Madoff Victims Speak
June 15, 2009 6:56 PM   Subscribe

Bernie Madoff's being sentenced June 29th. 113 of his victims have submitted impact statements. Here they are.
posted by davebush (40 comments total) 4 users marked this as a favorite
a) can Matt or Mods or poster put in warning on a PDF link?
b) So many of these are sad stories - I feel truly bad for these victims and I do not prescribe to 'the public be suckered' mentality that is in the investment world. Yeah - there's some responsibility to diversify and research investment choices, etc. - but it truly sounds like this guy suckered people hard and deserves the hard time!
posted by mctsonic at 7:07 PM on June 15, 2009

i don't know if i should blame my browser for not being able to handle pdfs well, or you for linking to one without mentioning it. i pick both.
posted by snofoam at 7:10 PM on June 15, 2009

And what about the forgotten victim?
posted by Joe Beese at 7:11 PM on June 15, 2009

Bitch, bitch, moan, moan. She was complicit, she deserves it.
posted by kldickson at 7:37 PM on June 15, 2009

I just took the time to read everyone of these letters. Wow. Heart breaking. Most of these victims statements are not from the folks who lost tens of millions but from the person next door who saved a few hundred thousand over the course of a lifetime so they could retire in dignity without being a burden on their family or the government. Yet, they now are. Most feel they are getting screwed again by both the IRS and by the administrator Pickard for the way he values their losses.

THe government has given out hundreds of billion sin stimulus pork; can it find a way to backstop these people so they don't lose their homes and their families?

God bless the victims. Fuck Madoff and his wife.


(Why didn't they redact personal information from these letters like phone numbers and addresses?)
posted by JohnnyGunn at 7:40 PM on June 15, 2009 [1 favorite]

Vanity Fair has a lengthy article on Madoff which doesn't appear to have been posted here: Madoff's World. Also an interview with Madoff's secretary: What the Secretary Saw.
posted by russilwvong at 7:56 PM on June 15, 2009 [1 favorite]

Just in case it wasn't obvious from the tone of what I linked to: She was complicit. She deserves it.
posted by Joe Beese at 7:57 PM on June 15, 2009

From page 38:

The disruption that he caused to his employees - legitimate hard working people - has been overshadowed and underrepresented . . . . The Madoff employees were also victimized after years of hard work and dedication.

Thank you,
Ken Hutchinson

Is this guy seriously complaining that there has been too much focus on the loss of investors' life savings and not enough consideration of Madoff's employees? Innocent though they may be, it seems a bit unseemly to ask to be recognized as victims if they lost only their jobs. I suspect that this fellow is going to be the recipient of some nasty e-mails from Madoff's real victims.
posted by ionnin at 8:28 PM on June 15, 2009

That guy's jail cell should be lined with this as wallpaper. He should spend every waking moment in that cell looking at wreckage he caused. Asshole.
posted by P.o.B. at 8:59 PM on June 15, 2009

The Madoff employees were also victimized after years of hard work and dedication.

Not all of them, surely. First of all, the work wasn't hard (sorry, I know, Daily Beast link), and second, you can't run a con on this scale or anything remotely approaching it without a core group of able lieutenants who are completely in on some or all of it. There'll be more prosecutions in the coming months and in the meantime, my heart really bleeds for these overpaid and underworked shills.
posted by George_Spiggott at 9:22 PM on June 15, 2009

That guy's jail cell should be lined with this as wallpaper. He should spend every waking moment in that cell looking at wreckage he caused. Asshole.

He's more than an asshole, he's a sociopath. To understand what effect papering Madoff's cell with victim-impact statements would actually have on him, I'd like to quote Tony Soprano:

Davey: You told me not to get in the game. Why'd you let me do it?

Tony: Well, I knew you had this business here, Davey. It's my nature. The frog and the scorpion, you know? Besides, if you would've won I'd be the one crying the blues, right? What's the end? The end... It's planned bankruptcy. Hey, you're not the first guy to get busted out. This is how a guy like me makes his living. This is my bread and butter. When this is over you're free to go. You can go anywhere you want.
posted by KokuRyu at 9:33 PM on June 15, 2009

Many investors report being Korean war vets.
posted by telstar at 11:06 PM on June 15, 2009

He's more than an asshole, he's a sociopath.

I wouldn't necessarily think those are mutually exclusive. As a matter of fact there's a long list of names that I'm sure people wouldn't mind calling that guy.
posted by P.o.B. at 11:26 PM on June 15, 2009

I have a hard time feeling sympathetic for these people - they took a risk and lost. Tell the "my life is ruined drama" to the hole in my life where my child would be, but for cancer.
posted by bunnycup at 11:38 PM on June 15, 2009

PS, shame the email addresses were not redacted for privacy.
posted by bunnycup at 11:39 PM on June 15, 2009

"robbed of their faith in humanity" because the 16 y/olds college funds are gone...yes its HORRIBLE...but all i can think is that these people need perspective
posted by bunnycup at 11:41 PM on June 15, 2009

With all due respect to your tragic loss Bunnycup, I'd say it is you who may need a little perspective.
posted by nudar at 12:45 AM on June 16, 2009 [4 favorites]

As I read those I imagine if they were my parents or grandparents. And I empathize even more for these people now that I've read their own words. Many are not at an age where starting over again in the workforce is going to be easy on them. If they have extended family I hope they can help out.

And actually a lost college education is a horrible thing. The price of an education is getting higher and higher - many grads have to pay so much with loans that by the time they graduate they'll be spending a good chunk of their lives repaying that money, not to mention maxing out credit cards, possible credit rating problems, etc. etc. Suddenly losing your college fund? Changes that 16 year old's future. Oh she's probably still going to go to college. And it's not like she's been dismembered. But it will be a lot rougher on her. And those of us who care for education can feel sorrow for that. Not to mention those of us who've known what it is to carry around credit card debt.

The older I get the more I look upon my college education as one of the most valuable things I've been given. (Yes, my parents paid for mine, and seeing so many other people struggle to afford their own has made me value the gift all the more.)
posted by batgrlHG at 1:06 AM on June 16, 2009

from wikipedia: The SEC came under fire for not investigating Madoff sooner, despite complaints from Markopolos and others. In testimony before Congress after the scandal broke, Markopolos claimed it was very easy to prove mathematically that Madoff was running a scam. He said it took him five minutes to make an initial assessment of the fraudulent nature of Madoff's purported high investment returns, and about four hours to work the detailed math calculations.
posted by telstar at 1:33 AM on June 16, 2009

Banker by profession, here in the UK I helped some folks prepare these depositions, primarily to insure proper language was used, appropriate issues focused on and emotion minimised, but also because this particular group was submitting to a Solicitor - who charges by the hour, most types of contingent fee arrangements being illegal here - and these of folks just didn't have any money for protracted consultations with a Solicitor.

I don't have a large sample but from what little I've heard, and I can read people pretty quickly, Mr Madoff was an excessively adept social engineer who could literally, squeeze blood from a stone.

Those stories about folks mortgaging their homes to realise capital to be invested with Bernie? Yeh, very, very common, and most of the people that I know now admit not only should they have known better, they did know better. And therein lies the emotional abyss for most, if not all, of the victims, but even folks like myself on the periphery.

Most commenters miss the point - its not about the money. Its about the fact they were conned.

Before moving to London I lived in New York for thirteen years. I moved there in the early 80's, and back then most nights after midnight the West Side of Second Ave between seventh and St. Marks was an open aired bazaar, where you could buy almost anything dirt cheap, sometimes for pence on the pound. Why? Almost all of this merchandise had "fallen off the back of the truck".

I used to carouse a few nights a week (booze, bands and boogie) and no evening was complete without a trip down St. Marks and a visit to see what was on sale. I knew it was wrong so almost never bought anything, maybe a few VHS tapes, etc, but one night saw a guy selling an object I'd long lusted after - hand held camcorders.

So I take a look at what he's got, his demo unit. Sure enough, beautiful Samsung hand held, worked fine and, he assured me, "right out of the box". Out of a sealed box just like the one he showed me.

A right proper display box, colour pix of the unit, all the appropriate text, etc, etc. Shrink wrapped "for security" he assured me. It surely felt like a camcorder was in there, hefty. And the wrapping helped me feel confident nobody had done anything untoward with the unit inside.

I asked how much, he wanted $500, this for a unit that retailed for far more than $1,000. But after maybe ten minutes, including a couple of shows of me walking away ('cause I was so so in control of this deal, don't you know?) we consummated the deal at $100. He handed me the box.

But then someone rushes over to the seller with alarming news - my god - THE POLICE WERE COMING!! "You have to get out of here or you'll be arrested" both of them loudly warned me, pushing me in the direction of Houston Street.

I ran off into the night with my camcorder.

I guess you know what comes next. Got home and in the bright light I'll be damned if that box didn't look so good. A few imperfections, it almost looked as though someone had cut images and text from catalogues and ads.

I was still optimistic. After all, the box was heavy. I'd seen the unit. Things would be fine.

I opened the box. And.

Inside found a very, very large rock.

Well, I've taken this on as a very important lesson. I got greedy. I was rushed. I knew it was too good to be true. And that guy knew precisely what buttons to push. But most importantly, he and his confederates worked together as a team, each pushing a different button at the appropriate time to achieve their shared goal.

Now I'm better educated; a couple of Masters in Finance, have spent decades working on both Wall Street and in The City but this anecdote from my personal life scares the shit out of me from time to time.

You see I'm much better off these days than I was back then. I don't have to work any longer. I'm clearly a much more attractive target and, what I find most scariest about this episode is it happened.

Yes, I've still got the rock. From time to time I bring it out and tell my wife or friends the story. Inevitably we all laugh about my greed and the lesson I got.

But I don't laugh quite as hard as they do. Because this could happen to me again.

Nobody reading this should have any illusions. We're all human. We've all got weaknesses. Folks like my camcorder salesman or Mr Madoff, decades apart have one thing in common: they can instinctively identify and seize upon those weaknesses. And use them against you.

Anyone can get conned.
posted by Mutant at 1:37 AM on June 16, 2009 [51 favorites]

I'm conflicted on the Madoff victims. Sure, I feel sorry for the old widows whose dying husbands told them to invest the whole estate with Madoff. Sure, I feel sorry for the old Jewish couples who made their fortunes in tangible, useful goods and used the proceeds of their investments to open hospital wings and performing arts centers. But then on the other hand, many of the victims were only victims of their own greed. Many of them were part of the same bullshit system as Madoff, the same system that caused this whole economic mess. Many of them made their fortunes through no useful endeavor, landing their positions of power and influence by toadying and sucking up to a succession of people of power and influence who came before them, who got there by doing the same. Many of them are just crushed that they have to part with their $10 million house in Aspen, their collection of Manolo Blahnik shoes, and live-in hired help, and have to live like -gasp- regular people ("regular people" defined as "still better than 90% of humanity").
posted by DecemberBoy at 2:47 AM on June 16, 2009 [3 favorites]

I have to agree with DecemberBoy.

First, this people were stupid. Never put all you eggs in one basket, this is the first rule of all investments. Then the average people hardly could invest with Madoff at all (maybe through feeder funds without them knowing). The ones that invested with him felt proud to invest with this "highly selective" fund. At least 10% returns more or less guaranteed? Wake up! Many investors even knew that he did something wrong but they expected insider trading or other things. As long as it is good for your money criminal acts are good but if they blow your money they are bad? Last but not least: As far as I know individual investors get their money back up to 500.000 US$. This may not be much if you invested 1 Million, 10 Million or 100 Million with him. But you still end up richer than 99% of the world population. Stop whining!

Some victims are not only asking their money back but also the "virtual profits":

Looks like greed knows no limits.
posted by yoyo_nyc at 5:51 AM on June 16, 2009

many of the victims were only victims of their own greed

Re-read Mutant's comment. Then go and watch all of the original Dragnet episodes where they're working on the Bunko squad. This is the modus operandi of the con-man - short for "confidence man." This type of criminal uses many refined psychological techniques to steal your money. One of the most common is to prey on human greed - to convince someone who's normally honest and intelligent to do something shady and stupid. This is to escape retribution - the swindler escapes, because the swindled feels foolish and guilty.

This does not make them any less of a victim, and the swindler any less of a criminal. It is because of the sophisticated psychological attacks, and the devastation they cause in everyday people's lives, that the police and law-enforcement go after con-men so aggressively. Most police departments have specialists in this field (that's what "Bunko" is, and why the plain spoken, matter of fact Joe Friday was such a great fit for it.)

Whenever you say, "Well, the victim had it coming," you're letting the con-man get away with messing with your head.
posted by Slap*Happy at 6:23 AM on June 16, 2009 [2 favorites]

Quite a lot of the victim impact statements, starting around page 80, are from people who had never heard of Madoff, and who certainly didn't have millions of dollars to invest. They invested with Agile Funds, based in Colorado. For example, on p. 105:
My name is Barry Kellogg, age 66. Upon retirement after 30 plus years of employment with Occidental Petroleum Corporation I converted my 401K to a Traditional IRA and placed it with the Agile Group, LLC for investment in several "funds of funds". This IRA represented substantially all of my life savings. After review of several brokerage companies for placement of my savings, I selected Agile Group, LLC because of their conservative approach that was to the best of my knowledge based on wealth preservation rather than promising outrageous returns.
On p. 104, Richard Johnson, another Agile Funds investor:
I am a recently retired blue collar utility plant worker. I am 69 years old. ALL of my 401k funds and over 80% of my life savings have, for all I know, evaporated due to two white collar crooks. Mr. Madoff and a Mr. Petters.

My savings and 401k amounted to nearly $600,000.00. I have not only lost nearly all my savings but now I can't account for my losses when I file my yearly Income Taxes. ...

I worked all my life and served in the U.S. Army. I think I have been a very good and productive citizen. And now ... well I don't feel so proud of being a good and loyal citizen. I feel cheated and abandoned.
Several statements mention the ironically-named "Agile Safety Fund."
posted by russilwvong at 6:37 AM on June 16, 2009 [1 favorite]

Well, again, I don't feel much pity. But why does the FED not bailout the Victim and Madoffs wife? Let a thousand bailouts bloom...
posted by yoyo_nyc at 6:48 AM on June 16, 2009

DecemberBoy: Many of them are just crushed that they have to part with their $10 million house in Aspen, their collection of Manolo Blahnik shoes, and live-in hired help, and have to live like -gasp- regular people ("regular people" defined as "still better than 90% of humanity").

To counterbalance this, here's more stories from the victim impact statements.

Jack Cutter, p. 87:
Our loss has deeply affected our lives. I am 80 years old and my wife of 54 years is 79. We have cut our expenditures to those absolutely necessary and I have found employment as a grocery store meat clerk, which pays $8.39 per hour. It is difficult work and the pay is small, but it is something.
Natalie Erger, p. 19:
My husband is 78 years old. His father died when he was 16. He served his country in the Korean War. He retired from his own business. His entire IRA was invested with Bernard Madoff. [After the fraud was discovered:] He didn't waste any time. He went to work doing telephone customer sales for commission only. He worked from 7:30 am until 8:30 pm six days a week. He was terminated after three months because he did not make the quota of sales they projected. He is now trying to do hosting at a local bagel store.
Donald Collins, page 86:
My wife and I are investors in Agile. All of our funds have been put on hold since the end of September 2008. They have control of all of our life savings accumulated over my 40-year career as a petroleum geologist and production manager. We lived very frugally and saved approximately $950,000. I do not have a pension. All of it was in 401-k's and rolled over to IRA's with Agile. We have no income other than our Social Security. We are just barely making it. I have cashed in a life insurance policy and I am trying to sell a car. I will be 78 April first and no one will hire me to do anything. My wife is 71.
Virginia Buczek, p. 82:
My husband Charles is 51 years old and I am 57. Chuck has been an automotive mechanic for the past 32 years and I was a stay at home mom. Chuck's income in 1983 was $24,000. We saved our money, never owned a new car, and bought some rental houses over a number of years by saving our tax returns and living very frugally. We did all of the work from cleaning bathtubs to putting on new roofs ourselves. We knew that Chuck would only be able to work as a mechanic for a limited amount of time. It is very physically demanding is not a job for an old man. He always said, "There is a reason you don't see any old mechanics."

He had always planned on being in a position of retiring by the time our children had finished college or to have enough savings to pay the bills and live if he had to quit earlier. As he foresaw, he had to have back surgery in 2001. He was 30% disabled after the surgery, but returned to work as soon as possible still as a mechanic. We worked even harder to save and plan for his retirement. He had a torn ligament in each knee and another ruptured disk in his back when he quit working, February 8, 2008. We thought we had saved enough money to pay for the rest of the college tuition and live comfortably. I cannot express the disappointment we have experienced over the last six months. Thirty years of back breaking labor, twelve hour work days (mechanics are paid on the number of billable hours, not by the time spend at the shop), weekends and late evenings cleaning and repairing the damage caused by our renters, living within our means (we still have never had a new car, cable TV, or paid anyone to do anything for us, we have done everything ourselves). We believed that if we were prudent and saved as much as possible we would not have to worry when the time came that Chuck could no longer work.

To know that this good, caring, hardworking man has had his retirement stolen by people who lived a lifestyle of such utter luxury, with such absolute indifference to the lifetime of hard work they were stealing from honest people is appalling. He cannot go back to work as a mechanic; it would take the rest of our lives to save the money that was stolen from us. The work we (our three children, Chuck and I) put into our rentals over the years has been wasted and squandered by those unwilling to do manual labor or honestly earn a dollar but used their positions to steal from hard working, honest, responsible citizens.
posted by russilwvong at 7:30 AM on June 16, 2009 [3 favorites]

Anyone can get conned.

No. It is impossible to con an honest man. An honest man can overcharged a little. Oversold a bit. Slightly taken advantage of. Strike a bad bargain.

You can only take somebody for a con by appealing to the larceny in their heart. And I am not cynical as those who say everybody has larceny in their heart. Everybody does not.
posted by bukvich at 8:49 AM on June 16, 2009

You can only take somebody for a con by appealing to the larceny in their heart.

Please square this idea with the comment just before yours.
posted by dirigibleman at 10:23 AM on June 16, 2009 [1 favorite]

bukvich: "No. It is impossible to con an honest man."

Respectfully, I disagree. Someone can be conned every time there is a transaction. It's not even difficult to imagine. What if the cans of food you bought at the grocery store were filled with mud? What if the RAM chips you bought for your computer were actually painted slabs of empty plastic? What if that used car had 200k miles on it, but the odometer had been rolled back?

In each of these cases, the purchaser trusts, in good faith, in the responsibility of an Edifice. In each case, if this had happened, the buyer would have legal recourse to recoup the losses. That's why our economic systems continue to work. Otherwise we could buy nothing at all.

Before this all went down Bernie Madoff was also an Edifice. What recourse do the victims have?
posted by JHarris at 10:24 AM on June 16, 2009 [1 favorite]

JHarris, I think the difference between a con and a fraud (at least in lay-speak) is that a con specifically involves the psychological manipulation of the mark, which almost invariably consists of convincing him he's getting away with doing something wrong, or benefiting from someone else having done wrong.

What you're describing is ordinary fraud or misrepresentation. A con doesn't necessarily require the mark to be dishonest but it does require them to believe they're getting an unreasonably good deal, which nearly always carries the implication that they're colluding on some sort of crime, or at best, taking advantage of someone's serious error or misfortune.
posted by George_Spiggott at 10:33 AM on June 16, 2009

(That said, I disagree with bukvich's implication, that these people were conned in that sense. They were taken in by a fraud, just as you say.)
posted by George_Spiggott at 10:44 AM on June 16, 2009

I have a hard time feeling sympathetic for these people - they took a risk and lost. Tell the "my life is ruined drama" to the hole in my life where my child would be, but for cancer.

You know, that may be legit when you're talking about individuals. But what about all the people effected by, for example, the closing of foundations and charities? The people in charge of making those decision might be complicit, but the thousands of individuals and smaller organizations that relied on money from those philanthropic organizations were hard hit, and cannot be blamed. These individuals include some of the poorest and most disadvantaged in the country.
posted by lunit at 11:05 AM on June 16, 2009

lunit, don't get me wrong - when I in my later post said "it's HORRIBLE" I was indicating that yes, truly, I agree that the effects that this has on many individuals rich or poor (or as you point out, foundations and charities) are truly terrible. I was QUITE drunk, so might not have been clear...

When I read some of the victim impact statements, what struck out at me was people treating the loss of some money as the VERY WORST THING that could ever happen - it crumbled their faith in humanity, for example. Jerky admonishments that I need to get "perspective" about my child's death aside, I still can't manage to fill my care cup for many (but of course not all) of the statements.
posted by bunnycup at 12:01 PM on June 16, 2009

I really get the feeling that Mr. Madoff knows about an impending attack on the United States. I wonder what we can do to get the information out of him? Lives may be at stake, after all.
posted by mullingitover at 1:05 PM on June 16, 2009 [1 favorite]

bunnycup: I am quite certain the loss of one's child is one of worst things a person can ever experience (if not the worst thing. I'm a parent.). I am truly sorry for your loss. I don't think it's necessary to trump the pain of these people with yours. For some of these people -- retirees with limited potential for recouping income -- this quite possibly could be the worst thing to happen to them. Their pain is different from yours, but I don't think it's necessary to diminish or dismiss their experience.
posted by mazola at 1:18 PM on June 16, 2009 [2 favorites]

Oh, and I'll concede I wasn't mustering much sympathy to the person who wrote (paraphrasing) "How do you tell an 8 year old their horse will be going away?"
posted by mazola at 1:25 PM on June 16, 2009 [1 favorite]

Mazola - let me reiterate for the third time that I truly did find heartache and sympathy for some of them.
posted by bunnycup at 1:34 PM on June 16, 2009

After reading the secretary's story linked above, I'm reminded of a job I used to have. No where near the scale of Madoff, and not involving the investments of individuals, but definitely a boss who scammed other companies regularly. The funny thing was that when I attempted to tell people about it, no one would believe me. I talked to an attorney at an industry function once, and he laughed me off, saying "X must be yanking your chain. He wouldn't do this or that." And the one time I did get the attention of a few (on an online "whistleblower" site about shady practices in our particular industry), three days later the entire site was gone, never to return. I did see that the site admin posted a response to my original and completely truthful message about my former boss's business practices stating that "I've received a message from X, stating that the post in question was from a disgruntled former employee." That was his only so-called defense, and then the site disappeared. I have a feeling that my boss (who has several accountants and attorneys in his family) somehow pressured the person who owned the message board to disappear. (Interestingly enough, my former boss exhibited several similar traits to Madoff, including placing personal ads and frequenting massage parlors and "gentlemen's clubs.") So it doesn't surprise me that this type of deceipt could perpetuate on such a grand scale for such a long time.
posted by Oriole Adams at 5:04 PM on June 16, 2009

I didn't mean to sound snippy in my response to bunnycup, and I'm sorry for her loss - even though I don't have children I can agree that the death of a child is the worst thing that can happen to a parent, ever. This doesn't mean that we can't be empathetic for other kinds of tragedies as well, and this loss of money was a life changing event for people. I don't think we need to weigh which is worse, the death of a child or an event that causes a 70 year old to try to find a job to support their aging parents. Those sorts of judgment calls - who has suffered more - don't ever make anyone feel any better. I personally wish no one would have to suffer either of these.

I'm looking at the fate of the children who no longer have college money from the perspective of a teacher who has seen many young adults struggle to put themselves through school, some while working more than one job and raising a family. (I had it much easier in comparison.) I'm also wondering if current generations set aside money for college in the same way as the older people writing those letters did - maybe it's something many people would consider odd, setting that money aside. When I was born it was a common thing for grandparents and older relatives to put money into accounts for college - sometime this was done for couples just married and not even ready to have children. I can remember hearing other kids grumbling about not getting Christmas or birthday gifts because Aunt Soandso was putting money into the college account rather than give them toys. I know plenty of my friends with kids would love to set aside more money for college - but they're having enough trouble affording necessities.
posted by batgrlHG at 5:37 PM on June 16, 2009 [1 favorite]

I want to add that batgrlHG's compassionate (to all involved) response inspired me. Kudos.
posted by bunnycup at 7:36 PM on June 17, 2009

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