Madoff: The Pain Runs Deep

"This is a major disaster for a lot of people," says one of the many victims of the alleged fraud by investment manager Bernard Madoff

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We've all seen the victims of natural disasters, ordinary people standing in the rubble of their homes, their lives changed forever in mere minutes by a hurricane, tornado, or earthquake. For victims of the Bernard Madoff financial disaster, the shock is much the same—only they still have their homes, for the moment at least, as they try to figure out what has happened to their lives in the wake of Madoff's alleged $50 billion Ponzi scheme.

There are plenty of corporate victims in the alleged fraud, including HSBC Holdings (HBC), Banco Santander (STD), BNP Paribas (BNPP.PA), Royal Bank of Scotland Group (RBS), and the Dutch pension fund of Royal Dutch Shell (RDSA). But the full roster of personal victims—from the man repeatedly muttering "Oh my God," into a cell phone on a commuter train, a copy of The New York Post in his hand, to the more than 100 people who have contacted a Long Island (N.Y.) law firm that has filed a class-action suit against Madoff's investment company—isn't yet known.

So far, the list includes Carl Shapiro, a 95-year-old former garment industry executive who reportedly had $400 million of his personal wealth invested with Madoff, as well as $145 million from his family foundation; Irwin Kellner, chief economist for MarketWatch and the lead plaintiff in the class action, who invested more than $2 million; and Lawrence Velvel, 69, dean of the Massachusetts School of Law, who told the Associated Press he and a friend may have lost millions of dollars between them in bad Madoff investments.

Ripple Effects

"This is a major disaster for a lot of people," Velvel said. "You work all your life, you finally manage to save up something, and somebody who's entrusted with it, it turns out suddenly he's a crook. Lots of people are getting fully or partially wiped out."

Madoff—who has been lying low since the scandal broke—made a brief appearance at a federal courthouse in Manhattan on Wednesday, Dec. 17, completing paperwork for his $10 million bond after a judge set new conditions for release, including a curfew and monitoring bracelet. Madoff did not respond to questions from reporters as he left the courthouse.