From the “Well, didn’t I tell you this yesterday because it seems to be fairly obvious?” file, victims of the Bernie Madoff Ponzi scheme are unhappy with the plea agreement. Their displeasure is not based on a lack of justice being served, but the lack of visibility into the truth around his actions.

Investors said in telephone interviews Madoff’s potential 150-year sentence means little to them because they want more details of the scheme he confessed to in December and where the money went.

“They want this to be over so badly, it’s stunning,” said New York retiree Miriam Siegman, who worked for nonprofit organizations and lost her retirement money. “In a jury trial the truth has a chance of coming out.”

“He understood to the infinitesimal detail how corrupted the system was and how easy it was really, to work it, and it remains so,” Siegman said.

And that is the rub – I believe the government does not wish to expose how corrupt the system really is. I also believe they do not wish to show how the investment community is potentially connected to organized crime.

I’m slightly confused as to why the Federal Prosecutors would be willing to offer Bernie Madoff a guilty plea. This is the man behind the largest Ponzi Scheme in the history of, well, Ponzi Scheme as he stole roughly $50 Billion of funds.

With the “rock solid case” prosecutors had, which included testimony from his son and documents showing he never committed the trades he stated, why simply offer him 11 felony charges? Yes, this will most likely result with Madoff spending the rest of his life in prison, but was justice served on behalf of the people he swindled?

I could potentially see the Feds making would be related to the potential costs of a trial. They could say this man already cost thousands of people Billions of dollars, so why spend more tax payer money when the Madoff was willing to admit guilt and go away quietly?

Looking at this situation with a bit of skepticism, I wonder what information Madoff provided to the Government that would cause prosecutors to stop short of taking this mans head and putting it on top of a take at Wall and Broad.

Two things I can think of…

1. Madoff showed the SEC and Federal Regulators how he managed to scheme the system for so long. Simply put, he pointed out the flaws.
2. The Government wanted to “protect” the “investment” system and avoid publicizing how Madoff truly made money – by off book lending to less than reputable individuals.

I believe that Madoff was involved in some form of money laundering and organized crime outside of the United States. Most of his money was moving through Eastern Europe, which has little regulation, and would allow for him to act as a “black bank”. Terrorists need funding too, and they happen to utilize these “black banks”, so it wouldn’t be a stretch.

Wouldn’t it look real bad for the U.S. government if Madoff laundered funds purchased the explosives used in attacks in the UK or Spain… or funding for a covert paramilitary operation by “agents” (read Contractors) of our government.

I think this case provides more exposure for the government and the financial system, that is why the plea was offered. And, as a result, government won’t have to put their dirty laundry up in the yard for all to see.