People make mistakes. Yes, they do.

We have all experienced, or caused, mistakes, usually in small ways.

Occasionally, we may experience, or even precipitate an unexpected whopper of a mistake. But, usually, most of us would agree, the whoppers result from the behavior of others.

For example, a vehicle accident may be a small fender bender in a parking lot; or, it may be a serious collision that results in significant financial impact for the parties, causes pain, injury or worse.

Fraud is like the serious collision. Fraud can also result in pain, damage and significant financial impact to the aggrieved parties. The difference, of course, is the premeditation present in the mind and fraud method of the perpetrator as he seeks his prey.

Let’s consider that the latest example of fraudulent behavior might be that of one Bernard Madoff, reputed financial titan and self-described “market maker” of Wall Street. If true, the latest victims of Madoff’s alleged fraud include his friends, followers and financial fans. According to a lawyer representing several dozen investors, the Madoff scheme “swept up some of the most prominent and wealthy Americans” as well as “many people who thought they were embarking on a comfortable retirement and have now been left destitute.”

Last week, the feds caught up with Madoff in New York, and arrested the founder and primary owner of Bernard L. Madoff Investment Securities LLC. Prosecutors allege that Madoff used a Ponzi scheme to “hid(e) losses, paying certain investors returns using principal he received from other investors.” Through this point, no one knows how high the alleged fraud will go, though some media report it could total as much as $50 billion as foreign banks and investment firms also may have been taken in by Madoff.

Following the arrest, Madoff's attorney, Ike Sorkin, said “This is a real tragedy.”

That’s an understatement.

Attorney Sorkin added, “We’re going to fight through these events and do what we can to minimize the loss.”

Keeping in mind that many of the individual investors as well as the smaller investment firms snookered by Madoff report they have been “wiped out,” the real question is: How will Sorkin minimize the loss?

Here’s a thought: Immediately embargo all of Madoff’s personal accounts, as well as the monetary and physical assets of Madoff’s companies and foundations, along with all of his known real estate holdings, which include a home in tony Roslyn, N.Y., an Upper East Side “Manhattan two-floor apartment valued about $9 million” and “an elaborate beachfront home and grounds in Montauk on Long Island.”

One media report noted that “colleagues of Mr. Madoff said he was fair to those he dealt with … and generous to charities including the Special Olympics. A retired New York Stock Exchange broker was quoted as saying, “I really think very highly of him. People make mistakes.”

Hmm. People make mistakes; yes, they do.

“He was fair to those he dealt with.” Do you really think so?

“He was generous to charities…” Is that with other people’s money?

“I really think very highly of him.” You do?

“People make mistakes.” Yes, they do … unless you are mistaken.

Watch developments in this case closely. Meanwhile, here are three points to ponder:

First: Criminal and civil justice must be done swiftly within the legal system.

Second: Regulators must review and template the financial processes used by Madoff and incorporate them in timely audits of other market maker operations.

Third: There must be no government bailouts. Investor funds recovery — if any — must be limited to and sourced exclusively from Madoff’s personal and corporate assets.

Richard Olivastro is a professional member of the National Speakers Association, president of Olivastro Communications and founder of Citizens For Change. He can be reached at Rich@Olivastro.NET or 877-RichSpeaks.