For decades Madoff was a Wall St. icon. He was revered as an investment guru. There were 30 feeder funds bringing money into Madoff's pyramid scheme. The owner of the Mets was taken big time. One family lost 100 million dollars. The Securities and Exchange Commission cited the Madoff fund for three violations last year but did not investigate complaints that Madoff was running an illegal enterprise.
It all started to unravel a few weeks ago when European investors started cashing in. Madoff did not have the funds to pay them. Madoff fessed up to two employees who turned him in. It is obvious that Madoff did not run this scheme by himself.
This is the kind of crap that happens when the federal government refuses to do its damn job. Makes one wonder how many more pyramid schemes are running on Wall St. It is obvious that Madoff did not run this scheme by himself.
The roster of potential victims in what prosecutors said was a $50 billion Ponzi scheme has grown exponentially longer in the past few days.
Madoff, 70, said in regulatory filings that he only had around 25 clients, but it has become apparent that the list of people who lost money may number in the hundreds or even thousands. Among those who have acknowledged potential losses so far: Former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services.
A charity in Massachusetts that supports Jewish programs, the Robert I. Lappin Charitable Foundation, said it had invested its entire $8 million endowment with Madoff. The organization's executive director said she doesn't expect it to survive.
Other institutions that believed they had lost millions included The North Shore-Long Island Jewish Health System and the Texas-based Julian J. Levitt Foundation.
Hedge funds and other investment groups looked like big losers too. The Fairfield Greenwich Group said it had some $7.5 billion in investments linked to Madoff. A private Swiss bank, Banque Benedict Hentsch Fairfield Partners SA, said it had $47.5 million worth of client assets at risk.
The losses may have extended far beyond the coffers of the wealthy and powerful. The town of Fairfield, Conn., said it placed nearly 15 percent of its retiree pension fund with Madoff. Officials were scrambling to determine how much of the $42 million remained.
Harry Susman, an attorney in Houston, said he represents a group of clients who had unknowingly become entangled in the scandal by investing in a hedge fund managed by Merkin, which then put almost all of its $1.8 billion in capital in Madoff's hands. "They had no idea they had exposure," Susman said. He said his clients were now dumbfounded as to how the fund came to invest all of its holdings with just one man, especially since concerns had been circulating for years about Madoff's operations.
