring the illegal workers, you don't have to pay them as much as you would a normal worker, and can keep most of the profits for yourself. Yet you are still keeping your employees happy. This secret, under the table transaction, is sly, but not always illegal. However, in order for this to work, both parties must remain in business in secret.
Madoff and his Ponzi Scheme
Bernie Madoff, a now infamous man, was discovered running a ponzi scheme in December of 2008. A ponzi scheme is a term used in business when you tell a client you are investing their money, when you are really pocketing their money and paying them back year by year. The secret to a good ponzi scheme is to make it exclusive, to make people want to invest with you. Madoff made all of these checkpoints to make sure that you were making a lot of money and weren't bog spenders. After collecting the money from people, Madoff would pay them back a portion of it every year, to make them think that they were recieving good income. In actuality, Madoff was pocketing this money and only investing it in himself. This created huge problems because at some point someone is going to want their money back. When they find out that their money is gone - either spent, or given to pay back someone else - they can't do anything about it because it no longer is theirs. Ponzi schemes collapse due to a multitude of things. A ponzi scheme needs investors with a steady flow of money coming at them all the time. If there aren't enough recruiting, or there is a mass of people pulling out and wanting there money, the jig is up and the scheme is found out. SEC is a company that investigates ponzi schemes, trying to get as much of the money that was "invested" back from those that have fallen victim to this trickery. In the case of Bernie Madoff - who is serving a 150 year sentence - he was able to orchestrate a multi-billion dollar ponzi scheme. This secret scheme had victims going bankrupt, and in some cases, losing their houses.
Sources
Website -
"Ponzi" Schemes." U.S. Securities and Exchange Commission (Home Page) . U.S. Federal Government, 2008. Web. 27 Apr. 2011. <http://www.sec.gov/answers/ponzi.htm>.
Images -
"Google Images." Google . SMSEO Contributers, 2009. Web. 27 Apr. 2011. <http://www.google.com/imgres?imgurl=http://socialmediaseo.net/wp-content/uploads/2010/04/tri-energy-ponzi-scheme.jpg&imgrefurl=http://3Disch&um=1&itbs=1&iact=rc&dur=235&page=1&ndsp=22&ved=1t:429,r=39&ty=25>.
"Google Images." Google. Oct. 2008. Web. 27 Apr. 2011. <http://www.google.com/imgres?imgurl=http://c1.ac-images.myspacecdn.com/images02/42/l_389cb7dae2594c7b8d901712b6ace940.jpg>.
Website -
"Ponzi" Schemes." U.S. Securities and Exchange Commission (Home Page) . U.S. Federal Government, 2008. Web. 27 Apr. 2011. <http://www.sec.gov/answers/ponzi.htm>.
Images -
"Google Images." Google . SMSEO Contributers, 2009. Web. 27 Apr. 2011. <http://www.google.com/imgres?imgurl=http://socialmediaseo.net/wp-content/uploads/2010/04/tri-energy-ponzi-scheme.jpg&imgrefurl=http://3Disch&um=1&itbs=1&iact=rc&dur=235&page=1&ndsp=22&ved=1t:429,r=39&ty=25>.
"Google Images." Google. Oct. 2008. Web. 27 Apr. 2011. <http://www.google.com/imgres?imgurl=http://c1.ac-images.myspacecdn.com/images02/42/l_389cb7dae2594c7b8d901712b6ace940.jpg>.
