FEB 9 – It’s increasingly apparent that Bernard Madoff’s investment services weren’t as exclusive as once thought.
An eclectic list purporting to name thousands of people who lost money in Madoff’s alleged $50 billion Ponzi scheme – complete with their street addresses – includes housewives and retirees, a plumbers union and a high school.
The list, released as part of his firm’s bankruptcy-court proceedings, is providing fodder for gawkers who are already poring through it to look for friends, business associates and prominent people who had so far avoided the spotlight, but who now have been outed.
The list includes baseball legend Sandy Koufax. In addition it lists some other famous-sounding names: John Malkovich (the actor’s agent declined to comment); the late musical philanthropist Avery Fisher (a family member declined to comment); Steven Spielberg, director; and Jeffrey Katzenberg, producer.
Also on it is the family trust of Susan Leavitt, a stay-at-home mother of two in Tampa, Fla. She was dropping off her son at grade school Thursday morning when another parent mentioned that a list naming Madoff’s investors was circulating. She was horrified: Her family’s name is on it.
It felt like she’d been “socked in the stomach,” she says, having lost what she described as her children’s nest egg in the alleged fraud. “I felt sad for everyone who has been anonymous up to this point and now has to deal with the outright humiliation of yet another betrayal.”
The document, released late Wednesday, consists of people who either were identified as customers in Madoff’s records or who identified themselves as customers by contacting Irving Picard, the court-appointed trustee in charge of liquidating Madoff’s assets, or the Securities Investor Protection Corp.
“It’s as public as Paris Hilton porn movies,” says Steven Salbe, a 42-year-old consultant who sets up corporate computer systems in Boca Raton, Fla., whose family lost much of its savings in the scandal. “It’s the one list I prefer not to be on, but I’m on it.”
The fact that it includes so much personal information, including home addresses, is sparking interest from the capitalist-minded. “This is the best prospecting list ever,” says Ken Phillips, who runs RCG Capital Advisors, a Boulder, Colo., fund that invests in hedge funds. “You’ve got the names and addresses of a whole bunch of rich people who don’t demand much accountability.”
New York trial lawyer Gary Pillersdorf adds that some lawyers (not including him) inevitably will use it to troll for clients. “Lawyers all went to law school; they’re not dumb,” he says. “That list connotes people who have a lot of money.”
The list also includes the incarcerated. Melvyn Weiss and David Bershad – two high-profile one-time plaintiffs’ lawyers now serving time in federal prison for illegally paying kickbacks to clients – appear to be victims of the fraud.
This type of information is routinely released during bankruptcy proceedings. But the massive size of the alleged fraud, the tremendous interest it has spawned, and the technology available to post it digitally has fueled an online frenzy.
The document itself is a simple alphabetical list, originally posted on the US federal court electronic records Web site. It’s not very easy to use in that format: Oddly, it’s alphabetised by people’s first names.
But within hours, Josh Linsk, a 26-year-old who runs a publishing company based in Las Vegas, transformed it into a searchable database, www.madoffsearch.com, which he dubbed “The first and only Bernard Madoff Search Engine.”
“Access to this type of information is important,” said Linsk, who isn’t a Madoff investor himself. He said that if any individuals wished to be removed from his version of the database, “we would honour that.”
The list isn’t entirely accurate. New York law firm Wolf Popper LLP was included. But Wolf Popper partner Jim Harrod said he had no idea why. “I have to assume that that’s a mistake,” said Harrod.
One possible explanation is that it was inadvertently included because the law firm, on behalf of some clients, has sued Fairfield Greenwich Group, a firm that invested client funds with Madoff.
Particularly surprising was the appearance of Ira Lee Sorkin – Madoff’s lawyer – on the customer list. Whether Sorkin or his family members lost money through Madoff is unclear. A person familiar with the matter says Sorkin’s father, Nathan, opened an IRA account with Madoff at some point in the 1990s.
“I have never been an investor or customer of Bernard L. Madoff Investment Securities,” said Sorkin, adding: “I’m not going to talk about my family members.”
Sherry Morse, an interior designer in San Francisco who lost much of her retirement money, says she was shocked to receive an email Wednesday afternoon from an online group of Madoff investors, telling her the customer list was making the rounds.
“People might think I’m rich and want to rob my house,” she says. “To have our privacy invaded, it’s disparaging and disgusting.”
Many of Madoff’s investors spent hours poring through the list in hopes they weren’t included. Diane Peskin thought she was off the hook when her name didn’t appear under the P’s. “I thought, ‘Oh, they don’t have everybody’.”
But there it was, right beside a family member’s name, along with her home address in Bethlehem, Pa. She’s spent the day warding off calls from media. “I am completely appalled,” she said.
Some of the victims didn’t mind the attention. The Plumbers & Steamfitters Local 267 in Syracuse, N.Y., lost about $48 million in pension and other funds it had invested with Madoff.
“We don’t have any issues to hide,” said Gregory Lancette, business manager for the union. – The Wall Street Journal Asia
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