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Madoff Surfaces as Investigations into Scam Continue
By
Jen Chung
Published Dec 16, 2008
Modified Dec 16, 2008
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By
Jen Chung
Published Dec 16, 2008
Modified Dec 16, 2008
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The NY Post caught Bernard Madoff, who admitted his business was actually Ponzi scheme and probably lost around $50 billion of investors' money, "skulking" out of his East 64th Street apartment building and calls him "the Grinch who stole...everything"—as well as the "Most Hated Man in NYC." The Daily News runs down some developments, like how the FBI is looking for witnesses (like "the auditors working from a New City, Rockland County, storefront who certified Madoff's investment firm as 'solvent'") and the NY Times says that, so far, Madoff's family does not appear to be involved in the scam.
Victims include individuals saving up for a nest egg, charities of some notable people (Senator Frank Lautenberg, Daily News owner Mort Zuckerman, Steven Spielberg) and billion-dollar hedge funds. Clusterstock says the victims falls into four groups, "Superrich Individuals, Little Guys, Funds + Banks, and Charities + Universities + Hospitals" (see their list).
One example: J. Ezra Merkin's Ascot Funds lost nearly all of its investors' money—$1.8 billion—because it invested mainly with Madoff. So now Ascot clients have retained a lawyer because, the Times reports, "Mr. Merkin was charging them an annual fee of 1.5 percent of their investments in exchange for his services, which now appear to be little more than turning over the money to another investor altogether."
And Oppenheimer Funds' Tremont hedge fund had over half its $5.8 billion funds with Madoff. Bloomberg News reports, "Tremont, which manages a total of $5.8 billion, would have made roughly $62 million this year peddling funds that are solely run by Madoff... Hedge funds that invested with the 70-year-old Queens, New York-native charged fees to their clients for the task of vetting the fund."
Now it turns out that Madoff was keeping multiple sets of books and that it could take months for investigators to unravel his lies. One woman, a CPA who lost $500,000 with Madoff, told the Daily News she was eager to speak to the swindler, "I want to talk to him. I hope to speak with him. Tell him what I think of him. First, I'll ask why he did it. Then I'll proceed to use some expletives." Well, the SIPC says investors may be protected for up to $500,000, which is probably bittersweet when you've lost billions. Also: The Department of Justice's website for victims of Madoff's fraud ("We know that investors are anxious to learn whatever they can about the status of their investments and the assets of the Madoff companies. Although we cannot provide further details at this time, please be assured that all those involved are working diligently to investigate this matter and to locate and preserve assets that can be used for restitution to defrauded investors.")
Tagged
Bernard Madoff
hedge fund
investment
ponzi scheme
trading
victims
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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