The former Liberal Democrat peer Lord Jacobs of Belgravia today revealed that he was a victim of Bernie Madoff, the American fraudster whose $50 billion scam has plunged New York and London investment markets into turmoil. As investigators in the United States and London continued their probe into Madoff’s affairs, Lord Jacobs disclosed to the Evening Standard that he had suffered “a real loss”.
He declined to put a figure on the amount but said: “It’s not peanuts,” reflecting the fact that Madoff demanded at least $1 million from his wealthy clients and encouraged them to invest $10 million or more.
The 78-year-old peer is spending Christmas at his holiday home in Palm Beach, Florida, where he first met Madoff. “Such a charming man,” he said. “He was obviously very wealthy but he didn’t live high on the hog. I used to see him and we’d chat. He seemed like a very nice guy.”
Lord Jacobs, whose fortune was estimated at £128 million in this year’s Sunday Times Rich List, prospered with businesses including the British School of Motoring and fast food chains - Spudulike was one of his brands. He is thought to have given the Liberals and Lib-Dems more than £1 million over the past 20 years but he recently left the party to become a crossbencher. He cited differences with leader Nick Clegg over tax policies.
Like many casualties of 70-year-old Madoff’s fraud, Lord Jacobs was drawn into the scheme through social contacts in the wealthy Jewish community in Palm Beach. This was one of the main centres of Madoff’s operations where, according to the Standard’s inquiries, he operated with a cynicism that was breathtaking. While he and his wife Ruth were befriending people, his so-called fund was robbing them.
Now friends, such as Lord Jacobs, are left wondering how much the elegant and highly-likeable Mrs Madoff knew about what was happening. “It seems impossible that he could have acted alone,” Lord Jacobs said. “I found Ruth a rather quiet lady, concerned with her charity work. But she’s certainly no fool and his sons were closely involved in the business.”