Junk accounting from Madoff victims

Several organizations that lost large sums of money with Madoff are now pretending their losses aren’t as bad as previously thought because profits Madoff said they made never existed in the first place. Sorry, but this is Looney Tunes accounting.

Sue, who is a CPA, says “they’re thinking like gamblers.” If they put $100 million with Madoff, and his bogus accounting told them its value had climbed to $150 million, then they had on their books at that full amount, and that is the amount they have to write off.

They can sue for the original amount of the investment plus whatever a reasonable return might have been.