The Oedipal twist: Madoff's own sons, Andrew and Mark, turned Madoff in after he told them that the money-management arm of his firm, which ran hedge funds for wealthy investors, was "a giant Ponzi scheme." That term gets thrown around a lot, so we'll remind you of what it actually means: A scheme in which current investors are paid outsized returns not from investing profits but from money put in by new investors.

That is, according to an FBI agent's complaint, exactly what Madoff did:

deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.

All goes well in this kind of scheme until the money stops flowing in. Madoff told his sons that customers had sought to withdraw $7 billion, and he did not know if he could come up with the cash.

Madoff's lawyer, Dan Horwitz, touted his client's "unblemished record" to the Wall Street Journal. But rivals on Wall Street have questioned his curiously steady returns for years.

The complaints against Madoff are shocking. But mostly for the simplicity of the alleged swindle. A Ponzi scheme, in this day and age? It show the need for better hedge-fund regulation — boring! This was a rich-on-rich crime.

The case of Marc Dreier, a lawyer recently arrested on allegations of a $380 million hedge-fund fraud, is far more compelling, with faked-up websites and multiple cell phones. Prosecutors say he tried to sell fake debt instruments to a pension fund.

It all points to a much-needed sweep of the hedge-fund world. But neither Madoff nor Dreier seem to have played a significant role in the housing bubble that could end with 8 million homes in foreclosure. Yeah, the feds got their men. But we didn't get our scapegoats.

• Marc Jacobs is "returning?" Well, if the designer can leverage his sex life into a New Yorker profile, he's probably a decent fit here, in the pages of the New Yorker's more fashion-conscious corporate sibling.
• Movie moguls Harvey and Bob Weinstein plummet to 87 from 41. But they're so used to sinking feelings they probably barely notice them anymore.
• Venture capitalist (and godfather to Google and Yahoo) Michael Moritz fell to 88 from 56. Is the shine off Google that badly?
• What an odd time to add Walter Mossberg to the list. The grossly overpaid Wall Street Journal technology columnist was recently replaced on CNBC by the Times' David Pogue, whose theater background and hammy stage personality make him by far the more interesting gadget czar in the era of Web video. (Mossberg moved over to Fox Business, owned by his paper's new owner.) Pogue doesn't make the list, probably because he doesn't have a big power conference like Mossberg's D - All Things Digital.
• Conceptual artist Damien Hirst debuts all the way up at 31??
• Bill Keller of the Times is hip now! Wait, what?
• Ha ha, nice knowing you, hedge fund guys! Wait, no, not "nice," the other thing. Awful!

Your comments on further strangeness are welcome in the comments, although really it's best not to think too hard about these things, which publishers change at random basically just to screw with you.

THE VANITY FAIR 100:
2007 ranking in parentheses

1. Vladimir Putin, Russian Prime Minister (new entry)
2. Rupert Murdoch, News Corp. (1)
3. Sergey Brin (3), Larry Page (3), and Eric Schmidt (new entry), Google
4. Steve Jobs, Apple, Disney, and Pixar (2)
5. Warren Buffett, Berkshire Hathaway (5)
6. Jeff Bezos, Amazon (23)
7. Sheikh Mohammed bin Rashid al Maktoum, ruler of Dubai (new entry)
8. Roman Abramovich, Millhouse Capital (30)
9. Angelina Jolie & Brad Pitt, actors, activists (new entry)
10. Al Gore, eco-warrior (19)
11. Bill Clinton, Clinton Foundation (6)
12. Michael Bloomberg, Mayor of New York, Bloomberg L.P. (9)
13. Bernard Arnault, LVMH (8)
14. Steven Spielberg, DreamWorks SKG (7)
15. Ralph Lauren, Polo Ralph Lauren (13)
16. Steve Ballmer, Microsoft (returning)
17. François-Henri Pinault, PPR (new entry)
18. Barry Diller & Diane von Furstenberg (15), IAC; Diane von Furstenberg (15)
19. H. Lee Scott, Wal-Mart (12)
20. Lloyd Blankfein, Goldman Sachs (new entry)
21. Jamie Dimon, JPMorgan Chase (new entry)
22. David Geffen, DreamWorks SKG (16)
23. George Lucas, Lucasfilm (40)
24. Jerry Bruckheimer, Jerry Bruckheimer Films (26)
25. Mark Zuckerberg, Facebook (new entry)
26. Ronald Perelman, MacAndrews & Forbes (31)
27. Jeff Bewkes, Time Warner (22)
28. John Lasseter (66), Andrew Stanton (new entry), and Brad Bird (new entry), Pixar, Disney
29. Herb Allen, Allen & Co. (21)
30. Miuccia Prada, Prada S.p.A. (44)
31. Damien Hirst, conceptual artist (new entry)
32. Sumner Redstone, Viacom, CBS (70)
33. Arnold Schwarzenegger, Governor of California (50)
34. Tom Hanks, actor, director, producer (32)
35. Robert Iger, Disney (36)
36. Bono, singer, humanitarian (28)
37. Larry Ellison, Oracle (20)
38. Larry Gagosian, Gagosian Gallery (84)
39. Howard Stringer, Sony (17)
40. Peter Chernin, News Corp. (24)
41. Philippe Dauman, Viacom (68)
42. Vivi Nevo, NV Investments (59)
43. Oprah Winfrey, Harpo Productions (14)
44. Jon Stewart, The Daily Show (89)
45. Stephen Colbert, The Colbert Report (87)
46. Carlos Slim Helú, Teléfonos de México, América Móvil (11)
47. Karl Lagerfeld, Chanel (52)
48. Giorgio Armani, Armani Group (37)
49. Prince Alwaleed bin Talal, Kingdom Holding Company (new entry)
50. Mike Nichols & Diane Sawyer, director; ABC News anchor (42)
51. Jacob Rothschild, financier (33)
52. Mickey Drexler, J. Crew (55)
53. Jeffrey Katzenberg, DreamWorks Animation (38)
54. Leslie Moonves, CBS (25)
55. George Clooney, actor, producer, director, activist (27)
56. Jay-Z, hip-hop (47)
57. Oscar & Annette de la Renta, Oscar de la Renta (53)
58. Judd Apatow, producer, director, actor, writer (new entry)
59. Robert De Niro, Tribeca Enetrprises, Tribeca Productions (34)
60. Bill Keller, The New York Times (new entry)
61. Mick Jagger, the Rolling Stones (60)
62. Bruce Wasserstein, Lazard; Wasserstein & Co. (43)
63. Ted Forstmann, IMG Worldwide (new entry)
64. Anna Wintour, Vogue (new entry)
65. Brian Roberts, Comcast (57)
66. Brian Grazer & Ron Howard, Imagine Entertainment (65)
67. Mukesh & Anil Ambani, Reliance Industries, Reliance ADA Group (new entry)
68. Jeff Zucker, NBC Universal (returning)
69. Jeff Skoll, Participant Media (61)
70. Jonathan Ive, Apple (83)
71. William McDonough, William McDonough & Partners (new entry)
72. Bobby Kotick, Activision Blizzard (new entry)
73. Shigeru Miyamoto, Nintendo (new entry)
74. Matt Drudge, the Drudge Report (new entry)
75. Donatella Versace, Gianni Versace S.p.A. (77)
76. Diego Della Valle, Tod’s (63)
77. Henry Kravis, Kohlberg Kravis Roberts & Co. (51)
78. Marc Jacobs, Marc Jacobs, Marc by Marc Jacobs, LVMH (returning)
79. Jean Pigozzi, investor, art collector (86)
80. Paul Allen, Vulcan Inc. (71)
81. Charlie Rose, Charlie Rose (80)
82. Frank Rich, The New York Times, HBO (82)
83. John Galliano, Christian Dior, Galliano (new entry)
84. Jann Wenner, Wenner Media (74)
85. Joel & Ethan Coen, movies (new entry)
86. John Malone, Liberty Media (69)
87. Harvey & Bob Weinstein, the Weinstein Company (41)
88. Michael Moritz, Sequoia Capital (56)
89. Steven Rattner, Quadrangle Group (97)
90. Arianna Huffington, the Huffington Post (98)
91. John Paulson, Paulson & Co. (new entry)
92. Vinod Khosla, Khosla Ventures (62)
93. Jerry Weintraub, Jerry Weintraub Productions (76)
94. Tobias Meyer, Sotheby’s (new entry)
95. Tom Brokaw, NBC News (returning)
96. Doug Morris, Universal Music Group (99)
97. Jimmy Buffett, Margaritaville (96)
98. Jeffrey Sachs, the Earth Institute at Columbia University, Millennium Promise (new entry)
99. Steven Cohen, S.A.C. Capital Advisors (45)
100. Walter Mossberg, The Wall Street Journal (new entry)

[Vanity Fair]