The tiny, tony south Florida enclave of Palm Beach may never be the same now that Hurricane Madoff has blown through.
Doug Kass, a hedge-fund manager and resident of the town, says he expects inter-family warfare to break out any day as families who were late investing money with Madoff and lost millions in the alleged Ponzi scheme start suing friends and neighbors who already cashed in their Madoff profits.
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“There’s a growing recognition that [Madoff’s scandal] is going to create a schism in the Palm Beach community,” Kass told The Post. “Because those [investors] who redeemed money before the news of the fraud emerged will be involved in lawsuits from those who didn’t get out in time.”
Kass, who lived blocks away from Madoff’s Palm Beach manse, notes that the tightly knit community, which had come to accept the Queens-bred money manager as one of its own, could be ripped apart by the infighting.
Palm Beach finds itself one of the hardest-hit towns because the avuncular Madoff had a home there and slowly gained the community’s trust, becoming one of its most-respected members, notes Kass.
“This incredulous feeling is permeating the town,” Kass notes. “It’s not like everyone gave their money to a money manager in absentia or someone who was distanced socially – this man was immersed in the community.
“His role in particular as it relates to the Jewish community was profound in scope and in depth,” he adds.
Traditionally populated by part-time, wealthy residents who use it as a winter vacation home, now charities, endowments and lifestyles are coming unhinged.
“Coming back to Florida, after a week in New York City, feels like being back in a war zone,” Kass adds.
“For sale” signs have been popping up all over town, and country club memberships are being canceled. Days after the Madoff story unfolded, Kass said three investors with about $1 million each invested with the broker/dealer sought him out for counsel at his home.
“Sure I had friends that had outsized investments in Madoff that were attracted by his steady returns, who had $10 million and $25 million each,” Kass said. “But it wasn’t those people’s losses that sent chills up my spine. It was those three people who had come to my home who’d lost 90 percent of their net worth.”