Madoff's muck

Yeshiva University lost an estimated $110 million. Hadassah, according to a relative that quoted a report from the national president, reportedly lost an estimated $90 million. The Washington D.C. Jewish Federation lost its entire endowment. The American Jewish Congress reportedly lost millions. The Robert I. Lappine Foundation in Massachusetts closed its doors. Major Hollywood players like Steven Spielberg and Jeffery Katzenberg were victims. Real estate tycoons like Mort Zuckerman were taken in by Madoff. There are countless other Jewish organizations and other firms that trusted Bernard Madoff with their investments and are now penniless because of this misplaced trust. The ripples of distrust and unbelief are still radiating throughout the entire Jewish philanthropic world. How one man could be so destructive seems to boggle the mind. Remember that the Enron scandal involved $63.5 billion and Madoff is alleged to have bilked investors out of $50 billion in a Ponzi scheme that very few understand could have lasted for 25 years. But Madoff counted on Jews trusting Jews. A confidence man requires this trust while he practices his particular form of legerdemain. For those who are counting their blessings that they got out of their association with Madoff years ago before it was revealed that he was unscrupulous and downright crooked, there remains the looming possibility that they may not be so lucky. It is increasingly possible they may be forced to repay their funds back to the firm now that Madoff has agreed to a freeze of the assets of Bernard L. Madoff Investment Securities, LLC and that everything in that account is turned over to a receiver, Irving Picard. Andrew Calamari, the SEC enforcement official in charge, announced that Picard will act as Receiver under the Securities Investment Protector Act (SIPA). The potential for this so-called clawback action has lots of former investors especially nervous. Imagine investing with Madoff years ago, getting a payoff, investing with another firm and then taking a huge hit with the decline of the market this past year. It is possible that all of those funds could be forced to be repaid to Picard as Receiver. Picard supersedes the previous Receiver, Lee Richards of Richards Kibbe and Orbe LLP, who continues to act as the Receiver for Madoff Securities International, Ltd. It is all part of the intricately woven web of deceit that is only now coming to light. Many people were surprised to learn that major banks and hedge funds had assigned part of their portfolios to Madoff, based on his performance and promised 8% return to investors. Feeder brokers for financial institutions would regularly send Madoff business, some of which he accepted. At other times, he apparently rejected other customers. For example, a well-known financial institution like Oppenheimer Funds, through its Tremont Funds Group, used Madoff for investment purposes. The amount of litigation that will ensue these actions will clog court dockets for the next decade. Far more badly than the loss to the banking institutions are those heartbreaking cases of couples who invested all of their life savings with Madoff and retired to places like Boca Raton, figuring their nest eggs would last them in their golden years. Now they are all at risk of losing everything they scrimped and saved for over decades. Frantic calls to children and relatives have been reported through the news media. That Madoff took away their life savings is a shame and a tragedy. But his greater crime was that he took away their hope and their independence. Madoff remains under house arrest in his tony $10 million New York City apartment now that the magistrate judge in his case took away his right to leave during the day. Except for court appearances that's where he will stay for the foreseeable future.