 $65 billion. That's how much Bernie Madoff took his victims for, $65 billion. To understand the mystery of Bernie Madoff's terrible success, you first must credit the con man. In 1920, Charles Ponzi created a financial scam that bears his name today. For a short time at least, his scheme became nothing less than a craze. Ponzi brought in millions of dollars in less than a single year, and also within that same year, Ponzi's con collapsed and he would eventually go to prison for it twice. 88 years after Ponzi's stroke of evil genius, Bernard Bernie Madoff was arrested on December 11, 2008 for operating the biggest Ponzi scheme in history, having built his victims out of an estimated $65 billion if you include fabricated gains on investment, gains that clients never received, $65 billion. Enough to have funded the American War in Afghanistan at its peak for a full year. The actual loss amounts will probably never be known, but actual monies Madoff received from clients probably fall somewhere between $12 and $20 billion. Since bleeding guilty in March of 2009, Madoff has been serving a 150-year sentence the maximum allowable term for his crimes. Although much still remains unknown or is yet publicly unexplained about the details of Madoff's crimes, we do know that Madoff was engaged in his systematic thievery since at least the early 1990s and possibly as long as a decade before then. How could Bernie Madoff have operated successfully for so long and still have been bringing in new investors, that is victims, literally within days of his self-planned arrest? You might be familiar with the ancient street scam, the three-card Monty. Whenever I'm explaining the workings of the Monty, an effective hustle that's been used to fleece victims for more than 150 years, I often like to say that the method is not the trick. What I mean by this is that the sleight of hand maneuver that invisibly switches two cards in the Monty game, while critical to the deception, is a useless device without the accompanying psychology, the theater if you will, without the emotional confidence that the operator instills in his mark. The same was true for Bernie Madoff, whose victims number in the thousands from elderly widows to massive banking institutions. Bernie Madoff's greed and pathology would have gotten him nowhere without the psychology of his affinity scheme, a deadly game that built trust based on tribalism, created desire based on the perception of exclusivity, built confidence with primitive monthly statements printed on dot-matrix printers, mailed to widows and financial titans alike, that detailed the stocks and securities they thought they owned, when in fact they owned nothing of the sort. When it comes to the three-card Monty, the operator works hard in order to take your money. Professional grifters like the Monty tosser work with specialized skills, skills he has mastered over countless repetitions. Yet his sleight of hand skills are in fact the very least of his arsenal. His real weapons are those of psychological manipulation and outright deception, weapons that have been honed and handed down by generations of con men before him. Deception is his specialty, and it's my specialty as well. In my reading of the Madoff Ponzi scheme, it is abundantly clear to me that Bernie Madoff worked hard to build his clients and friends out of billions of dollars. The vaguely sympathetic notion that has been put forward by some, including Madoff himself, that he was somehow hoping to make up for some early losses and intended to eventually return to an honest accounting, is a bald-faced lie. Although it might be conceivable that the fraud began in order to protect his ego and conceal some legitimate investment losses, any such intentions had to have faded rapidly from his motives and vanished a very long time ago. Along with any sense of human decency, there was much less empathy for his wiped out victims. Madoff knew sooner, not later, that he could not ever recoup what he was taking from people, and he took money in bad, very bad faith. In fact, he continually deposited all incoming funds into his Chase Bank account and never invested any of it. Yet Bernie Madoff was still taking money from elderly widows within weeks of his eventual arrest. And had it not been for the economic crash of September 2008, Madoff would certainly have tried to keep the scam going indefinitely for as long as he possibly could. We do know that Madoff kept his Ponzi scheme physically and factually isolated far away from his other operations and employees, literally on another floor of the famed lipstick building that housed his offices on 3rd Avenue at East 53rd Street on Manhattan's East Side, a building I have walked by literally countless times in my life. Madoff, with the help of how many co-conspirators we still might never fully know, regularly generated false statements of income to his clients, which in turn, by the way, his clients paid taxes on. Unlike Charles Ponzi, Madoff kept the returns on his clients' investments reasonable between 8 and 14%, albeit the fact that he never experienced downturns even in a down economy, raised warning flags to a few attentive experts. He used feeder funds as layers of protection and obfuscation and rewarded managers generously of those funds for sending investors his way. And he actively solicited business on an ongoing and aggressive basis, making his investment funds seem all the more attractive, not only by way of its apparent safety and steady, seemingly conservative profitability, but because of the carefully manufactured and maintained illusion of exclusivity. By turning away the occasional investor with apparent arrogance and disregard, I don't need your money, he was known to loudly declare to prospects who asked too many questions, Madoff helped to build his myth and by so doing, built the desirability of his fund. Bertie Madoff is a criminal, a con man, a predator, and an expert deceiver who worked hard to maintain his deceptions. I often remind my audiences that being fooled is not the same as being a fool. As a professional magician, I don't get paid merely to fool the stupid, the greedy, or the gullible. On the contrary, I get paid the fool's smart, observant, reasoning people who, unlike when they encounter a professional scam artist, are immediately put on notice they're likely to be fooled since they know I'm a magician. In fact, it makes no more sense to blame the victims of a Ponzi scheme, a street con, or a psychic scam than to attribute the effectiveness of a magic trick to the stupidity or inclination toward gullibility of my audiences. Just a few nights ago, my friend Richard Dawkins, the evolutionary biologist, who greatly enjoys magic, along with several other skeptic friends and colleagues, came to see me perform at the Magic Castle in Hollywood. At one point, in the midst of my performance, Richard suddenly exclaimed quite loudly, I might add, Well now, how the hell did you do that? That was great. An instantly quotable moment as my friend DJ Grothy, president of the Randy Foundation, commented at the time, But I don't think one would be inclined to attribute my ability to fool Professor Dawkins on his stupidity or gullibility. And nor should we blame the victim of a scam carried out by an expert, much less a ruthless one. So when dealing with professionals, be it magician Monty or Madoff, it would be a mistake to blame the victim of a card trick, a con game, or a billion dollar Ponzi scheme. To blame the victim offers neither insight nor lesson, and teaches us little about what's occurred. I once knew a professional magician who was taken in by the venerable Jamaican tourist scam, standing right in front of Grand Central Station. It's a scam in which the victim's motive amounts to nothing more than pure altruism. What lesson does that teach us? Yet in the immediate aftermath of the Madoff affair, there were no shortage of voices lining up to blame the victims of Madoff's predations for their own terrible losses. New York Times business columnist Joe Nocerra addressed the Madoff case for the first time on March 13, 2009, almost three months to the day after Madoff's arrest with a piece that was topped with this headline. Madoff had accomplices, his victims. Well, no confusion there. On June 29th, Nocerra's headline was Madoff victims, get over it. By July 4th, however, even Mr. Nocerra had to back away from some of his more scrooge-like inclinations, all the no-workhouses, all the no-prisons, as more and more stories came the light of the devastation left in Madoff's wake. Quote, The victims of Bernard L. Madoff, who was sentenced to 150 years in prison on Monday for his heinous financial crimes, deserve our sympathies, Nocerra finally admitted. And he continued. Quote, Madoff's Ponzi scheme was revealed the victims' lives have taken heartbreaking turns. Cancer patients who can no longer afford their treatments, people whose retirements have been destroyed, elderly parents who have had to move in with their children. Well, better late than never, Joe. But Joe Nocerra is far from alone in a tendency to blame the victim, Madoff sympathizers, for lack of a better term, who want to somehow believe that he backed into becoming a con man trying to make up for some market reversals, or also, in essence, blaming the victims because of the failure of imagination that one experiences when trying to grasp the monstrosity that Madoff is. Greg O. McCrary, a former special agent with the FBI, who constructed behavioral profiles, was quoted in The Times comparing Madoff to a serial killer. Some of the characteristics you see in psychopaths are lying, manipulation, the ability to deceive, feelings of grandiosity, and callousness toward their victims. That grandiosity, the power of life and death, the power of a God applies to Madoff as much to serial killers, according to McCrary, who also says Madoff is getting the same thing. He's playing financial God, ruining these people, and taking their money. There were valid lessons to be drawn from the Madoff disaster, the failed responsibilities of the SEC and other regulators notwithstanding, that penetrate beneath the shallow gloss of a pseudo-exploitation based merely on the supposed greed and stupidity of its victims. These are the lessons that magicians have long sought to teach to skeptics, scientists, academics, and investors alike, and continue to demonstrate every day in our work for, after all, we do not get paid merely to fool the stupid. Lesson one is this, anyone can be fooled. Recently, when I posted on Facebook news of the conviction of New York City psychic Sylvia Mitchell on charges of having built several of her clients out of some $150,000 an amateur magician posted in the comments, and I quote here, how is it cheating them out of money? It's their own stupidity that got them into the situation in the first place. Yeah, well, take note. The moment you think you can't be fooled, you're lining up to be the next victim. And when my victim-blaming Facebook commenter eventually gets taken down, I'll try to be a bit more empathetic towards his plight. Because lesson two is this, that before we blame the victim, we must first and always credit the con man. My name is Jamie Ian Swiss, and I am the honest liar.