UPDATE: Before you read about Madoff, take a look at Preznit Bunnypants ducking to avoid thrown Iraqi shoes. Sure he’s a war criminal, but he’s got pretty good reflexes for an old dude.
This Ponzi scheme will probably be the largest and longest-running investment fraud uncovered during the downturn, but it will not be the last. It’s related to Big Shitpile because, among other things, hedge funds are some of the big losers. From the New York Times:
The zoning lawyer in Miami trusted him because his father had dealt profitably with him for decades. The officers of a little charity in Massachusetts respected him and relied on his advice.
A charity - this doesn’t look good.
Wealthy men like J. Ezra Merkin, the chairman of GMAC; Fred Wilpon, the principal owner of the New York Mets; and Norman Braman, who owned the Philadelphia Eagles, simply appreciated the steady returns he produced, regardless of market conditions.
But these clients of Bernard L. Madoff had this in common: They chose him to oversee much of their personal wealth.
And now, they fear, they have lost it.
And how come these things never happen to the fucking Yankees?
The first class action has already been filed against Madoff’s firm (and, presumably, Madoff). More will follow, but from the sound of things, there won’t even be marrow in the bones of the carcass. It’s all gone.
A little background:
While Mr. Madoff is facing federal criminal charges, accused by federal prosecutors of operating a vast $50 billion Ponzi scheme, many of his clients are facing an abrupt reversal of fortune that is the stuff of nightmares.
“There are people who were very, very well off a few days ago who are now virtually destitute,” said Brad Friedman, a lawyer with the Milberg firm in Manhattan. “They have nothing left but their apartments or homes — which they are going to have to sell to get money to live on.”
What I wouldn’t give to have an Upper East Side PUMA ask me for a buck in front of Lobel’s. Lots of rich people who wouldn’t piss on you if you were on fire are going to have to change their lifestyles. Unfortunately, other less contemptible types will suffer as well.
The news was equally devastating for the Robert I. Lappin Charitable Foundation in Salem, Mass., which works to reverse the dilution of Jewish identity through intermarriage and assimilation by sending teenagers to Israel and supporting other Jewish education efforts.
The foundation was forced on Friday to dismiss its small staff and shut down its programs to cope with its losses in the Madoff funds, according to Deborah Coltin, its executive director.
“We’ve canceled everything as of today, everything,” she said tearfully.
Ms. Coltin said she did not know how the little foundation came to be so exposed to the Madoff firm. Its most recent tax filings show that it had $7 million at the end of 2006, with $143,344 in stocks and the rest in “government securities.”
It reported the sale that year of “Bernie Madoff” securities, but did not explain what those securities were.
Schools and charities. Another fitting coda for the Bush years.