z BIG NEWS: z Auto Bailout z | z Gas & Oil z | z Warren Buffett z | z The Fed z | More... Log In | Sign Up May 21, 2009 z Home z Politics z Media z Business z Entertainment z Living z Style z Green z World z Chicago z Comedy 23/6 z Video z Blogger Index z Archive z Make HuffPost Your HomePage z Get Email Alerts z Twitter: Follow Us B. Jeffrey Madoff Founder of Madoff Productions Posted March 10, 2009 | 05:29 PM (EST) The Most Dangerous Neighborhood in the United States Read More: Allen Stanford, Bernard Madoff, Fbi, Fraud, Paul Greenwood, Ponzi Scheme, President Bush, Wall Street, Business News digg stumble reddit del.ico.us ShareThis Search HuffPost Be the First to Submit This Story to Digg Get Breaking News Alerts SIGN UP never spam z Share z Print z Comments "Be careful." "Keep your wallet safe." "Don't get your money stolen." "Stay out of dangerous neighborhoods." My parents used to say that to me when I was first going out on my own. I never got the definition of what a "dangerous neighborhood" was - you were just supposed to know. It was a place where people preyed on you. Predators, like jackals circling, waiting to pounce, ready to take your hard earned money from you. That's what happens in dangerous neighborhoods. That's why you should stay away from places like that. As I got older, I wondered what exactly is a "dangerous neighborhood"? Most of us grew up assuming it was an area where poor people lived, people who didn't dress well, didn't have nice homes, didn't have nice cars, didn't have any interest in working for a living. People who just take and assume they'll never get caught or even worse, don't care if they do. However, that is a highly subjective criteria. How does one quantify that and determine the kind of place where you will most likely be separated from your money? The Federal Bureau of Investigation provides statistics that may help us gain insight into where and how you are most likely to have your money stolen. The FBI defines robbery as the taking of anything of value from a person by force or threat of violence. Robberies cost victims an estimated $588 million in 2007. The FBI defines larceny-theft as the stealing of any property or article that is not taken by force or by fraud. In 2007 there were an estimated 6.6 million larceny- thefts, costing victims an estimated $5.8 billion dollars. Securities fraud refers to deceptive practices in the stock and commodity markets including Ponzi schemes, high yield investment and hedge fund fraud and just about any way it is possible to lie about the promise of big returns on a variety of investment instruments. In 2006, the most recent year a total was listed, the FBI estimated losses at $40 billion. Corporate fraud cases involve accounting schemes designed to deceptively manipulate the stock price so the value of a corporation remains artificially inflated based on fictitious performance indicators. In addition to significant financial losses, corporate fraud can cause substantial damage to the U.S. economy and investor confidence. On July 9, 2002, President George W. Bush created the Corporate Fraud Task Force. The Task Force was formed in response to a number of high-profile acts of fraud and dishonesty that occurred in corporate executive suites and boardrooms across the country. The brunt of these schemes was borne by innocent corporate employees, pensioners, and investors--whose futures and fortunes were harmed, and at times, even shattered, by corporate leaders they trusted with their savings. Since 2002, the President's Corporate Fraud Task Force has worked hard to hold wrongdoers responsible and to restore an atmosphere of accountability and integrity within corporations across the country. [The Task Force] has encouraged corporate transparency and self-regulation. ("The Corporate Fraud Task Force" 2008 report) How has that self-regulation worked out? Not so well. From 2001 to 2007, corporate, securities and investment fraud cases, have increased of 37%. Bernard Madoff's alleged Ponzi scheme totaled $50 billon - that is more than the combined FBI total for all the robberies, theft and securities fraud reported in 2007. Javier Cremades, president of law firm Cremades & Calvo-Sotelo, announced at a news conference in Madrid: "Our calculations are that at least three million people were affected by the Madoff affair." The estimate is based on information collected from over 30 law firms around the world that are representing the 2,900 people or institutions in 25 nations which have so far taken legal action relating to Madoff. And that's just Madoff. The list of newly uncovered con men continues to grow: Allen Stanford, chairman of the Texas based Stanford Financial Group was charged with an $8 billion fraud. New Jersey fund manager, James Nicholson, was arrested last week in another alleged scheme that could total up to $900 million. Money managers Paul Greenwood and Stephen Walsh have bilked investors for $667 million. Arthur Nadel, a Florida hedge fund manager, is alleged to have defrauded investors out of up to $350 million, and lawyer Mark Dreier, is charged with stealing $400 million in a hedge fund scam. What do the numbers tell us in terms of where the place is that you are most likely to have your money taken? It's not the people in poor neighborhoods, who live in run down homes and have older cars who are most likely to steal your money. The greatest and most far reaching financial damage is perpetrated by people who reside in wealthy neighborhoods, live in mansions, drive expensive cars and think they will never get caught or in Madoff's case, don't seem to care. They do their business in the most dangerous neighborhood in the United States, Wall Street. And you were afraid that some stranger in a bad neighborhood would take your wallet? Related News On Huffington Post: Andy Richter Seriously Fails At Keeping Up With The Joneses (VIDEO) Remember those obnoxious car commercials in which two white guys who live next to each other in suburbia make each other feel like assholes over... digg stumble reddit del.ico.us ShareThis More in Business... McClatchy: Are Wall Street Speculators Driving Up... Madoff Family's Luxury Lifestyle Revealed (SLIDESHOW) FBI Director Mueller Raises Concerns About Gitmo... Guantanamo: A Prison Built On Lies Comments Pending Comments FAQ: Comments and ModerationFAQ: HuffPost Accounts 61 0 Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to View Comments: Newest First Expand All Page: 1 2 Next › Last » (2 pages total) - fsilber I'm a Fan of fsilber permalink White-collar criminals do tend to live in prosperous neighborhoods. Because much of their crime is done by mail and telephone, however, someone who lives on the other side of town from suffers pretty much the same risk as someone who lives next door -- so you cannot protect yourself from them by staying out of prosperous neighborhoods. Because they rely on deception (the victim who recognizes the con can easily protect himself simply by not cooperating), a gun also of little use in these situations, unfortunately. Most blue-collar criminals, in contrast, live in poor neighborhoods and tend to commit crimes that require their immediate physical presence. Staying out of the neighborhoods where blue-collar criminals spend most of their time is therefore an important tactic. To the extent that they rely on intimidation and threats of violence rather than deception, a gun can be very useful (and even necessary) in protecting yourself from them. So your parents' advice about avoiding neighborhoods prone to blue-collar crime still makes sense. Or as one retired cop advised me, "Don't go anywhere you think you're likely to need a gun, but carry a handgun just in case. If you must to go somewhere you're likely to need a gun, bring a rifle or a shotgun, and a friend for backup." As for dealing with Bernie Madoff, well, we'll just have to hope that a few Mafia hitmen were among the people who lost money in his scam. Favorite Flag as abusive Posted 11:09 AM on 03/12/2009 - luziannagirl I'm a Fan of luziannagirl permalink A Madoff expounding on the ills of corporate crime? Is the last name coincidence, or is the author related to the world's largest Ponzi-scheme Madoff ? Favorite Flag as abusive Posted 09:09 AM on 03/12/2009 - Retrofuturistic I'm a Fan of Retrofuturistic permalink I think I knew this instinctively, that very rich people would hurt me, because I grew up in a family where there was a lot of money, but most of the people weren't very nice to me. Don't forget about the religious predators who also contributed to the present state of mass robbery of the American people. We need to beware of people who cloak themselves in sanctity and people whom we want to respect for their money and not their character. It's basically about exalting the ego, either through religion, appearance, or money. And the ego is such a voracious beast, that people who need to have their self-esteem bolstered will go to very great lengths, at great expense to others, to enhance it. Favorite Flag as abusive Posted 04:22 PM on 03/11/2009 - ultrabop I'm a Fan of ultrabop permalink Which brings up the question: why do we need banks? We could all have locked safes in our houses to store our money.