Fraud

TOPIC: Fraud

WARM-UP: What things come to mind when you think of fraud or stealing other people’s money? What do you know about fraud? What does fraud mean to you?

1. Spend one minute writing down all of the different words you associate with the word ‘fraud’. Share your words with other students and talk about them. Together, put the words into different categories.

OBJECTIVES: Today, we will focus on learning about Bernard Madoff and the $50 billion investment fraud that has been reported in the news recently. This is important to learn because it is one of the largest frauds in history and affects people around the world. This session will help you understand the news, events, vocabulary, and conversations that take place about the topic. By the end of this class, you will be able to comfortably talk to visitors, co-workers, and friends about the Bernard Madoff fraud in the news.

LEARNING ACTIVITIES:

A: BEFORE READING:

1. TRUE / FALSE: Look at the article’s headline and guess whether these sentences are true (T) or false (F):

2. Bernard Madoff was well-known. T/F
3. Bernard Madoff was responsible for $50 billion. T/F
4. Bernard Madoff handed over a Ponzi scheme. T/F
5. Bernard Madoff worked out a Ponzi scheme. T/F
6. Bernard Madoff was charged with a $50 billion fraud. T/F

2. SYNONYMS: Match the following synonyms from the article:

Massive	Drummed up
Swindle	Struggling
Allegedly	Enormously
Stricken	Epic proportions
Socialites	Apparently
Generated	Fraud
Hugely	Exclusive

B: WHILE READING:

1. Read the article from the Time Magazine, “Wall Street legend Bernard Madoff arrested over '$50 billion Ponzi scheme'.
2. Circle each time that you see the term, “Ponzi scheme”.
3. Circle or underline all of the words that you do not understand.

C: AFTER READING:

1. Vocabulary:
2. Discuss the most important vocabulary terms as a class, (including the ones that you circled in B2 above).
1. Legend (n.): somebody famous admired for a skill or talent
2. Ponzi scheme (n.): A pyramid scheme, or a scam that pays returns to early investors out of the money paid by later investors rather than from profit. New investors must continue to be drawn in to pay off earlier investors.
3. Socialites (n.): somebody who is well known in fashionable society
4. Swindle (v. and n.): to cheat somebody of something
5. Powerbroker (n.): A person or group having the ability to influence important decisions, especially in public policy, politics, and business
6. Massive, (adj.): very large
7. Fraud, (n.): is the act of convincing another to believe information that is not true for personal gain or to damage another, (most commonly money).
8. Scheme, (n.): a secret plan, or plot
9. Epic proportions, (adj.): very large
10. Solvency, (adj.): is the ability to pay debts with available cash
11. Insolvent, (adj. and n.): a company can no longer operate and is undergoing bankruptcy.
12. Fraudulent, (adj.): not honest, true, or fair, and meant to deceive, (lie to) people
13. Abnormally, (adv.): unusually, strangely
14. Subsequent, (adj.): later, following
15. Generated, (v.): made, or created
16. Perpetrated, (v.): to have done something wrong
17. Skepticism, (n.): a doubting attitude
18. Purported, (adj.): To have or present the false appearance of being.
19. Inevitably, (adv.): impossible to avoid, happens certainly
20. Collapse, (v.): to fail suddenly
21. Stricken, (adj.): very badly affected by trouble or misfortune
22. Suspicions, (n.): doubts, feelings of something wrong
23. Securities, (n.): documents traded on stock exchanges that show debt or ownership, (a stock certificate or a bond).
24. Bail, (n.): a sum of money deposited to get an accused person out of jail and to guarantee that person's appearance in court at a later date. If the person doesn’t appear in court on the date set, the money is kept.
25. Integrity, (adj.): honesty
26. Enclaves, (n.): special area or group of people

3. Questions: Prepare a list of questions about Bernard Madoff and the article that you read. Ask other participants your questions and write down their answers. Then share your findings with the class.

4. Similar stories: Who else do you know who committed frauds, or stole a lot of money? What happened? Fill out the chart below with a partner. Then, share it with the class.

NAME of person or company	What happened?

5. Punishment: What would be an appropriate punishment for Bernard Madoff?

Write down your ideas with a partner. Then, share these with the class.

6. Fraud prevention: What are ways that people could avoid losing money from frauds, scams, or swindles? Write down your ideas with a partner. Then, share these with the class.

7. Discussion: Use the list of questions provided by the facilitator to have a discussion about Bernard Madoff and fraud with other class participants. Try to use the vocabulary terms already discussed above.

OTHER RESOURCES:

http://articles.moneycentral.msn.com/Investing/Extra/5-ways-to-avoid-a-ponzi-scheme.aspx