Excuses Don’t Hold Up in Court: Madoff 5 Found Guilty 


John Gill, J.D., CFE
ACFE VP of Education

“The only thing necessary for the triumph of evil is for good men to do nothing.” 

This quote has been attributed to the philosopher Edmund Burke. The verdict this week convicting five of Bernard Madoff’s former employees reinforces this wise observation.

No one reasonably believed that Madoff could have pulled off a multi-billion dollar Ponzi scheme for decades without assistance. The employees’ defense consisted of basically, “we did as we were told and we never knew the whole picture.” Similar defenses were tried during the war crimes trials after World War II, and they didn’t succeed then either.

I hope that the verdict will be noticed by employees who at this very minute are being asked to do things that they believe may be wrong, or at least questionable. Individuals, regardless of where they are on the organizational chart, must be held accountable for their actions. If an employee suspects that her boss is falsifying financial statements, stealing company funds, or lying to the government and does nothing, then she should be held accountable.

Thankfully the jury in this case did not buy the “I just did as I was told” defense. The U.S. Department of Justice is doing the right thing by sending the message to employees who are complicit in fraud schemes that if they know of wrongdoing and don’t come forward, they too can be prosecuted.

However, it’s not just about saying no to fraud; in many cases, it is about standing up to fraud. Both the Sarbanes-Oxley Act and the Dodd-Frank Act provide for substantial rewards for those who blow the whistle on fraud. Last October, the Securities and Exchange Commission (SEC) announced that it had awarded more than $14 million to a whistleblower who provided information that led to a successful enforcement action.

I sincerely hope that this verdict will cause employees across the U.S. and beyond to consider what they are doing or being told to do and ask themselves, “Am I assisting in breaking the law even though I’m just doing what I was told?” If the answer is yes, I hope they will not allow evil to triumph by doing nothing. Ignoring the problem may land them in jail.