Bernie Madoff’s alleged Ponzi scheme hoodwinked tens of billions of dollars from deep-pocketed banks and hedge funds – but the 70-year-old Wall Street icon appears to have saved his most vicious losses for his closest friends.
For example, Madoff convinced one decades-long friend, a 60-something woman whose husband recently died, to hand over her entire life savings for safe keeping as his alleged fraud was unraveling – just weeks before his arrest, The Post has learned.
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“She called Madoff because she didn’t know what to do with her finances and he told her ‘Don’t worry, I’ll handle everything’ and then he took all her money,” said a mutual friend of the two, who is disgusted at Madoff’s behavior and the havoc it is wrecking in his Boca Raton-area community.
“Bernie knew her for decades, they golfed together at the Boca Rio Country Club and now she has lost everything,” said the friend, who spoke on the condition of anonymity.
Carl Shapiro, a women’s-wear magnate and one of the most generous philanthropists in America, gave Madoff his start in the investment business in 1960. But that didn’t stop Madoff from conning him out of $545 million.
Shapiro, who is 95 and quite frail, was deeply saddened by the news that the man he often called “his son” was in fact a confidence man.
“I was stunned and saddened to learn about the allegations against Bernie Madoff,” Carl Shapiro said. “It is devastating to think that so many charities, individuals and institutions that had put their trust in Mr. Madoff have had their lives so negatively impacted.”
Robert Jaffe, another of Madoff’s buddies who lost millions to the scamster, is married to Ellen Shapiro, Carl Shapiro’s daughter. It was Jaffe who introduced his father in law to Madoff, something close friends now say he deeply regrets.
Jaffe was considered one of Madoff’s closest personal friends, having known him since the late 1950s, when Madoff was a lifeguard in Far Rockaway, Queens. He touted his close personal friendship with the fraudster to other wealthy types in New York, Palm Beach and Boston, to attract investors. He and his wife Ellen claim they knew nothing of the secret double life lived by their close friend. They, too, are understood to have lost tens of millions of dollars in the scheme.
Real-estate developer Edward Blumenfeld, another of Madoff’s small circle of friends, who took joint family vacations with the alleged fraudster, stands to lose more than just the millions he invested with Madoff.
The founder of Syosset, N.Y.-based Blumenfeld Development Group is a 50/50 partner in a $24 million Embaer Legacy corporate jet with Madoff, The Post has learned, and may soon be hearing from the receiver of Madoff’s business – who’ll be happy to learn he has another $12 million (Madoff’s share of the plane) of assets to marshal.
The jet is based at Long Island’s Republic Airport and is managed and leased out by Talon Air to help, a spokesman for Blumenfeld said, “defray its operating costs.” The Blumenfelds and Madoffs used the plane on family vacations, said one Florida-based source.
Madoff, 70, a Wall Street icon, was arrested by federal agents on Dec. 11 after admitting to his sons that his entire professional life was a lie built upon a Ponzi scheme. He told his sons that the fraud amounting to more than $50 billion.
Federal agents are now poring through Madoff company records to determine the exact level of missing money – but it already known the massive alleged fraud has stretched around the world.
Walter Noel, the head of Fairfield Greenwich Group, a hedge fund of funds firm, had more than $7.5 billion of clients’ cash invested in Madoff – all of it is probably lost. No single person funneled more cash to Madoff than Noel, who in return for his decades of loyalty will now likely see his firm collapse.
Down in Palm Beach, Fla., where the country club set is among the hardest hit by the alleged fraud, Richard Rampell, an accountant with several clients who lost millions to the apparent fraud, said he believes Madoff started operating his investment advisory business above board but then got in over his head and turned to fraud to inflate his returns.
Rampell based his assessment on 1985 statements from Madoff which he called simple and ordinary. More recently the statements became more obscure and complex.
“Perhaps back then he was running a legitimate business?” Rampell said. “As I say, it didn’t seem out of the ordinary to me.”