Anatomy of a Con Artist: How Madoff Played the Trust Equation

The Trust Equation  describes the components of trustworthiness.  The equation is:

T = (Credibility + Reliability + Intimacy) / Self-orientation

Of course, any such recipe worth its salt will also serve as a template for reverse engineering—a “how-to” manual for a con man.  Measuring Bernie Madoff by the trust equation shows just what an effective job he did at mimicking genuine trust. 

So let’s do the numbers:

Credibility: Chairman of the Board of Nasdaq, for starters.  Not to mention a Who’s Who client roster.  But an especially nice touch: not just any old lamb could buy in—you had to be approved by the wolf.  Exclusivity adds cache and credibility. 9 out of 10.  Better than Alan Greenspan (hey, he used to be hot).

Reliability: Arguably Madoff’s greatest contribution to the con: don’t go for the jackpot, the Big Win.  Become known for steadily hitting .335 in a league of .285 hitters.  Always just over the average means always just under the radar.  Another 9 out of 10.

Intimacy: courtesy of spoonfeedin, he was described as a gentleman, gregarious, generous, personable, charming, and so forth.  Like a mass murderer, he appears to have been ‘the last person’ one would have suspected.  Give him an 8 out of 10.

Self-orientation: who would suspect the motives of a philanthropist, a giver to religious causes, a man generous with his own (we thought) money?  Not me, not you, that’s who.  An apparent low score (low self-orientation is good, you see); maybe a 2. 

That’s a Trust Quotient score of (9+9+8)/2, or a spectacular 13 out of a possible 15.  (If you don’t think that’s spectacular, try it yourself: take your own Trust Quotient.

There is no such thing as trust without risk; Madoff was an awfully talented con man.

But he couldn’t have done it without his pigeons. 

–A great many people may have suspected him, but felt glad to be in on the “fix.”  No sympathy for them. 

–I am astonished to hear that Fairfield Partners may sue PricewaterhouseCoopers—not Madoff’s accounting firm, but their own accountancy.  Zero sympathy for that Madoffian level of chutzpah. 

–Then there’s all the relatively innocent folks out there who thought they’d found something almost too good to be true.  They learned the distance between “almost” and “definitely” is dangerously thin.

22 replies
  1. James A. Boyd
    James A. Boyd says:

    Wow.  Such an insigful analysis it’s scary.  Scary to realize that trust can be so minipulative in the wrong hands.  I have built a very successful financial services sales career by getting people to trust me.  Now, I feel even more of a duty to help erase the stain of Madoff.

  2. Charlie (Green)
    Charlie (Green) says:


    Thanks for the comment.  Good intent doesn’t excuse incompetence; bad intent with great skills makes you a con man.

    You clearly know the difference; if you’re good at what you do and have really good intent with your clients, you’ll do well for yourself and make the best argument possible against Madoff; namely providing an example of doing business in an ethical manner.  It’s a win-win. 

    Looking at all the people Madoff harmed, he has to be asking: was it worth it?  One hopes he knows the only possible answer is, ‘no way.’


Trackbacks & Pingbacks

  1. […] to of our way of thinking about trustworthiness is the Trust Equation, which describes trustworthiness through the four components of Credibility, Reliability, Intimacy […]

  2. […] on trust, start reading his work and do as he says. And, if you don’t know his trust equation, here it is.  I found it […]

  3. […] our monthly ebook. This issue is a call – and a guide – to action, and is all about putting the Trust Equation to good use. It’s filled with practical tips and hands-on advice we hope you find useful. And we […]

  4. […] fastest payback things you can do to build trust. I’ve organized it by the four variables of the Trust Equation and zero-ed in on actions that requiremoments, maybe hours, but certainly not days or […]

  5. […] is one of the four components of theTrust Equation and it usually gets the short-shrift. For most, it’s more natural to build trust by […]

  6. […] date, Reliability comes out 16 percentage points higher than any of the other three elements of the Trust Equation. This isn’t really surprising, given that Reliability is the easiest to grasp and execute. […]

  7. […] are lots of ways to build trust with others (four, by our count) and Credibility is a big one. In our Trust Quotient research, Credibility shows up […]

  8. […] said from the heart, “That makes sense” is an incredible intimacy-builder. It’s no accident it also happens to be what relationship guru Harville Hendrix teaches couples […]

  9. […] The Trust Equation, according to Green, is “a deconstructive, analytical model of the components of trustworthiness”, i.e., it describes the one to be trusted: The Numerator of Trustworthiness combines Credibility, Reliability and Intimacy, while the Denominator is Self-Orientation (see diagram): […]

  10. […] said from the heart, “That makes sense” is an incredible intimacy-builder. It’s no accident it also happens to be what relationship guru Harville Hendrix teaches couples […]

  11. […] website – you can show your degrees, a video with you talking and being very trustworthy. But a key component of trust is intimacy; we trust people we know. For most of us, a website and some videos still doesn’t amount […]

  12. […] Trust Equation is familiar to many of you, both regular and even occasional readers of this blog.  It’s a […]

  13. […] H. Green discusses the Core concepts of Trust in Business.  How Trust relationships are vital to the conduct of a business.  He lays out the core trust […]

  14. […] of the most powerful concepts in the book is The Trust Equation  ….now it seemed strange to me to reduce something as elusive and critical as trust down to a […]

  15. […] marketing— website, blog posts, and speeches— must demonstrate the four ingredients in Charles Green’s trust formula. Reliability, credibility, connection and a focus on them, not on […]

  16. […] Nestled between the delicious food shots and cool clothes in the April print issue of Real Simple magazine is a gem of an article called “Life Lessons: 5 Ways to Make a Good Impression.”  Forget firm handshakes and eye contact, shined shoes and prep for the meeting.  Real Simple asked five experts to chime in, and I was struck by the ties to the good old Trust Equation. […]

  17. […] on trust, start reading his work and do as he says. And, if you don’t know his trust equation, here it is.  I found it […]

  18. […] of this blog know that we often write about Intimacy in a business context.  And two of the three elements which make up that invaluable quality are […]

  19. […] at the Trust Equation we can see where some of this trust has come […]

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *