(pronounced MADE-off, as in made off with $50 billion)
was a major donor to Democrats and to Jewish charities.
NY Post:
FIENDISH FRIEND
SOURCE: BERNIE FLEECED WIDOW AS FRAUD FAILED
Last updated: 6:24 am
December 21, 2008
Posted: 1:46 am
December 21, 2008
Bernie Madoff's alleged Ponzi scheme hoodwinked tens of billions of dollars from deep-pocketed banks and hedge funds - but the 70-year-old Wall Street icon appears to have saved his most vicious losses for his closest friends.
For example, Madoff convinced one decades-long friend, a 60-something woman whose husband recently died, to hand over her entire life savings for safe keeping as his alleged fraud was unraveling - just weeks before his arrest, The Post has learned.
"She called Madoff because she didn't know what to do with her finances and he told her 'Don't worry, I'll handle everything' and then he took all her money," said a mutual friend of the two, who is disgusted at Madoff's behavior and the havoc it is wrecking in his Boca Raton-area community.
"Bernie knew her for decades, they golfed together at the Boca Rio Country Club and now she has lost everything," said the friend, who spoke on the condition of anonymity.
Carl Shapiro, a women's-wear magnate and one of the most generous philanthropists in America, gave Madoff his start in the investment business in 1960. But that didn't stop Madoff from conning him out of $545 million.
Shapiro, who is 95 and quite frail, was deeply saddened by the news that the man he often called "his son" was in fact a confidence man.
"I was stunned and saddened to learn about the allegations against Bernie Madoff," Carl Shapiro said. "It is devastating to think that so many charities, individuals and institutions that had put their trust in Mr. Madoff have had their lives so negatively impacted."
Robert Jaffe, another of Madoff's buddies who lost millions to the scamster, is married to Ellen Shapiro, Carl Shapiro's daughter. It was Jaffe who introduced his father in law to Madoff, something close friends now say he deeply regrets.
Jaffe was considered one of Madoff's closest personal friends, having known him since the late 1950s, when Madoff was a lifeguard in Far Rockaway, Queens. He touted his close personal friendship with the fraudster to other wealthy types in New York, Palm Beach and Boston, to attract investors. He and his wife Ellen claim they knew nothing of the secret double life lived by their close friend. They, too, are understood to have lost tens of millions of dollars in the scheme.
Real-estate developer Edward Blumenfeld, another of Madoff's small circle of friends, who took joint family vacations with the alleged fraudster, stands to lose more than just the millions he invested with Madoff.
The founder of Syosset, N.Y.-based Blumenfeld Development Group is a 50/50 partner in a $24 million Embaer Legacy corporate jet with Madoff, The Post has learned, and may soon be hearing from the receiver of Madoff's business - who'll be happy to learn he has another $12 million (Madoff's share of the plane) of assets to marshal.
The jet is based at Long Island's Republic Airport and is managed and leased out by Talon Air to help, a spokesman for Blumenfeld said, "defray its operating costs." The Blumenfelds and Madoffs used the plane on family vacations, said one Florida-based source.
Madoff, 70, a Wall Street icon, was arrested by federal agents on Dec. 11 after admitting to his sons that his entire professional life was a lie built upon a Ponzi scheme. He told his sons that the fraud amounting to more than $50 billion.
Federal agents are now poring through Madoff company records to determine the exact level of missing money - but it already known the massive alleged fraud has stretched around the world.
Walter Noel, the head of Fairfield Greenwich Group, a hedge fund of funds firm, had more than $7.5 billion of clients' cash invested in Madoff - all of it is probably lost. No single person funneled more cash to Madoff than Noel, who in return for his decades of loyalty will now likely see his firm collapse.
Down in Palm Beach, Fla., where the country club set is among the hardest hit by the alleged fraud, Richard Rampell, an accountant with several clients who lost millions to the apparent fraud, said he believes Madoff started operating his investment advisory business above board but then got in over his head and turned to fraud to inflate his returns.
Rampell based his assessment on 1985 statements from Madoff which he called simple and ordinary. More recently the statements became more obscure and complex.
"Perhaps back then he was running a legitimate business?" Rampell said. "As I say, it didn't seem out of the ordinary to me."
---
SYNAGOGUE OF $UFFERERS
BERNIE'S SCAM HITS ELITE TEMPLE
By STEFANIE COHEN and KELLY MAGEE
TAKING THE FIFTH:
The fraud by Bernie Madoff, here with wife Ruth, burned notable Fifth Avenue Synagogue members.
Last updated: 6:21 am
December 21, 2008
Posted: 1:46 am
December 21, 2008
Members of a posh Upper East Side synagogue suffered a $2 billion bloodbath in Bernie Madoff's epic Ponzi scheme.
The Fifth Avenue Synagogue ranks with the decimated rolls of the Palm Beach Country Club in terms of members scorched by the scam.
Ira Rennert, chairman of the synagogue's board and owner of the priciest mansion in the Hamptons, had $200 million staked in Madoff's fund, Fortune magazine reported.
He was one of at least 10 synagogue heavy hitters fleeced in the scandal, said a prominent congregant.
The synagogue was a breeding ground for Madoff investors given that its president, J. Ezra Merkin, reportedly served as a powerful recruiter for the alleged scamster.
Merkin is said to have given Madoff, who does not belong to the synagogue, access to a slew of universities and Jewish organizations.
Merkin had $1.8 billion wrapped up with the shady investor through his fund, Ascot Partners - in many cases, without his clients' knowledge.
Other prominent Fifth Avenue Synagogue members who took a bath include Elie Wiesel, the author and Nobel Peace Prize winner, whose foundation lost $37 million, and investment banker Michael Jesselson, whose SAR Academy, an Orthodox Jewish school in The Bronx, took a $1.3 million hit, Fortune reported.
"Obviously, it's a black eye for the synagogue," said financial adviser and synagogue member Joseph Sprung of the extraordinary losses members suffered in Madoff's $50 billion wipeout.
Almost a dozen prominent families of the synagogue - the favored New York house of worship for former Israeli Prime Minister Benjamin Netanyahu - sustained heavy losses in the Madoff madness, one congregant estimated.
"The synagogue isn't going to be wiped out, but it's an awful thing to have happened," said Sprung, who was not invested with Madoff.
The close-knit, 300-family congregation was dubbed by the author Herman Wouk, a member, as a "Who's Who of World Jewry."
"Everyone at that temple is a power player," said member Moreton Binn. "It's probably the most affluent temple in the city."
Revlon CEO Ron Perelman, a temple member, didn't invest with Madoff, his spokesman said.
"Ezra is a brilliant, scholarly man. He's brilliant in Judaic studies, he's just incredibly smart," said congregant Ellen Fawer.
Others doubted Merkin would be able to stay on as president as a result of legal troubles that will certainly ensue in coming weeks.
"Obviously, he will have to step down," said a member who asked not to be identified by name. "He's being sued all over the place."
Yeshiva University invested $110 million with Madoff, likely at Merkin's urging.
Billionaire Daily News owner Mort Zuckerman lost $30 million from a charitable foundation that he'd invested with Merkin only to discover that Merkin had put it in Madoff's fund.
Tufts University and New York Law School also signed hefty checks over to Merkin, who in turn placed the money in Madoff's care.
"Mr. Merkin and his family are personally among the largest victims of the massive fraud confessed by Bernard Madoff," said Merkin's lawyer.
The controversy didn't stop Merkin from attending yesterday's 9 a.m. service, where he was "warmly received," said a member who asked not to be named.
Meanwhile, the FBI admitted that the Madoff scandal had grown so large that it was forced to shift agents from counterterrorism operations to the alleged swindler's case, among other Wall Street scandals.
stefanie.cohen@nypost.com
---
HURRICANE MADOFF TEARS UP TONY TOWN
Comments: 3Read Comments Leave a Comment By MARK DeCAMBRE
Last updated: 6:26 am
December 21, 2008
Posted: 1:46 am
December 21, 2008
The tiny, tony south Florida enclave of Palm Beach may never be the same now that Hurricane Madoff has blown through.
Doug Kass, a hedge-fund manager and resident of the town, says he expects inter-family warfare to break out any day as families who were late investing money with Madoff and lost millions in the alleged Ponzi scheme start suing friends and neighbors who already cashed in their Madoff profits.
"There's a growing recognition that [Madoff's scandal] is going to create a schism in the Palm Beach community," Kass told The Post. "Because those [investors] who redeemed money before the news of the fraud emerged will be involved in lawsuits from those who didn't get out in time."
Kass, who lived blocks away from Madoff's Palm Beach manse, notes that the tightly knit community, which had come to accept the Queens-bred money manager as one of its own, could be ripped apart by the infighting.
Palm Beach finds itself one of the hardest-hit towns because the avuncular Madoff had a home there and slowly gained the community's trust, becoming one of its most-respected members, notes Kass.
"This incredulous feeling is permeating the town," Kass notes. "It's not like everyone gave their money to a money manager in absentia or someone who was distanced socially - this man was immersed in the community.
"His role in particular as it relates to the Jewish community was profound in scope and in depth," he adds.
Traditionally populated by part-time, wealthy residents who use it as a winter vacation home, now charities, endowments and lifestyles are coming unhinged.
"Coming back to Florida, after a week in New York City, feels like being back in a war zone," Kass adds.
"For sale" signs have been popping up all over town, and country club memberships are being canceled. Days after the Madoff story unfolded, Kass said three investors with about $1 million each invested with the broker/dealer sought him out for counsel at his home.
"Sure I had friends that had outsized investments in Madoff that were attracted by his steady returns, who had $10 million and $25 million each," Kass said. "But it wasn't those people's losses that sent chills up my spine. It was those three people who had come to my home who'd lost 90 percent of their net worth."
***
GJ - The Arizona Baptist Foundation promised people a 15% return on their money, based on real estate values. A top CPA firm gave Arizona Baptist a clean bill of health. So Baptists fleeced Baptists. Investors lost 90% of their money. I had lunch with the lawyer who was hired to tell people the bad news.
Those who handle money learn right away that no one can make more than 5-7% after inflation, year after year. There are decades when the stock market made no gains at all. A bad year is difficult to make up because a 10% loss followed by a 10% gain is not even going to net the orginal amount. Say $100 lost 10%. So you have $90. If that gains 10% (which is unlikely), the total is still only $99. So you have made $1 on $100 in two years. Not impressive.
The more someone aims at high returns, the greater the risk of a huge drop in value. A 15% return one year can yield a 40% loss the next year.
Moral of this story - the best way to get ahead now is to reduce all credit card debt to zero (best return on the dollar). A credit union pays 5% interest on certain accounts, not necessarily large ones. When it comes to investments, cash will be king for a long time to come. Distrust of Wall Street is pandemic.
---
Bruce Church has left a new comment on your post "Con Men Usually Con Their Own: Torn from the pages...":
The Jewish and Baptist fraud cases are examples of Affinity Fraud:
http://www.religionnewsblog.com/23080/nakami-chi-group-ministries-international-3
excerpt: The fraudsters who promote affinity scams frequently are - or pretend to be - members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse.
***
Affinity Fraud - Lessons from the Arizona Baptist Ponzi Scheme.
