An ancient IBM AS/400 was crucial to US investment swindler Bernard Madoff’s cunning Ponzi scam whereby he made off with huge wodges of other people’s cash.
According to a new book, “Too Good to Be True: The Rise and Fall of Bernie Madoff”, author Erin Arvedlund claims that Madoff could not have managed his elaborate fraud without his old clunker of a mid-range computer system.
The IBM AS/400 was used by him and select other employees to print out fake account statements. What they would do was punch in fake trades on the IBM AS/400 and enter share prices that would square with his consistent but imaginary returns on the billions that customers entrusted to his firm.
Central to the scam was that “no one touched” the computer but Madoff. But that would have been a safe bet as no one would want to get their paws on an ancient AS/400 unless they were a real enthusiast.
Here’s some interesting insights into Madoff’s computer.
Madoff is SOL, but his cronies at Goldman Sachs and JP Morgan are making out like billionaire bandits.
A different topic:
Fascist Britain is considering criminalizing 7 million file sharers.
http://torrentfreak.com/britain-mulls-turning-7-million-into-download-criminals-090816/
There are a whole lot of small businesses running business system software on AS/400s. And they’re doing quite well, those are very reliable machines.
Just another excellent example of why would anyone upgrade if your current machine and apps DO what you want it to do? I think that about Win 7. XP is really doing everything I want. Why upgrade?
Much like a “gun” its the person using it that is more interesting than the tools used.
And some of the largest business as well. Wow, what an obnoxious article regarding the 400. Mainframes are dead! Linux sucks! Windows is a security pit! What other hyperbole can we use about a platform?
The 400, currently known as the “i”, runs on one of the most powerful platforms in existence, the IBM Power6+. The software was originally written in the 1970s as an OO operating system with a 128-bit flat memory addressing scheme with a “hypervisor” between the OS and the hardware called the TIMI. Thus when the change from CISC to RISC occurred, there was little interruption. I am not an IBM employee nor have ever been. Just fortunate enough to have worked on nearly every business system for the past 20 years and the 400 is a great one. Just because IBM can’t market it to save their lives…
http://en.wikipedia.org/wiki/IBM_System_i
“no one would want to get their paws on an ancient AS/400 unless they were a real enthusiast”
Hey, I used to program on AS/400s and believe me they were (and still are in iSeries form) 10,000 time more reliable any PC platform I have every programmed on. For Y2K it was a big event for us to shut down the servers for the cross over as some of those production servers had run continuously for over 7 years without any hardware or operation system down time. Show me PC server that will run smoothly for 7 years without a single reboot. You can’t!
My guess is that Madoff was terrified to have his data migrated.
“An ancient IBM AS/400 was crucial to US investment swindler Bernard Madoff’s cunning Ponzi scam ”
Ancient in some people’s mind is something that has been fully depreciated rather than something that can no longer reliably get the job done.
AS/400… boring platform, but it sure as hell is stable.
I never touched an AS/400 in native mode, but a client’s got an AS/36, which is just the AS/400 hobbled to run the ancient S/36 OS….
I hate it, but it pays the bills, and after about 25 years, it’s just “there”…. (I started in that smallframe arena with an System/3 Model 10, and then upgraded to an S/34. That business is long gone, but the client started with an S/34 and upgraded to the AS/36 over the years. Not a lot of difference….)
A similar scandal, btw, occurred during the S/3 days, when decent small business computers were rare and expensive. Same sort of scam…. Use the computer to generate bogus activities….
BTW, the AS/400 is NOT a PC by any stretch of the imagination. You don’t just put a copy of the spreadsheet and WP du jour on there and have at it. You can buy canned software that’ll likely do about anything, but it’s not likely that your kid, or the neighbor kid, can come in and set you up. Not rocket science, but “user friendly” doesn’t really apply to creating applications or getting them running. Either Madoff bought some software or paid somebody to write it, and, either way, likely paid somebody to get it running….
Stable barely covers it. My client’s AS/36 OS shows screens dated in the mid-80’s. Energizer bunny….
Har Har, Madoff used the iSeries?
I guess that makes him an EBCDIC!
bwah hah hah
First, there is nothing wrong with mainframes, or an AS/400. They are all rock solid platform that do an amazing amount of work. And they do it so well that no one notices.
Regarding Madoff running old accounting software. I suspect part of the reason was that the newer software out there has automatic collection of security prices from other servers. Since Madoff was plugging his own prices in his database, software that went out and got the real price automatically would cause a serious “adjustment” in his portfolio balances.
His whole operation was fiction anyhow. So why would he change it? He was plugging in numbers as he wanted, producing statements, and his customers didn’t care.
I wonder if his customer’s had online access to their portfolios, like most other trading and investment companies have? I bet not. I wonder if they were screaming at him to do so? The development of online banking and trading must have keep Madoff up at night.
The 400 used SQL for report generation. Which turns out, so does everything today.
Hey MikeyG, if your ‘400 went 7 years without a IPL, you weren’t applying your PTF’s on a regular basis. Likewise, you could setup a Windows 2000 server and never reboot it – provided you don’t connect it to the Internet. Oh, and if you build, say, an Ubuntu box from scratch, you’ll be rebooting it every day for a week while it catches up on updates.
Anyway, the iSeries is a stable, and highly underrated, transactional platform. Mr. Madoff’s people were nothing if not prudent. The smart crooks use the best toys.