Madoff's fraud scheme allegedly bilked investors of $50 billion

PROVIDENCE 12/15/2008 - General Treasurer Frank T. Caprio said today that Rhode Island's State Pension Fund is safe from any fallout from the arrest of New York financier Bernard Madoff.

"The State of Rhode Island had no affiliation with Mr. Madoff or his company," said Treasurer Caprio.

The nine member State Investment Commission (SIC), of which Treasurer Caprio is the Chair, makes major decisions regarding the state's $6 billion state pension fund and has strict policies and guidelines when it comes to investing the state's assets.

"Mr. Maddof's fund would not have met the State of Rhode Island's policies and guidelines," said Treasurer Caprio.

"The SIC will continue its focus on protecting the State's assets and achieving a competitive return," said Caprio.

Madoff, a former chairman of the Nasdaq stock exchange, was arrested Thursday on a single securities fraud charge of operating a $50 billion Ponzi scheme from his investment advisory business.

Investors in Madoff's fund included some of the largest institutional and private investors in the world.

A Ponzi, or pyramid scheme, is an investment fraud in which high profits are promised to investors from fictitious sources. Early investors are paid off with funds raised from later ones.

Madoff faces a maximum penalty of 20 years in prison and a $5 million fine if he is convicted.

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