None so blind as those who will not see

"And none so deaf as will not hear" Matthew Henry, 1662-1714, exegist and investment advisor

"And none so deaf as will not hear" Matthew Henry, 1662-1714, exegist and investment advisor

Bloomberg: Platinum Partners Ponzi scheme persisted despite reporting  clockwork-like returns of 17% from 2003-2015, with no down years.

The returns were almost as smooth as the fake gains that Madoff claimed year after year, as measured by a popular metric called the Sharpe ratio.
But until Murray Huberfeld, who founded Platinum with Nordlicht, was caught up in a New York City municipal-corruption probe in June, no one at the fund had been charged with wrongdoing. Within weeks of Huberfeld’s arrest, federal agents raided Platinum’s midtown Manhattan office. On Dec. 19, Nordlicht and six others were arrested in what the government called a $1 billion fraud. Nordlicht and Huberfeld have pleaded not guilty, and Platinum’s main fund is being wound down after filing for bankruptcy. Montieth Illingworth, a spokesman for Platinum, declined to comment.
Smooth Returns
That Platinum was able to avoid scrutiny for so long illustrates flaws in the post-Madoff regulatory regime. While the SEC says it now conducts “risk-based examinations” of funds that have suspiciously smooth returns, the agency didn’t do a thorough on-site audit of Platinum until 2015, according to a person with knowledge of the matter. Judy Burns, an SEC spokeswoman, declined to comment.
“The returns alone make no sense,” said Joelle Scott, who investigates money managers as senior vice president at Corporate Resolutions Inc. in New York. “This isn’t a Madoff thing where it was hard to find. This was a glaring, documented history of bad behavior.”
The fund’s presentations for investors touted its top-tier auditors and “independent valuations” by an experienced consultant. But those gatekeepers relied on Platinum to provide information about its investments. The valuation consultant says the firm never visited the California oil fields that supposedly accounted for much of Platinum’s assets. Even a simple check of public records would have revealed they were barely producing oil.

Back in December, when the fund's partners were arrested, the WSJ had its own "Fox Butterfield, is that you?" moment: 

Paradoxically, Platinum struggled to attract money from skeptical, deep-pocketed professional investors, instead turning time and again to a tightknit group of fellow observant Jewish businesspeople with whom Platinum’s founders were acquainted socially.

Or, to quote a contemporary of Henry's, Alexander Pope, "fools rush in where angels fear to tread".