The casualties of Bernard Madoff’s alleged $50-billion Ponzi scheme include some of the biggest names in Jewish philanthropy, in addition to titans of the business and real-estate worlds.
The fast-expanding list of victims is said to include a foundation run by Nobel laureate Elie Wiesel and another by movie director Steven Spielberg. New York Daily News publisher Mortimer Zuckerman, Mets owner Fred Wilpon and billionaire GMAC chairman J. Ezra Merkin are also invested with Madoff, according to the Wall Street Journal.
The scandal is also having reverberations around the world, with the largest banks in Spain and France - Grupo Santander and BNP Paribas - Italy’s second largest bank, UniCredit Spa, and Japan’s Nomura Holdings Inc., estimating hundreds of millions of dollars in exposure.
HSBC, the giant European lender, said in a statement that it had “in the region of one billion U.S. dollars” invested with Madoff.
The scheme by the legendary Wall Street trader, a former NASDAQ chairman and prominent philanthropist, is possibly the world’s biggest investment fraud run by a single person. Over the course of decades, Madoff’s track record of steady investment returns attracted high-profile clients.
He opened the firm in 1960; it is unclear how far back the scheme goes, or how many clients were involved.
At Madoff’s midtown Manhattan offices, guards have been positioned round the clock. The office has been sealed since Thursday, when the 70-year-old trader was arrested a day after telling senior associates - now identified as his sons - that he had carried out a $50 billion Ponzi scheme and that the firm was insolvent.
Investigators from the Federal Bureau of Investigation, Securities and Exchange Commission and the Financial Industry Regulatory Authority are trying to identify if any assets remain, a person familiar with the matter said.
But in a sign of the pain investors are feeling, some are rushing to raise cash, the Journal reported.
In the wealthy Florida enclave of Palm Beach, for instance, where Madoff maintained a residence and cultivated many clients, four multimillion-dollar condos at Two Breakers Row were put up for sale this weekend by owners who had invested with Madoff, said Nadine House, a prominent local real-estate agent.
Jewish schools and charities have been particularly hard hit.
At least two foundations have been forced to close their doors because they had invested most of their funds with Madoff: A Massachusetts charity that supports Jewish programs, the Robert I. Lappin Foundation in Salem, Mass., announced Friday that it would close after losing $8 million -all of its money - through investments with Madoff.
And the Chais Family Foundation, which gives out some $12.5 million each year to Jewish causes in Israel, the former Soviet Union and Eastern Europe, announced Sunday that it had closed after losing all of its money through investments with Madoff, according to the Jewish Telegraph Agency.
The Gift of Life Foundation, a Jewish bone marrow registry that relied heavily on Madoff as a benefactor, announced on its Web site Sunday that it would immediately need to raise $1.8 million to make up for recent losses.
The Elie Wiesel Foundation for Humanity, founded by the famed Holocaust survivor and writer, also sustained large losses, according to two people familiar with the organization’s investments.
The Spielberg charity, the Wunderkinder Foundation, in the past appears to have invested a significant portion of its assets with Mr. Madoff, based on regulatory filings. In 2006, the Madoff firm accounted for roughly 70% of the foundation’s interest and dividend income, according to regulatory filings.
A Spielberg representative confirmed that the foundation has suffered losses on its investments with the Madoff firm. He said he didn’t know the size of the losses.
Another investor was New Jersey’s Sen. Lautenberg and his family foundation.
“Sen. Lautenberg was an investor in Bernard Madoff’s investment fund, primarily in the form of his family’s charitable foundation,” said an aide to the senator. The Lautenberg foundation has donated to the Breast Cancer Research Foundation, Catholic Relief Services and the New Jersey Performing Arts Center.
Others said to have sustained losses include:
- Norman Braman, former owner of Philadelphia Eagles.
- Carl Shapiro, founder and former chairman of apparel company Kay Windsor Inc., and his wife.
- Leonard Feinstein, co-founder of retailer Bed Bath & Beyond.
- Yeshiva University.
- UBS AG.
- Union Bancaire Privée.
- Neue Privat Bank.
- EIM Group.
- Fairfield Greenwich Advisors Tremont Capital Management.
- Maxam Capital Management Ascot Partners.
- Royal Bank of Scotland Group PLC.
- Man Group PLC.
- The North Shore-Long Island Jewish Health System.
- Julian J. Levitt Foundation.
- Tremont Capital.
- Palm Beach Country Club.
- Avram and Carol Goldberg, former owners of the Stop & Shop supermarket chain.
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1 Comments
#1. Karl Marx 12.15.2008
With adequate profit, capital is very bold. A certain 10 percent will ensure its employment anywhere; 20 percent will produce eagerness, 50 percent positive audacity; 100 percent will make it ready to trample on all human laws; 300 percent, and there is not a crime which it will not scruple, nor a risk it will not run, even to the chance of its owner being hanged -1814
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