Madoff Exploited the Jews

[BanglaBhoot]

By RONALD A. CASS

Steven Spielberg. Elie Wiesel. Mort Zuckerman. Frank Lautenberg. Yeshiva University. As I read the list of people and enterprises reportedly bilked to the tune of $50 billion by Bernard Madoff, I recalled a childhood in which my father received bad news by asking first, "Was it a Jew?" My father coupled sensitivity to anti-Semitism with special sympathy for other Jews. In contrast, Mr. Madoff, it seems, targeted other Jews, drawing them in at least in some measure because of a shared faith.

The Madoff tale is striking in part because it is like stealing from family. Yet frauds that prey on people who share bonds of religion or ethnicity, who travel in the same circles, are quite common. Two years ago the Securities and Exchange Commission issued a warning about "affinity fraud." The SEC ticked off a series of examples of schemes that were directed at members of a community: Armenian-Americans, Baptist Church members, Jehovah's Witnesses, African-American church groups, Korean-Americans. In each case, the perpetrator relied on the fact that being from the same community provided a reason to trust the sales pitch, to believe it was plausible that someone from the same background would give you a deal that, if offered by someone without such ties, would sound too good to be true.

The sense of common heritage, of community, also makes it less seemly to ask hard questions. Pressing a fellow parishioner or club member for hard information is like demanding receipts from your aunt -- it just doesn't feel right. Hucksters know that, they play on it, and they count on our trust to make their confidence games work.

The level of affinity and of trust may be especially high among Jews. The Holocaust and generations of anti-Semitic laws and practices around the world made reliance on other Jews, and care for them, a survival instinct. As a result, Jews are often an easy target both for fund-raising appeals and fraud. But affinity plays a role in many groups, making members more trusting of appeals within the group.

On one level, the number of these affinity frauds is testament to the strength of communities in America. Alexis de Tocqueville -- the one Frenchman generally admired by Americans for his good sense and understanding of our nation -- observed that we are a nation of different organizations and clubs, of civic groups and church groups, a web of social and ethnic and religious communities. We define ourselves as American, but also as Jews and Catholics, Mormons and Baptists, as Cuban and Italian, Irish and Japanese, as Rotarians and Masons, Democrats and Republicans.

Predictably, the Madoff story has prompted speculation about potential new regulations that might be imposed to head off future problems. Politicians and pundits have called for the adoption of new rules for securities markets in general and hedge funds in particular, even though Mr. Madoff didn't run a hedge fund and there is no shortage of existing securities rules that were violated by his reported conduct. (Keeping two sets of books suggests his own recognition of that.)

The SEC's failure to pursue complaints about Mr. Madoff over the past decade wasn't the result of inadequate regulations but of disbelief that someone so well entrenched in the industry -- a former Nasdaq chairman and SEC adviser -- was capable of committing such a callous crime.

Although regulatory initiatives routinely are taken off the shelf and offered up as the solution to a newsworthy problem, the conduct Mr. Madoff is accused of was illegal long before Charles Ponzi made pyramid schemes synonymous with his name. With so many aspects of our financial system under scrutiny today, and so many people in the government who regulate and write the rules for that system set to change, it hardly makes sense to go looking for ways to prevent new Madoff-like schemes.

So far as news reports can be trusted, Mr. Madoff appears to be a special case, someone whose whole career made fraud on this scale possible. His contacts and connections, his religion and affiliations, his public and private positions, all worked to make his funds look legitimate and exclusive. And he knew how to play his prospects, when to turn potential clients down, when to give something extra.

In retrospect, the current Madoff story is about someone who was as perfectly suited to swindling as Horowitz was to playing piano. The violation of trust at the heart of that story -- of trust by those with the greatest reason to trust -- cries out for sympathy. It illustrates the limits of law, not the need for more of it.

Mr. Cass is dean emeritus of Boston University School of Law, president of Cass & Associates, and chairman of the Center for the Rule of Law.

Madoff Exploited the Jews - WSJ.com

 

[TruthSeeker]

This is a huge story in the US. It is going to be like a Soap Opera Drama for weeks because of all of the prominent Jewish Hollywood people, media reporters and commentators, and special Jewish charities that were scammed. There is a Jewish charity in Washington DC that lost their entire endowment of $10M. This charity funded study visits to Israel for American Jewish teenagers so that the teenagers would appreciate their "roots" in Israel. I hope the US Congress does not give THEM a bailout!!! We'll see if the Jewish lobby in Congress is powerful enough to do THAT. I doubt it but you never know ......

 

[TruthSeeker]

Madoff Case Creates Worst Loss for Jewish Charities

By Philip Boroff and Patrick Cole
Dec. 17 (Bloomberg) -- New York’s Museum of Jewish Heritage recently cut its staff by 12 percent as it projects smaller donations following the worst year for U.S. stocks since 1931.

In the wake of the arrest of Bernard Madoff in what’s being called the biggest scandal in philanthropic history, museum Deputy Director Ivy Barsky expects more pain.

“It’s devastating, even for those of us who aren’t directly affected,” she said.

Madoff’s wealthy Jewish clients in New York, Boston and Palm Beach, Florida, are coping with pain and anger after disclosure of the alleged multibillion-dollar Ponzi scheme. The nonprofits they’ve funded will likely contend with budget cuts.

“I can’t think of anything since the Great Depression that had an impact of this size,” said Melissa Berman, president of Rockefeller Philanthropy Advisors in New York.

Jews in the U.S. give more than $5 billion to Jewish causes. Although they comprise just 2 percent of the population, Jews contribute 25 percent of the largest gifts to higher education, according to a recent study cited by Gary Tobin, president of the San Francisco-based Institute for Jewish and Community Research.

“To see foundations losing big parts or all of their assets through fraud has never happened before,” he said. “This is a tremendous violation of the public trust.”

The losses to Jewish philanthropists -- who include film director Steven Spielberg and real-estate developer Mortimer Zuckerman -- are in the hundreds of millions, if not billions.

Brandeis, Boston Museum

The $345 million Carl and Ruth Shapiro Family Foundation had about 45 percent of its assets invested with Madoff, a spokeswoman said. The foundation, a major donor to Brandeis University and Boston’s Museum of Fine Arts, was funded by Carl Shapiro, who sold his Kay Windsor Inc. women’s clothing business to VF Corp. in 1971.

“The Shapiro Family Foundation was shocked and horrified to learn about allegations against Mr. Madoff, who has long been considered a trusted and effective leader in the investment field,” a foundation statement said.

U.S. Senator Frank Lautenberg’s foundation was among the charitable groups that invested with Madoff, who told his sons he committed a $50 billion fraud.

The foundation run by Lautenberg, a New Jersey Democrat, invested $12.8 million of its $13.8 million in assets with Bernard L. Madoff Investment Securities at the end of 2006, according to a tax return for the organization.

The Lautenberg foundation’s largest donation in 2006 was $352,500 to the United Jewish Appeal of MetroWest NJ in Whippany, New Jersey.

Los Angeles Federation

The board of the Jewish Federation of Greater Los Angeles, the city’s largest Jewish nonprofit, may have suffered a Madoff- related loss of $6.4 million, or 11 percent of its endowment, President John Fishel said. It will meet next week to review investments and see “if any changes should be made,” he said.

The federation, with a budget of about $50 million this year, has “sufficient resources” to continue its mission of providing social services to the poor in the Jewish community, he said.

Yeshiva University lost about $110 million tied to the scandal, a spokesman for the New York school said.

Hedge-Fund Investment

Most of the losses were invested through hedge funds controlled by J. Ezra Merkin, who was a Yeshiva trustee and chairman of the school’s investment committee, spokesman Bill Anderson said in a telephone interview. Yeshiva, a 122-year-old private school that combines academic and religious education, has an endowment of about $1.2 billion remaining.

Ramaz, a Jewish school on New York’s Upper East Side, had about $6 million with Madoff. Congregation Kehilath Jeshurun, an Orthodox synagogue also on the Upper East Side, has about $3.5 million at risk.

“We are still in the process of gathering the facts and assessing the current status” of the investment, Eric Feldstein, the synagogue’s president, wrote in a letter yesterday to his congregation.

Maimonides School, an Orthodox day school in Brookline, Massachusetts, may have lost $5 million investing with Madoff, Chairman Jeffrey Swartz wrote to the parents of students.

Last night, about 1,100 attended the UJA-Federation of New York’s annual Wall Street dinner. On Page 2 of the program, Madoff is listed as an executive council member. The dinner raised about $18.8 million, down from $21.6 million last year.

“There’s no question a number of our large and medium donors were hurt by this,” Jerry Levin, the organization’s chairman and head of JW Levin Partners LLC, said in an interview. “I think the list is going to be considerably bigger.”

UJA-Federation of New York aids more than 100 health, education and community organizations. It said in a statement that it didn’t invest with Madoff.

 

[maqsad]

Looks like someone told Madoff what do do and say in order to maximise public sympathy for an investor bailout--which must be in the works.

 

[TruthSeeker]

Wall Street: The man American Jews hate more than Ahmadinejad
By ALLISON HOFFMAN

Now, American Jewry feels its future is under immediate existential attack - from a threat that was hidden within all along.

UNTIL THIS week, Jewish investors were no more or less exposed than everyone else to the economic downward spiral. The Wall Street firms that went down - Bear Sterns, Lehman Brothers - had Jewish roots, but they were no longer the Jewish companies they used to be. As a result, Israelis could be forgiven for being a little bit dubious about their American cousins' claims about financial despair, especially in the face of a genuine existential threat. Sure, okay, 40 percent of everyone's investment portfolios had been wiped out, but, hey, America was so rich to start with, and there was still the other 60% in the bank. It's just money, right?

Bernard Madoff changed all that. Here was a Jewish financier who, despite having billions in investments from large banks, appears to have focused heavily on building his investor network in the Jewish community. And the ripple effect is already being felt in Israel among organizations dependent on foundations that had invested in what Madoff himself allegedly described as "a giant Ponzi scheme."

This is not to say that Jewish causes have been the only, or even the biggest, losers in the implosion of Madoff's $50 billion securities operation. European banks, in particular, have lost billions.

But by shafting Jewish megadonors, Jewish charities and Jewish institutions - from hospitals and schools to nursing homes - Madoff earned himself a dubious honor once also bestowed on Iranian President Mahmoud Ahmadinejad: A full photo on the front page of the New York Post. The headline that ran with it? "The Most Hated Man in NY."

 

[Cheetah786]

Made_off TOOK OFF With 50billion dollars mostly jewish money also known as crocodile tears this is just a ploy to scam American Government.

 

[BanglaBhoot]

Americans will feel sorry for these rich Jews and give them a bailout......

Another way to see this is the weakening of the Jewish influence in American life. This might have positive implications provided another group like the Indians do not take over the role of the Jewish lobby.

 

[BanglaBhoot]

The Madoff affair

Con of the century

Dec 18th 2008 | NEW YORK
From The Economist print edition
There are no heroes in the Madoff story; only villains and suckers

BERNARD MADOFF worked as a lifeguard to earn enough money to start his own securities firm. Almost half a century later, the colossal Ponzi scheme into which it mutated has proved impossible to keep afloat—unlike Mr Madoff’s 55-foot fishing boat, “Bull”.

The $17.1 billion that Mr Madoff claimed to have under management earlier this year is all but gone. His alleged confession that the fraud could top $50 billion looks increasingly plausible: clients have admitted to exposures amounting to more than half that. On December 16th the head of the Securities Investor Protection Corporation, which is recovering what it can for investors, said the multiple sets of accounts kept by the 70-year-old were in “complete disarray” and could take six months to sort out. It is hard to imagine a more apt end to Wall Street’s worst year in decades.
Click here to find out more!
Click here to find out more!

The known list of victims grows longer and more star-studded by the day. Among them are prominent billionaires, including Steven Spielberg; the owner of the New York Mets baseball team; Carl Shapiro, a nonagenarian clothing magnate who may have lost $545m; thousands of wealthy retirees; and a cluster of mostly Jewish charities, some of which face closure. Dozens of supposedly sophisticated financial firms were caught out too, including banks such as Santander and HSBC, and Fairfield Greenwich, an alternative-investment specialist that had funnelled no less than $7.5 billion to Mr Madoff.

Though his operation resembled a hedge-fund shop, he was in fact managing client money in brokerage accounts within his firm, seemingly as Merrill Lynch or Smith Barney would. A lot of this came from funds of funds, which invest in pools of hedge funds, and was channelled to Mr Madoff via “feeder funds” with which he had special relationships. Some banks, such as the Dutch arm of Fortis, lent heavily to funds of funds that wanted to invest.

On the face of it, the attractions were clear. Mr Madoff’s pedigree was top-notch: a pioneering marketmaker, he had chaired NASDAQ, had advised the government on market issues and was a noted philanthropist. Turning away some investors and telling those he accepted not to talk to outsiders produced a sense of exclusivity. He generated returns to match: in the vicinity of 10% a year, through thick and thin.
Charming, but far too smooth

That last attraction should also have served as a warning; the results were suspiciously smooth. Mr Madoff barely ever suffered a down month, even in choppy markets (he was up in November, as the S&P index tumbled 7.5%). He allegedly has now confessed that this was achieved by creating a pyramid scheme in which existing clients’ returns were topped up, as needed, with money from new investors.

He claimed to be employing an investment strategy known as “split-strike conversion”. This is a fairly common approach that entails buying and selling different sorts of options to reduce volatility. But those who bothered to look closely had doubts. Aksia, an advisory firm, concluded that the S&P 100 options market that Mr Madoff claimed to trade was far too small to handle a portfolio of his size. It advised its clients not to invest. So did MPI, a quantitative-research firm, after an analysis in 2006 failed to find a legitimate strategy that matched his returns—though they were closely correlated with those of Bayou, a fraudulent hedge fund that had collapsed a year earlier.

This was not the only danger signal. Stock holdings were liquidated every quarter, presumably to avoid reporting big positions. For a godfather of electronic trading, Mr Madoff ran the business along antediluvian lines: clients and feeder-fund managers were denied online access to their accounts. Even more worryingly, he cleared his own trades, with no external custodian. They were audited, of course, but by a tiny firm with three employees, one of whom was a secretary and another an 80-year-old based in Florida.

Perhaps the biggest warning sign was the secrecy with which the investment business was conducted. It was a black box, run by a tiny team at a very long arm’s length from the group’s much bigger broker-dealer. Clients too were kept in the dark. They seemed not to mind as long as the returns remained strong, accepting that to ask Bernie to reveal his strategy would be as crass as demanding to see Coca-Cola’s magic formula. Mr Madoff reinforced the message by occasionally ejecting a client who asked awkward questions.

The trading business was hardly pristine either. It had been probed for front-running (trading for its own account before filling client orders) and separately found guilty of technical violations. Some clients reportedly suspected that Mr Madoff was engaged in wrongdoing, but not the sort that would endanger their money. They thought he might be trading illegally for their benefit on information gleaned by his marketmaking arm.

This failure of due diligence by so many funds of funds will deal the industry a blow. They are paid to screen managers, to pick the best and to diversify clients’ holdings—none of which they did properly in this case. Some investors are understandably irate that their funds—including one run by the chairman of GMAC, a troubled car-loan firm—charged above-average fees, only to plonk the bulk of their cash in Mr Madoff’s lap. This is the last thing hedge funds need, plagued as they are by a wave of redemption requests.

Financial firms that dealt with Mr Madoff are bracing themselves for a wave of litigation as individual victims go after those with deep pockets. Hedge funds will also face pressure to accept further oversight. But the affair shows the need for the government to enforce its rules better, rather than write new ones, argues Robert Van Grover of Seward & Kissel, a law firm.

Mr Madoff’s investment business was overseen by the Securities and Exchange Commission (SEC), but it failed to carry out any examinations despite receiving complaints from investors and rivals since as long ago as the late 1990s. As a Wall Street fixture, Mr Madoff was close to several SEC officials. His niece, the firm’s compliance lawyer, even married a former member of the team that had inspected the marketmaking division’s books in 2003—though there is no evidence of impropriety.

In a rare mea culpa, Christopher Cox, the SEC’s chairman, has called its handling of the case “deeply troubling” and promised an investigation of its “multiple failures”. Having already been lambasted for fiddling while investment banks burned, the commission is now likelier than ever to be restructured, or perhaps even dismantled, in the regulatory overhaul expected under Barack Obama. As The Economist went to press Mr Obama was expected to name Mary Schapiro, an experienced brokerage regulator, to replace Mr Cox.

The rules themselves will need changing, too. All investment managers, not just mutual funds, could now be forced to use external clearing agents to ensure third-party scrutiny, says Larry Harris of the University of Southern California’s Marshall School of Business. Regulation of financial firms’ accountants may also need tightening. And more could be done to encourage whistle-blowing. Mr Madoff claims to have acted alone. But given the huge amount of paperwork required to keep his scam going, it seems unlikely that no one else knew about it.

Above all, however, investors need to help themselves. This pyramid scheme may have been unprecedented, but the lessons are old ones: spread your eggs around and, as Mr Harris puts it, “investigate your good stories as well as your bad ones.” This is particularly true of money managers who work deep in the shadows or seem beyond reproach—even more so during booms, when the temptation to swindle grows along with the propensity to speculate. There will always be “sheep to be shorn”, as Charles Kindleberger memorably wrote in “Manias, Panics and Crashes”. Let us hope they never again line up in such numbers.

How Bernard Madoff did it | Con of the century | The Economist

 

[TruthSeeker]

Members of exclusive N.Y. synagogue lose collective $2 billion in Madoff scam

By Shlomo Shamir, Haaretz Correspondent
21/12/2008

Hanukkah, which began Sunday, will not bring light and joy to the famous Modern Orthodox synagogue, situated in an upscale Manhattan neighborhood, known to many within the Jewish community as the "Fifth Avenue Synagogue."

The revelation that has dampened the joy of the holiday for the Fifth Avenue worshippers is the discovery that the Madoff scam - the $50 billion "Ponzi scheme" that may rank among the biggest fraud cases ever - cost the members of the synagogue a collective $2 billion, the New York Post reported Sunday.

The fraud has crippled the synagogue, which boasts some of New York's elite

Bernard Madoff, who has been arrested on suspicion of having incurred the loss of $50 billion to charities, financial institutions and private investors, is not a member of the synagogue and did not attend it. However, several long-time Fifth Avenue Synagogue worshippers are among the list of the scam's biggest victims.

According to the New York Post, the synagogue was a breeding ground for Madoff investors given that its president, J. Ezra Merkin, reportedly served as a powerful recruiter for the alleged scamster.

At least 10 of the Fifth Avenue Synagogue members lost millions to the scam. The report names Ira Rennert, the chairman of the synagogue board, who reportedly invested $200 million with Madoff's company. Author and Nobel Prize Laureate Elie Wiesel was also listed as a long-time Fifth Avenue Synagogue member whose foundation lost $37 million.

Another synagogue member hurt by the scheme was investment banker Michael Jesselson, whose Orthodox Jewish school in The Bronx took a $1.3 million hit.

The Fifth Avenue Synagogue was founded some 50 years ago, and its official name is Ateret Zvi. Some 300 families belong to the synagogue.

 

[TruthSeeker]

Hadassah Zionist Women's Group Loses $90m

By Dana Weiler-Polak, Haaretz

Hadassah, the Women's Zionist Organization of America, said Thursday that it has lost $90 million it invested with Bernard Madoff, the Wall Street investment manager who recently admitted to a running a Ponzi-scheme fraud that totaled $50 billion.

The organization released a statment on Wednesday confirming the loss, but said that while "falling victim to this unprecedented fraud will require us to make necessary adjustments ... it has not in the slightest affected our commitment to our core Zionist mission. These are indeed turbulent times, but the key pillars of Hadassah remain as strong as ever."

Hadassah has provided significant funding to Hadassah University Hospital, Ein Karem in Jerusalem.

"I hope the situation will not affect the hospital," a senior doctor there told Haaretz. "The organization has maintained the hospital for many years," he added.

Unlike most of Israel's other hospitals, Ein Karem does not receive government funding, making it more dependent on donations that any other medical institution of its caliber.

The Women's Zionist Organization of America, which was founded in 1912 and has promoted many health and education projects in Israel, is the latest in what is becoming a long list of prominent Jewish organizations and investors to lose substantial amounts of money to Madoff.

 

[TruthSeeker]

Educational institutions brace for Madoff scandal fallout

Dec 22, 2008
By ABE SELIG, Jerusalem Post

As the damage from the Bernard Madoff scandal continues to unfold, educational institutions throughout the country are beginning to reveal just how badly they've been affected, and while the picture is still unclear, it's emerging as something less than pretty.

Two large charity organizations - the Chais Family Foundation and the Yeshaya Horowitz Association - both of whom gave extensively to Israeli universities and educational initiatives and had invested heavily with Madoff, were forced to shut down last week in the wake of revelations that the bulk of their finances were tied up in Madoff's scam - the largest Ponzi scheme known to date.

And while some Israeli educational institutions had invested directly with Madoff's firm - only to realize that those funds were gone the minute Madoff admitted to the depth of his scandal - even more of them were recipients of large donations from Chais and Horowitz, and are now reeling from the loss of not one but two donors who gave millions of dollars to their organizations over the years.

While the final picture of the damage won't be known for weeks, or even months to come, The Technion Institute - Haifa's internationally acclaimed institute of technology - may emerge as one of the universities hardest hit by the scandal.

While the university itself lost NIS 25 million in investments it had made with Madoff's firm, the institute's American fund-raising arm lost $29m. and tens of millions more in supposed profits through investing with Madoff, an organization spokesman said.

The American Technion Society lost its original investment with the fraudulent fund - plus $43m. in gains it reinvested - for a net loss of $72m.

 

[SherdiL!]

i've read the book myslef "ELIE WIESEL" i think its fake there are many obvious reseaons.

Pakistan Zindabaad

 

[TruthSeeker]

French manager, possible Madoff victim, dead in NY

NEW YORK, Dec 23 (Reuters) - A French executive whose fund reportedly lost large sums it invested with Wall Street adviser Bernard Madoff was found dead in New York City, police said on Tuesday.
It appeared "highly likely" that he committed suicide, said a source familiar with the investigation who spoke on condition of anonymity. A French newspaper also said he killed himself.
Madoff is the Wall Street fund manager who authorities say confessed to running a $50 billion fraud that may have ensnared investors and charities around the world.
Thierry Magon de la Villehuchet, 65, was co-founder of money manager Access International. He was pronounced dead at 8 a.m. (1300 GMT) at a Madison Avenue building in midtown Manhattan but a cause of death was not yet known, said Ellen Borakove, a spokeswoman for the New York City Medical Examiner.
New York City police said they were called to the building at 7.30 a.m.
Villehuchet had been trying to recover some of the funds lost to Madoff, Paris newspaper La Tribune reported on its website, citing a person close to Villehuchet. That source also told the newspaper Villehuchet killed himself.

 

[dabong1]

So out of 50 billion the jews lost a couple of hundred million...so what,it was more then likely insured.
Non jews lost billions.