In The Year of Magical Thinking, her wrenching memoir of the year following the death of her husband John Gregory Dunne, Joan Didion describes the episodes of magical thinking that forestalled her acceptance of Dunne's sudden absence from her life. In the hours after his death, she charged his cell phone. Weeks later, she gave his clothes to charity but kept his shoes because, she thought, "He would need shoes if he were to return."
Modern grief theory tells us that episodes like these are common during the months following a loved one's death, particularly when the death, like Dunne's, occurs suddenly and unexpectedly. This article argues that the same type of magical thinking also affects victims of fraud.
Through a close review of the victim impact statements, in-court allocution, and memoirs of Bernard Madoff's victims, we can see that the loss of money in a Ponzi scheme often feels like the death of a beloved family member. In both cases, survivors display what Didion calls a "shallowness of sanity." They imagine alternative scenarios by which their losses can miraculously be unwound.
This article examines the parallels between financial loss due to fraud and the death of a loved one and explores, in particular, the magical thinking that has driven some of the Madoff victims' litigation. Though written in the context of the legal profession and focusing on the role of lawyers, the article also offers insights to counselors, family members, and victims of fraud.
38 Law and Psychology Review 1-44 (2014)
Barnard, Jayne W., "The Year of Magical Thinking: Fraud, Loss, and Grief" (2014). Faculty Publications. 1719.