For the victims of Madoff, the tragedy continues after the death of the scammer

Charlie Taylor

Bernard Madoff passed away in prison on Wednesday, but that doesn't change the situation of his victims much, many of whom are still waiting to be compensated with their share of the $ 20 billion that disappeared with the coup d'état in 2008. The recovery effort, still underway in court more than a decade later, has been remarkably successful in recovering face value (interest-free), under the circumstances. But this is hardly comforting for investors who have lost their savings or turned their lives upside down. And none of them will ever see a penny from the $ 45 billion in false commercial profits that Madoff guaranteed was safe in his retirement accounts.

"There are still people who are vitally suffering from what he did," said Burt Meerow, an 82-year-old Vermont retiree who refused to reveal how much he lost, he said in an interview. “The tragedy continues. He no."

Another victim, New York artist Alexandra Penney, who published a memoir entitled "The Bag Lady Papers" about losing her savings, was more direct.

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"I am sorry that he is dead, because I wish he had been tortured much longer in prison and that he had been in solitary confinement," said Penney, who is renting a house in West Palm Beach, Florida, and who also refused to say how much she lost. "But now that he's dead, I'm going to dance at his grave." Emotions are still in the air for Richard B. Shapiro as well. The 67-year-old real estate investor Hidden Hills, California, who lost "a seven-figure amount" to Madoff and calls him a "psychopath," said he never forgot the shock of the news of Madoff's arrest. He remembers the coup collapsing the way people remember the 9/11 terrorist attack or the assassination of President John F. Kennedy, he said. "I hope he will rot in hell," said Shapiro, who was introduced to Madoff. by a friend and started investing with him in the 1990s. "He escaped easier, and I have no compassion for him or his family at all." Shapiro said he ended up selling bankruptcy filings for his two accounts in Madoff, one for 61.5 cents and the other – very early, he regretted – for 35, to help start his financial recovery.Madoff, who pleaded guilty to securities fraud in 2009, was serving a 150-year sentence in a federal prison in Butner, North Carolina. Five of his top advisers were convicted in 2014. Several others, including his brother Peter, pleaded guilty. The Madoff family was plagued by tragedy in the years after the coup collapsed. Madoff's eldest son, Mark, who was head of sales for the company's legitimate market-making business, committed suicide in 2010, on the two-year anniversary of his father's arrest. Her youngest son Andrew, who as head of shares helped build the company's proprietary trading desk, died of cancer in 2014. Neither was charged. The swindler's wife, Ruth Madoff, lives in obscurity, most recently in Connecticut, after being forced to leave her luxurious home on the Upper East Side. “Bernie, until her death, lived with guilt and remorse for her crimes,” said his lawyer, Brandon Sample, when announcing Madoff's death. “Although the crimes for which Bernie was convicted defined who he was, he was also a father and husband. He had a soft, intellectual speech. Bernie was not perfect. But no man is. ”Madoff's level of remorse has always been in question. Even from prison, Madoff said in recent years that he ran a real business for decades and that his biggest early investors were to blame for his crimes. He could have proved, he argued, if he had gone to trial. The people who put him behind bars do not believe this. “Madoff is a good example of the extent to which people who are involved in fraud can often be so deeply involved in their own lies that where the truth ends and the lie begins is obscured even for them, ”said Randall Jackson, a former assistant US Attorney in Manhattan who sued Madoff. "I have no doubt that Bernie fully understood that his activities were massively fraudulent for many decades and the sum total of his life was a huge lie."


Julian Moore, another former US assistant attorney who was one of the main prosecutors in the case, said Madoff's death and the sentencing of his top advisers "may be an outcome for some," but it is still not adequate justice. The government can help prevent recurrence by being fairer in its oversight priorities, he said.

As the country became obsessed with the drug war and prosecuted minorities disproportionately and unfairly, white-collar defendants like Madoff were running free until the 2008 financial meltdown revealed that the emperor was naked, Moore said.

For California's real estate investor Shapiro, it's even more blatant: "When I wrote to Judge Chin, I said he murdered people," Shapiro said of a letter he filed with the federal judge who oversaw Madoff's case. “People died, and these people died penniless. He ruined so many lives. He was a murderer, in my opinion. ”The Herculean effort to recover victims' money through bankruptcy court litigation has already repaid almost 70% of valid claims – a far better result than many expected. Even so, the process dragged on, creating uncertainty for many and a blizzard of paperwork for others. He was supervised by New York lawyer Irving Picard, the curator of Madoff's company in court. He recovered the funds by suing hundreds of customers who withdrew more money from their accounts than they deposited, spending profits that existed only on paper. Hundreds argued that they were victims a second time by this system. For them, they were spending money that they had every right to believe was theirs. Ultimately, this is not how the courts see it, and hundreds of former Madoff clients sued by Picard have reached agreements to help pay victims who have not withdrawn their money. Picard recovered more than $ 14 billion, much of it from large investors who reaped billions from Madoff's fraud, as well as from banks that actually did business with a swindler and allowed his scheme to continue. Madoff's admission that he spent years managing the massive fraud under the nose of financial regulators was a major blow to the Securities and Exchange Commission, compounded by the revelation that whistleblower Harry Markopolos' repeated warnings to the agency about Madoff were not heard. much bigger financial crisis, the SEC said that many of the reforms that followed were a direct response to the weaknesses exposed by Madoff.

Affected markets

Among these reforms were efforts to strengthen the SEC's oversight division and protect investors' assets through surprise examinations and stricter rules involving statements of accounts and custody of assets. In addition, a whistleblower office was set up at the SEC and the Commodity Futures Trading Commission to reward insiders and others who provide tips on financial irregularities. In addition to the U.S., investors in Switzerland were among those hardest hit by the scandal, which ended up helping to trigger the collapse of the hedge fund industry. These funds, which invest investors' money, have had losses every year since 2008, according to data compiled by Hedge Fund Research Inc.Source: Hedge Fund Research IncWhen investors learned of this exposure to Madoff, they struggled to withdraw their money, generating a withdrawal frenzy similar to a bank run. Madoff was a poison for hedge fund funds "that pride themselves on giving investors access to key managers," said Nicolas Roth, director of alternative assets at Geneva-based private bank Reyl & Cie. Meerow, the Vermont victim. , said he has been more careful and now invests only in what he understands – although he has not lost all confidence in Wall Street. "I don't think there are many Madoffs running around," he said.Read more: OnlyFans wins the cryptocurrency market competitor

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