Madoff Not Mourned by Many

Madoff Not Mourned by Many

The architect of the multi-billion-dollar fraud damaged institutions and individuals, as well as the Jewish image.

Dave Schechter is a veteran journalist whose career includes writing and producing reports from Israel and elsewhere in the Middle East.

Perhaps ironically, many victims of Jewish financier Bernie Madoff’s Ponzi scheme were, themselves, Jewish
Perhaps ironically, many victims of Jewish financier Bernie Madoff’s Ponzi scheme were, themselves, Jewish

Given the damage that Bernie Madoff caused in the Jewish world, the available reaction to his death was something other than suggestions that his memory be for a blessing. The more florid responses — in Yiddish and English — cannot be published in these pages.

Madoff, who was Jewish, died April 14, two weeks short of his 83rd birthday, in the prison hospital at the federal penitentiary in Butner, N.C., where he was serving a 150-year sentence.

Randi Cohn of Atlanta, who was among Madoff’s local Jewish victims, said, “It was overdue” when asked for reaction to his death. Cohn was able to recover what she had invested, but her late mother’s retirement account was lost. “It was a long time ago. I try not to think about him,” she said.

In a Ponzi scheme Madoff, operating through his firm Bernard L. Madoff Investment Securities, claimed to be managing upwards of $65 billion in investments. Madoff regularly sent individual and institutional investors reports showing impressive returns, even when the markets dipped.

Those reports were worth less than the paper they were printed on. A very real $17.5 billion from investors was lost. Money that came in one door from new clients went out another to keep longer-term clients happy.

All told, Madoff defrauded an estimated 40,000 people in at least 125 countries. As of this year, the federal court-supervised trustee has recovered an estimated $14.4 billion of Madoff’s ill-gotten gains for some 37,000 investors.

More than a decade later, a Jewish husband and wife in Sandy Springs remain sufficiently sensitive about having invested with Madoff that they asked not to be identified in this article. Even though their names appeared a decade earlier on lists of Madoff’s victims, the couple, now in their 70s, did not want to be exposed again. When the AJT asked about Madoff, the husband said matter-of-factly, “He died.”

The couple had invested at the urging of a relative who had a long-term relationship with Madoff. While declining to say how much money they lost, the trustee was able to recover the principal they had invested.

“The community needs to be reminded of how much he hurt not just the investors, but the Jewish image as well,” the husband said.

The December 2008 collapse of Madoff’s scheme was a figurative bombshell in the Jewish community. His clients included Jewish organizations in the United States and abroad, among them Yeshiva University, Hadassah, the American Jewish Congress, and numerous private schools, charities and private foundations. Many were damaged badly, some forced to fold.

Madoff’s individual Jewish victims included Holocaust survivor and author Elie Wiesel, director Steven Spielberg, movie producer Jeffrey Katzenberg, and Hall of Fame baseball pitcher Sandy Koufax.

Atlanta’s Jewish institutions escaped the havoc wreaked in New York, south Florida and Los Angeles. At the time, Steve Rakitt, then president of the Jewish Federation of Greater Atlanta, told the Atlanta Journal-Constitution that JFGA “had no exposure to Madoff indebtments.” Foundations owned by Home Depot co-founders Arthur Blank and Bernie Marcus also were unscathed.

However, despite the irony that many of Madoff’s victims were, like him, Jewish, anti-Semitic extremists took advantage of Madoff’s crimes to cast aspersions on the Jewish business community in general.

Madoff had been a stockbroker and made a legitimate fortune investing in computerized trading on the Nasdaq exchange, then part of the National Association of Securities Dealers, and became the exchange’s chairman. He began handling private clients in the 1970s. Over the years, the federal Securities and Exchange Commission did not discover the fraud, despite warnings by an investigator that Madoff’s investment returns were too good to be true.

As the economy worsened in 2008, Madoff could not meet the demands of clients wanting to liquidate their accounts. On Dec. 10, Madoff confessed to his two sons, who worked for their father, and they in turn called federal authorities. Federal authorities raided his Manhattan offices the next day and arrested Madoff at his penthouse home.

Madoff pleaded guilty on June 29, 2009, to 11 federal charges and was sentenced to 150 years in prison and ordered to make $170 million in personal restitution. He insisted in court that his sons were unaware of his scheme.

At sentencing, Madoff read a statement that said, “I am responsible for a great deal of suffering and pain. I understand that. I live in a tormented state now, knowing of all the pain and suffering that I have created. I have left a legacy of shame, as some of my victims have pointed out, to my family and my grandchildren.”

Before sentencing, numerous Madoff victims wrote to the presiding judge. One letter came from the Sandy Springs wife mentioned earlier in this article who said: “We both work full time and thank goodness own our own home. However, we now have nothing for our retirement. Over time, most all of our savings were placed in the hands of Bernard Madoff. Our retirement looks bleak as our investments are totally wiped out. My husband served our country in the Vietnam War and now I feel our country through the SEC has let us down . . . We can only plead that you will consider the enormous impact that Mr. Madoff has had on thousands of individuals and charities around the world. This is a terrible crime against mankind. We feel Mr. Madoff should be made to spend all of his ‘retirement’ in federal prison.”

The federal penitentiary at Butner is where Madoff spent the last 12 years of his life. In February 2020, he sought compassionate release, telling a judge that he was dying of kidney disease. In denying Madoff’s request, the judge said that his offenses were “one of the most egregious financial crimes of all time,” and that “many people are still suffering.”

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