The guy who figured out Bernie Madoff's scam now says GE is about to go bankrupt

Well before the collapse of Bernie Madoff's ponzi scheme -- the largest in world history! -- accounting investigator Harry Markopolos had publicly accused Madoff of running a scam; now he says that General Electric is "one recession away" from bankruptcy, with a "balance sheet in tatters."

Markopolos and his team just released a 175-page report called GENERAL ELECTRIC, A BIGGER FRAUD THAN ENRON, which accuses the firm of using accounting tricks to paper over $40b in liabilities and to disguise problems with the company's stake in oil services firm Baker Hughes.

GE does not dispute that it has $71b in assets and $106b in debt, but says that it "expects to make significant progress" reducing its debts next year.

GE accuses Markopolos of ginning up false claims as part of a drive to benefit short sellers, who make money when GE's share price declines. Markopolos his research was funded by short-sellers, but he says that his research was motivated by his distaste for fraud, not the interests of his funders.

Markopolos also dismissed claims by GE that he will profiting from the fall in the company's stock price because he is working with a firm that is shorting GE stock -- betting that the price will go down so it can make money off of the decline. He would not name the investment firm, saying simply that he's a "seeker of the truth." "If I see accounting fraud, I go after it," he said.

Markopolos added that he's had "ongoing discussions" with the Securities and Exchange Commission and the Department of Justice about their investigations into GE's accounting. GE has said in regulatory filings and during earnings conference calls with analysts that is cooperating with both the SEC and DOJ. The SEC declined to comment about the status of its GE probe. The DOJ was not immediately available for comment.

GENERAL ELECTRIC, A BIGGER FRAUD THAN ENRON [Harry Markopolos/Fraud Investigators]

Madoff whistleblower says GE is 'one recession away from Chapter 11' [Paul R. La Monica/CNN Business]