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Madoff Never Invested His Investors' Money
By
Jen Chung
Published Feb 21, 2009
Modified Feb 21, 2009
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By
Jen Chung
Published Feb 21, 2009
Modified Feb 21, 2009
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A meeting for investors of admitted Ponzi schemer Bernard Madoff was either confirmation of their worst fears or another shattering realization: The trustee overseeing Madoff's estate said that it appeared that the once-revered financial guru never made any of the investments that were listed on investors' statements. So while client were told their investments—which were supposedly earning attractive returns— were in stocks and Treasury bills, trustee Irving Picard said, "We have found no evidence to indicate that securities were purchased for customers’ accounts [for] perhaps as much as 13 years... [It was] cash in and cash out."
So far, Picard has received claims from 2,350 people (which total $1 billion) and he expected that the number of claimants will double by summer—and urged anyone who thinks they have a claim to file one. Picard added, “We are operating out of a crime scene," and described the many files seized, including 7,000 boxes found at a warehouse, "We’re getting a feel for how this operation worked."
Picard and a lawyer said they were working hard to recover money; one investor said,
“I would hope in the recovery you look not just for artwork but I would get the furniture, his clothes, the curtains on the windows," but apparently Madoff's personal assets, including his multiple homes, are untouchable until the federal investigation is over. One thing they will go after is investors who took more money than they invested—lawyer David Sheehan said, "We will be seeking to recover false profits from people who received them in substantial amounts over the years. You have to think of it this way: It’s your money.”
The NY Times reports, "Customers with valid claims, however, can be assured of receiving repayment only up to $500,000 from the SIPC fund. Any additional money they are owed must come from dividing the assets the trustee can find — and he has found less than $1 billion so far." One investor said the government should be involved, “This is a human tragedy like any other tragedy and we should be getting help from the government like any other victims. I lost my entire life savings that I worked for my entire life.”
Tagged
Bernard Madoff
duped investor
fraud
investor
ponzi scheme
SIPC
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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