New York – Richard Shapiro, a victim of Bernard Madoff’s $65 billion Ponzi scheme, told a judge he lost 30 pounds due to stress and couldn’t leave his home for three weeks after the financier’s Dec. 11 arrest.
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Shapiro’s story, detailed in a March 10 letter, was made public by the government today, along with dozens of other messages citing financial ruin and personal anguish. Many of the victims blamed the U.S. Securities and Exchange Commission for failing to uncover the fraud.
“Today we live in fear, mistrust, and are captive to the hope that the federal government will provide some relief to us for their failure to properly regulate, and do their job,” Shapiro, of Hidden Hills, California, said in his letter. “We are emotionally forever damaged.”
Madoff, 70, pleaded guilty before U.S. District Judge Denny Chin in Manhattan on March 12 to 11 counts including money laundering and fraud. He faces a prison sentence of as many as 150 years. Earlier today, a federal appeals court in New York rejected his bid to be freed before he’s sentenced in June.
“My husband served in the Vietnam War and now I feel our country, through the SEC, has let us down,” Lynn Sustak, of Atlanta, who invested with Madoff beginning in 2003, said in her letter. “Over time, most all of our savings were placed in the hands of Bernard Madoff. Our retirement looks bleak.”
Madoff admitted he used money from new investors to pay off old ones and said the global fraud began in the early 1990s. Prosecutors said they’ll seek to seize more than $100 million in assets from Madoff and his wife, Ruth.
Alzheimer’s Patient
Some of the messages released today by prosecutors had senders’ names blacked out. Others were written by relatives on behalf of elderly or ailing victims, including an 87-year-old Alzheimer’s patient who lost her $500,000 life savings.
“That money was for her to live out the rest of her life in comfort,” a child of the Alzheimer’s patient wrote in a March 9 e-mail that had the name redacted. “She is very depressed and can’t understand why this happened to her.”
Until now, most attention has been given to celebrities, hedge funds and banks around the world that lost money in Madoff’s scam. Many of the victims revealed today cite relatively smaller losses that accounted for larger shares of wealth.
‘Not Rich’
“I am not rich,” a 52-year-old self-employed woman in California wrote in a letter. “The entire amount I lost was nowhere near a million dollars, but I was proud I had saved it. I do not own a home to sell. I do not have anyone to support me in my old age.”
Shapiro, the California investor, wasn’t the only one driven to despair by the shock of the fraud.
“I went into a deep depression and for the first six weeks was unable to eat,” an investor of 15 years said in a letter with the name redacted. “I still wake most mornings with a feeling of dread and disbelief — I’m still waiting to wake up from this nightmare.”
Many of the letters called on the government to make an extra effort to help victims.
Given the SEC’s failure, “it is certainly justice that everyone in the federal government do what he or she can to ameliorate this situation,” said Eugene Wolsk, 80, of Montauk, New York, who invested with Madoff for 21 years.
‘Serious Trouble’
“We are in serious trouble,” Wolsk’s wife, Laura, who has been forced to go back to work, said in a separate letter. “This is no time to sell a house and we don’t have money to keep it up.”
Wolsk and his wife aren’t the only victims whose only remaining asset is their home.
“Other than the value of our home, which we are presently attempting to sell, we have no other assets,” a 74-year-old anonymous victim in Florida wrote in a letter. “Finding employment at this point is almost impossible.”
The letters detail the lives of people who saved in the neighborhood of several hundreds of thousands of dollars and who were preparing to retire, or had already retired.
“All of my well-thought-out plans are now in shambles,” wrote a retired former U.S. sailor living in Pennsylvania. “Not only will I not be able to retire at what Americans consider the normal retirement age of 65, but retirement at any age is out of the question.”
A Florida couple that invested $853,000 since 1992 said in a letter that their “Golden Years” had been taken from them, and they expressed doubt that employers would be interested in “a guy with a gimpy leg and woman who has fought cancer.”
SEC Faulted
“What was the supposed role of the SEC during the years of our investment,” the couple wrote in their letter. “We didn’t not profess to be investment experts or economists; we could have used some government expertise and oversight.”
Most of the letters shared that theme: blaming the SEC.
“Since one of the reasons the SEC exists is to provide the investor with a sense of confidence, we had once again a legitimate expectation that nothing was wrong,” said a victim whose name was redacted. There’s a “level of disgust with the government and its non-existent efforts to protect us all,” the letter stated.
At least one letter suggested the government itself pay victims.
“I relied on the regulatory system for securities and banking when I invested my earnings,” an anonymous investor wrote. “What more could I do than that? When an individual screws up, he pays; so why can’t the government pay when they screw up?”
Widow’s Plight
Another victim in New Jersey cited family losses that struck parents and children alike, just 18 months after the death of a father-in-law, who “left his wife believing that she would be able to live in a safe and secure lifestyle.
“She may not be able to maintain her home and living expenses, forcing her to move in with her children, all of whom were Bernard Madoff investors and are now struggling financially,” the investor said in a letter with the name blacked out.
A New York real-estate broker who invested her inheritance and a divorce-settlement with Madoff, said she hoped to build a nest egg to leave for her three children and their grandchildren.
“Bernard Madoff took my hopes, dreams and self-esteem,” the broker said in a letter. “I feel violated and insecure, as I do not know what the future holds for me.”
Indeed very sad
WOW, crazy Stuff
I don’t understand this story, did he really do this purposefully or it happened because the investments were losing? I can’t believe how someone could be so evil if this was done knowingly. I hope all those that lost be comforted !!
Hashem Y’Rachem
I’m sorry to say, and its a real shame what happened and all, but these people were scammed. The government, and by extension the taxpayers, have zero responsibility to “bail out” or otherwise reimburse any of the victims. For that matter, the Madoff scam victims, in the eyes of the law, are no different than the many other victims of many other scams.
Sure, the govenrment should make every effort to repatriate the money with the victims. And yes, whatever tax implications there are should be addressed. But that’s it. There should be no liability shouldered by the tax base for this scam, and if there is, then you have to open it up to all scams.
So now I through my agent, the government will be held responsible. I’m sorry but that’s totally unfair.
“Over time, most all of our savings were placed in the hands of Bernard Madoff. Our retirement looks bleak.” ………….
I do not want to sound cold but anyone who can trust one person by giving millions or even thousands of dollars should have their head examined. This is GREED on everyones part not just Bernie Madoff. You never put all your eggs in one basket.
When a friend of mine was confronted by people working for Bernie Madoff and was asked to give 5 million dollars in return for crazy returns my friend did his due diligence and went onto the internet and typed in bernie Madoff to see how he invests everyone money and my friend could not find one legit anything about him.
My friend told me he can’t understand how people could be so stupid.
The only answer many people can think of is people really knew that Bernie was a thief but did not care because as long as they were collecting checks why should they care.
Bernie Madoff affair should teach everyone a big lesson to trust in g-d and stop trusting in human beings. People who trust in g-d never lose.
i feel bad for all who lost money, but in the other hand i don’t think its right to put some one in a cell for 23 hours with out a window ,its not the American way and its not fair
his wife and kids and grandkids should be living in a shelter on the Bowery and eating in a soup kitchen.
If this money would be in the stock market are real estate it also would of been gone mr madoff tried his best he did same like 95 percent of investors they all live on a high life style till they go bust if you won’t to be safe with your money keep it in the bank for 1percent if you take your money any place else you have a 50 50 chance to loose so don’t blame poor little bernie
Terrible stories
In defense of those blaming the SEC, their job is to protect the public from people like Madoff.
The SEC was given credible evidence that there was fraud and they ignored it. They couldn’t investigate the one who as rubbing shoulders with them all day. They ignored the evidence and the public was defrauded.
It’s obviously Madoff’s fault, but also the fault of the agency designed to protect the public from this fraud if it’s clear, as it is in this case, that they didn’t do their job.
Those talking about all eggs ion one basket, obviously don’t have Roth IRAs or SEP IRAs or 401Ks,because those of us who do, usually have them with one broker. I personaly don’t know anyone using more than one.Maddoff seemed to have the best track record, and was insuresd by the SPIC so they used him.
Now they lost their hard earned life savings & pensions,hoe dare you call them greedy?
As for the jail cell being as mentioned above, I don’t know where you get that from, but if true, I think he deserves a lot worse, and he should feel comfort that he is getting puunished, after hurting so many. There have already been sucides, and others have lost interest in living, why should he be allowed a better life then he caused to others.I cannot have pitty on him, it would be a meracheim al achzorim, which levasof makes you a mechsor al rachmonim.
What about all of us that invested in LehmanBros? I lost more than supposedly the 30-50% you mention. Stocks and wild investments are nothing more than Gambling, the chips can go up and down at any time. Unfortunately, we only have ourselves to blame to believe outrages schmes and invetment brokers, who know how to take large commissions and bonuses.
Now we know, If your are really trully concerned invest in an FDIC backed security or better yet… make a sound investment in your Olam Habah and give more TZEDAKAH.
I have a close friend whose OWN HUSBAND took everything she had (her yerusha, etc) without her knowledge !!! He stole from others in their community, too (thru fraudulent “stock deals”) but she never gave him permission to take HER money . They are divorced now, and he is busy doing the same thing to wife #2 – talk about BETRAYAL ….
#20 israel is dealing with monsters who dont care about their own people let alone israelis most probably shalit is not alive anymore they want to trick israel into giving them the prisoners and then the will say we only have his bones theese animals the hamas are tootaly devoid of any human decency in short they are monsters in human form
These crybabies should look themselves in the mirror instead of blaming the govenment for not looking out for them. They could have easily put the money in the bank and gotten a guaranteed return but they let their greed get the best of them. They invested in what was a hedgefund and now they want the govenment to bail them out? How pathetic.