For those who don’t believe we can actually use math to fight crime, the story of Harry Markopolos, the man who blew the whistle on Bernie Madoff, shows that a dream of using math to catch criminals need not be untenable. In a recent interview for 60 Minutes, Mr. Markopolos describes how he harnessed the power of mathematics to discover that whatever Mr. Madoff was doing, it had to be illegal.
Bernie’s luck was bound to run out sooner or later, as he must’ve known. His seeming success was really nothing more than a giant Ponzi scheme – in other words, he was able to pay his investors amazing returns by taking money from new investors, rather than by creating new wealth. It doesn’t take a mathematician to realize that such a plan is unsustainable, since the more successful your scheme becomes, the more new investors you require in . . . → Read More: Numb3rs in Real Life