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When Celebrities Get Scammed
Madoff’s scheme empties high-profile coffers
In one of the biggest uster-clay uck-fays of our time, Bernard L. Madoff’s investment firm has been liquidated to recover cash and securities for clients, even as the higher levels of the pyramid continued to collapse. High profile victims include film giant Steven Spielberg; screenwriter Eric Roth (currently on the promotion tour for his film The Curious Case of Benjamin Button); and Frank Lautenberg, the multimillionaire Democratic senator from New Jersey.
Madoff is under the gun for allegedly running the biggest Ponzi scheme ever in the United States, with up to $50 billion at stake. Essentially, he used incoming capital to make payments to existing investors – without ever re-investing the money. Once there were no new investors to keep the cash flow moving, the whole scheme came to a screeching halt.
The investment firm handled the fortunes of people such as real-estate mogul Norman Levy, and his daughter Ms. Levy-Church’s charitable foundation. When news of Madoff’s arrest broke, the foundation was shocked – saying that the investment returns had always been steady and strong. Now, the foundation has been forced to close its doors, along with at least two others.
Bigger, more familiar names also lost big money in the Ponzi scheme collapse, including J. Ezra Merkin, the chairman of GMAC, and Fred Wilpon, owner of the NY Mets.
Spielbergs’s charitable foundation, Wunderkinder, went the way of many organizations hit by Madoff’s fraud. Wunderkinder won’t release exactly how much was lost, only saying that that the losses were nowhere near the $300 million that were being reported.
It’s also being reported that Dream Works Animation SKG chief executive Jeffrey Katzenberg has sustained Madoff-connected losses.
Thankfully, Madoff was arrested last week and has allegedly confessed to defrauding investors of $50 billion in a fraud that collapsed after investors tried to liquidate their assets due to the global financial crisis.
This Betty wants to know: How many other Madoffs are lurking out there, waiting for be uncovered when we do something as simple as ask for our money back?