Fraudster Bernard Madoff would have been caught long before his $65 billion Ponzi scheme was finally exposed if the authorities really knew what they were looking for.

That is according to Mike Gasior, founder, president and chief instructor of AFS Seminars LLC, who will be holding two seminars on preventing investment fraud for the Institute of Chartered Accountants of Bermuda at the Chamber of Commerce boardroom later this week.

Mr. Gasior, who gave an exclusive interview to The Royal Gazette yesterday, aims to equip accountants with the necessary tools to combat the likes of the Madoff, Enron and WorldCom scandals from happening again.

"It is really the nuts and bolts of the financial markets and financial instruments, to deal with these things," he said.

"I am really concerned that the accounting profession will end up being thrown under the bus for not being the canaries in the coal mine.

"Madoff was the easiest to catch if you knew what to look for — it didn't require any rocket science, and similarly Nick Leeson (the rogue trader) should have been the easiest person to catch after he went to his senior management team asking for money — it was shocking that the alarm bells didn't ring and that they didn't get on a plane straight away to find out exactly what he was doing." Mr. Gasior, who has met Madoff on a number of occasions during his 30-year career, said authorities and investors could have easily found out what Madoff's activities were by asking for his statement of records for his holdings.

He said the warning signs were already there with some of the world's biggest banks such as Goldman Sachs, JPMorgan and Morgan Stanley choosing not to invest with him and common sense suggesting something wasn't quite right through the returns he claimed to provide.

But Mr. Gasior, who has been holding seminars on the Island for the past 20 years, said it wasn't until the financial crisis struck last year and investors started asking for their money back that Madoff's Ponzi scheme and a number of other similar scams were blown wide open.

"There is a quote from Warren Buffett which says: 'You don't find out who is swimming naked until the tide goes out', which sums up the whole situation quite nicely," he said.

"People only needed to ask how could it be that Madoff was providing returns that no other bank was offering or was similar or comparable to?"

Mr. Gasior, who founded AFS Seminars in 1989 after spending time with several Wall Street firms and a major European bank, said the issue of investment fraud went much deeper than just Madoff, adding that the US Securities & Exchange Commission which should have looked more fully into the scamster's affairs was not getting the extra funding, staff or training required to do its job properly and investigate such crooks.

On a local level, he reckons the likes of Fairfield Greenwich has a fiduciary responsibility to do something about Madoff and help put a stop to his crimes.

"Madoff was just a crook and what he did shouldn't dent the industry, but he should have been caught earlier," he said.

Mr. Gasior has written an article aptly titled 'A Wonderful Fiction', which uncovers what he claims is the real story behind the recession, alleging a conspiracy of 'silence and collusion' undertaken in the US and abroad over the past 18 months to convince the public that the financial system is safe and solvent and keep them from knowing how bad debt losses incurred will be in the future.

He said the whole issue stemmed back to the mark to market or FAS 157 accounting rule which came into force in the wake of the Enron and WorldCom scandals, and the category three valued securities which have no active marketplace of third party quotes to rely on, with the Accounting Standards Board being forced by political pressure from Washington to relax its standards for category three assets, leading to many institutions which appear to be solvent and healthy, but who would be bankrupt if it were not for the bending of this rule, allowing them to fabricate and inflate the market values of their holdings.

"I am not the only one that knows what is really going on," he said. "It is totally phoney and it is all through political pressure where there is pressure on the accounting profession to lay off and give banking regulators the ability to suspend standard US GAAP accounting.

"What got us into those kinds of problems in the first place was the lack of transparency and what do the politicians do? They try to make it less transparent."

The seminars will be held at 1 Point Pleasant Road on Thursday and Friday between 9 a.m. and 5 p.m. on both days.

For more information on the event, contact Susan MacLachlan, training co-ordinator for ICAB, at smaclac@icab.bm