“It’s all just one big lie.”
With those words Bernard Madoff confessed to senior executives of Bernard L. Madoff Investment Securities that the $17 billion hedge fund company he founded was nothing more than a Ponzi scheme.
According to Timeonline.com, Madoff is at the center of “the largest investor swindle ever blamed on a single individual.”
Madoff was arrested Thursday by Federal agents and charged with securities fraud. In its complaint the Securities and Exchange Commission said Madoff was at the head of an “ongoing $50 billion swindle.” He could face 25 years in prison.
The news that broke today on the front pages of the New York Times and the Wall Street Journal reverberated in Jewish communities across the world.
“A lot of Jewish charities had investments with him,” one prominent investor—who said he had no connection to Madoff—told The Jewish Journal. “So did a lot of Jews.”
The collapse of the Madoff business leaves a mess that is yet to be sorted out and whose victims are just coming to the fore.
But what’s already clear is that Madoff used his ties to the Jewish community to garner at least some of his ill-used funds.
Madoff is a trustee of the Yeshiva University and a long-time philanthropist in Jewish circles.
According to Yeshiva University, “Bernard L. Madoff, a member of the University’s Board of Trustees since 1996, was elected chairman of the Board of Directors of Sy Syms School of Business in 2000. Mr. Madoff is chairman of Bernard L. Madoff Investment Securities, one of the nation’s largest third-market dealers in New York Stock Exchange and over-the-counter securities.
A benefactor of the University, Mr. Madoff recently made a major gift to the Sy Syms School.”
The first known charity victim, according to JTA, is the The Robert I. Lappin Foundation in Salem, Mass. which gave away about $1.5 million to Jewish causes.
After Madoff’s arrest, The Robert I. Lappin Foundation in Salem laid off all of its employees and locked its doors on Friday after its benefactor’s assets were frozen because they were invested with Madoff.
“Mr. Lappin investments were frozen,” the foundation’s executive director of the foundation Deborah Coltin told JTA. “The assets are frozen. We have no money. The foundation cannot access its money.”
Lappin, who was reached by JTA Friday afternoon, said that he lost $8 million – the entirety of his foundation’s money – because it was invested with Madoff. Lappin, who had been involved financially with Madoff since 1991 also took a “significant” hit personally. He said that he knew nothing of Madoff’s fraudulent activities.
The foundation, which gave away about $1.5 million per year to Jewish causes, let go all of its workers, one fulltime employee and six part-time employees.