Madoff Village

Posted by: Matthew Goldstein on February 05

The List is out. We’re talking about the official list of purported Madoff victims—at least the ones that have come foward so far to cry foul.

And the list of victims of Bernard Madoff’s alleged long-running Ponzi scheme is long. Very long. The 162-page filing, submitted Feb. 4 with the US Bankruptcy Court in Manhattan, contains about 13,000 names and addresses. Printed in agate-size type, the list resembles something of a phone book—even though the telephone numbers of the victims aren’t included.

In time, The List is likely to grow even longer. It doesn’t appear to include the names of investors who got exposure to Madoff through a myriad of subfeeder funds. These tiny hedge funds invested all of their clients’ money with a dozen or so giant feeder funds—like Tremont Group and Fairfield Greenwich Group—which dealt directly with Madoff.

It makes sense to think of The List as a phone directory. In effect, The List contains the name of the residents of what we call Madoff Village—a mythical land where investors could come to count on consistent, double-digit returns. In Madoff Village, the super-rich, as well as more ordinary investors, had all come to believe that someone had found a way to tame the market, defy gravity, and post solid returns year after year.

In Madoff Village, you had doctors, lawyers (even Madoff’s own attorney), accountants and other professionals. There were celebrities, the super-rich, politicians. There also were banks, hedge funds and brokerages. And there were a large number of charitable groups, religious foundations, museums, hospitals and pension plans also buying into the dream.

In Madoff Village, there were people and institutions from all walks of life. That’s one reason this presumed $50 billion scandal has been so far reaching and unnerving to investors—even ones who had no money invested with the 70-year-old disgraced stock trader.

The one enduring lesson of the Madoff affair is that investors—no matter how sophisticated—should never get seduced by the promise of something that seems to good to be true. It’s for this simple reason, that the Securities and Exchange Commission should be faulted for not doing more to uncover the alleged fraud.

Sure, it’s difficult to find fraud. But the SEC, as we now know, had plenty of tips about something amiss at Madoff’s firm. And the commission even performed its own earlier investigations, but found nothing seriously wrong.

Still, the investigators should have been more skeptical and more cynical than the investors, who for a time, were living large in Madoff Village. After all, investigators at the SEC don’t make enough to have gained entrance to Madoff Village.

Reader Comments

BCR

February 5, 2009 01:37 PM

Nothing this guy did should surprise anyone. The scheme he pulled off was no different than the smoke and mirror game pulled by every major financial institution on Wall Street except this was one single guy versus bank presidents, VP's, and board of directors. It's easier to target one person than the multitude that head up all of the banks. I'm not excusing his actions, but let's face it, a lot of people lost everything they had due to what the banks have been doing.

JOY WOODARD

February 5, 2009 01:46 PM

LOOKS LIKE THEY LET THE FOX GUARD THE
CHICKEN HOUSE IN THIS CASE

Howard S

February 5, 2009 01:56 PM

Please, can someone help me? I've been hearing about this list of Madoff investors all day, and so far I've been unable to actually find the list anywhere either in print or online. Its got to be somewhere, its a matter of public record.
You see, I own the toll booths on the New Jersey turnpike, and I'm looking to sell them to raise money for my next business venture, building golf courses on the moon. I think that the list of Madoff's savvy investors would be a good place for me to start prospecting for people who would be interested in buying one or more of my toll booths, or investing in a piece of the lunar golf courses, or maybe even both.
These folks have a real track record, and I'd like to help them recoup their losses.
I'm doing it because I like them, not because of the money.

Skeptic

February 5, 2009 02:00 PM

If it's not FDIC insured, play at your own risk. When you know the CEOs and brokerage firms are taking shareholders and investors to the cleaners, but you still choose to put your money in, you know you are taking the chances. The roulette is rolling, black, red, green. You lose.

pices314

February 5, 2009 02:01 PM

Iam sick of these high up people thinking that they can do anything send him to jail and not some country club.

Bonnie Alexandria

February 5, 2009 02:06 PM

If they were 'purpoted', they were certainly victimized. The word is 'purported'.

sucre B. ramirez

February 5, 2009 02:06 PM

There is nothing new about this article. I know of a bank in South Jersey, which the Chairman leases most of the branches to bank for as much as five time the going rate. The OCC is not doing anything about it.

Concerned Investor

February 5, 2009 02:07 PM

Investigate Madoff yes!

Also Investigate all the Banks,
Hedge Funds and Feeder Funds
who trusted this fraud with
their Clients; money without
adequately checking him out.

They should be personally
financially and criminally
responsible as accomplices
to Madoff's crimes

Victim's Son

February 5, 2009 02:11 PM

BusinessWeek is incorrect in this article. This list is NOT of people whom have made a complaint. This list if from the internal mailing list at Madoff Securities

Dante

February 5, 2009 02:13 PM

These so called "victims" know Maddoff was doing something fishy. But they're ok with it as long as Maddoff sticks it to someone else and give them high returns. Good thing they were the ones who got stuck.

sam

February 5, 2009 02:37 PM

i sold in to Madoff Securities for years..they used to nickel and dime us to death. cheapest account i ever worked with..the guy should die in jail no doubt, also the true insiders that knew what he was doing should be exposed and jailed. he needs to give em up....

Timmy

February 5, 2009 02:47 PM

Howard S. -

Very interested in your business venture with lunar golf courses. I see lots of promise and I'm willing to invest heavily. Do you promise me double digit returns on my investment? Also, being an investor, would I get free membership to the course?

frogandprincess

February 5, 2009 03:04 PM

It's scandalous and I can't believe how we can let a man like this get away. There he is in his filthy rich home, whilst millions have most probably lost their homes thanks to Madoff. He should be made an example of. And how on earth did the SEC miss all this??
Do come and check out my blog that's business and personal : http://frogandprincess.wordpress.com

Leo

February 5, 2009 03:22 PM

The SEC missed this because they, like many other government agencies, rely on the trust of the organization under review to a point. It would be impossible, and require abnormal amounts of money and resources to police every aspect of an organization and how they do business, and market products. Typically if an organization is breaking the law, there is a whistle blower.

Gimme a BREAK

February 5, 2009 03:29 PM

And Madogg is living the Good Life in his penthouse, while his family PROFITED SO RICHLY from their dad's thievery....really sick state of affairs when scum are protected by our Govt leaders....guess it PROVES, snakes don't bite other snakes.

Travis

February 5, 2009 03:48 PM

Howard- the list can be found on wsj.com in a pdf format... have fun and looking forward to playing the championship lunar links course!

matt/bw writer

February 5, 2009 03:55 PM

Hi. I'd just like to point out the list of victims can be found our site, in a separate link

Barbara Holtzman

February 5, 2009 04:17 PM

The link to the list is right under the article box for this story on the businessweek.com front page: http://images.businessweek.com/extras/09/0205_madoff.pdf

You'll need to do a zoom, the print is tiny, and it's 163 pages long, just like the story says, so you have to search for most names - which are alphabetical by company name or first name. That's government for you.

animesh

February 5, 2009 07:48 PM

ha ha
Good going Howard S.
Nothing drives home a point better than sarcasm.
Yeah,I'll buy this list from you if you can get your hands on it. I'd like to pitch them my new options trading robot.

Still, I can't say, i put the swindled in the same blame bracket as the swindlers.

PT Barnum

February 5, 2009 08:27 PM

There's a sucker born every minute. Reference the list.

Rupert

February 5, 2009 09:56 PM

Madoff needs a kick in his Lunar Balls.
(Golf on Mars ! Get it!)

Christopher Holland

February 5, 2009 11:12 PM

The Enron scandal all over again - how fast people forget. The first guy to blow the whistle on Enron reckoned that anybody could have looked at Enron's numbers and worked out pretty quickly that they didn't add up. Nobody bothered, nobody wanted to know that the emperor wasn't wearing clothes. Madoff is the same - nobody wanted to know. You can't pass laws forcing people to be smart.

Bob Snyder

February 6, 2009 12:58 AM

To BCR, what the investment banks were doing and what Madoff was doing are related but only to a point. Neither of them understood how much risk they were exposing themselves to but because hedge funds aren't required to register with the SEC, it would be easier for someone to hide the huge losses that resulted from a poor strategy. What most people don't understand is that they don't really know what happened yet or when he started paying previous investors with new investors money. Basically, it wasn't always a ponzi scheme.

Jason Brown

February 6, 2009 01:44 AM

God Bless America.

Darlene

February 6, 2009 03:48 PM

Howard,

I'm not much of a golfer but the chance to go to the moon sounds interesting! Will you take a check?

Madoff Victim

February 9, 2009 12:35 AM

I am a Madoff Victim. We have joined with others in an effort toward restitution and recovery.
If you are a victim, and want to join our group to share information and support, please email me at
madoffvictim@usa.com.
Together, we will prevail

Jen

February 13, 2009 12:38 PM

Thanks Matt for another great article related to scam artist! Another point is that all the lowlife scam artist like Robert Sucarato, that you wrote about in the spring of 2008, 'Suite Scams' end up being reprioritized with the authorities because guys like Maddoff and the other large banking/investment industries will take priority over him. I understand many like him are coming out of the woodwork! I guess we have to be patient, but anyone who has been scammed by Sucarato should come forward.

Joe

February 19, 2009 03:36 PM

Great article Matt. I agree with Jen's comment with respect to your Suite Scams article a while back. Low life punks like Sucarato who are scamming people for lower sums of money are simply getting away with it in this economy.

CS

March 12, 2009 04:27 PM

It was a good article and Matt made some great points. Addressing the comments made by Jen and Joe, perhaps they should finally realize there were no people scammed by Sucarato. It has been public knowledge for a year and yet no one has come forward to report anything. Perhaps there were other circumstances in that case. It seems to me that if others had any issues with Sucarato they would have come forward by now.

Jean

June 4, 2009 09:56 PM

Just doing a search and came across these comments regarding an individual commenting on Jen and Joes comments re:Robert Sucarato and the article written about 'Suite Scams'. Interesting, stating that it was 'public knowledge for a year' that no one has come forward regarding Robert Sucarato. Let's correct that: Information and people have come forward and unfortunately the point Jen and Joe made is that he is still and will remain a thief yet repriotized in the eyes of the authorities due to other pressing fraud situation like Madoff etc...Good try CS but the guy remains a fraud and criminal.

saavyinvestor

June 5, 2009 10:46 AM

The investors were not just greedy -- looking for riskless, double-digit returns, many were also lame. Didn't they ever hear about diversification? And some now want SIPC to pay them the profits they didn't get from Madoff (by paying the statement balance and not the invested amount) -- IN ADDITION to their principal -- a tasteless display of greed. And now we are hearing allegations from prosecutors that some investors knew or should have known about the fraud.

saavyinvestor

June 5, 2009 10:48 AM

The investors were not just greedy -- looking for riskless, double-digit returns, many were also lame. Didn't they ever hear about diversification? And some now want SIPC to pay them the profits they didn't get from Madoff (by paying the statement balance and not the invested amount) -- IN ADDITION to their principal -- a tasteless display of greed. And now we are hearing allegations from prosecutors that some investors knew or should have known about the fraud.

Jean

June 6, 2009 10:08 AM

If anyone is doing business with NYFC Properties LLC, I would suggest they be very vigilant in checking out the owner Robert J. Sucarato.

Thank you for your interest. This blog is no longer active.

 

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BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.

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