..As reported in The Miami Herald
By Michael Sallah, Patrick Danner, John Dorschner And Ina Paiva Cordle
The list of customers of swindling suspect Bernard Madoff includes prominent car dealer Norman Braman, Pasadena Homes builder Leonard Miller and hotelier Stephen Muss. Then there’s Adele Fox. The widow from Tamarac stopped buying clothes. She can’t go to Bonefish Grill anymore. She can’t even afford to help her grandson pay for college. Everything, including a settlement from her dead husband’s asbestos case, is wiped out. ”It’s just awful,” said Fox, 85. “All my savings are just gone.”
Peppered among the names of celebrities and industrialists from around the world are hundreds of South Florida residents who invested their money — in some cases their savings — with the brokerage firm that exploded in the nation’s largest Ponzi scheme. The list, revealed for the first time on Wednesday in bankruptcy court in New York, includes 562 clients from Broward and Miami-Dade counties. The impact on this area ”has been tremendous,” said Broward securities lawyer Mark Tepper. “To a lot of the people here, it’s been life changing.”
Madoff, 70, the once-prominent Nasdaq chairman who recruited clients from his home and private club in Palm Beach, is charged with securities fraud and remains under house arrest in his Manhattan apartment. Of the 11,374 customers, nearly one in five — or 2,070 — are from Florida, the hardest hit state outside New York, according to a Miami Herald analysis of the list. For many in South Florida, the disclosure of the names brings more embarrassment and anger in a widening case estimated to reach $50 billion in investment losses.
The list also shows for the first time the breadth and scope of a case that spans generations. “When you’re taken the way we were taken, you think to yourself, ‘How can you be so stupid?’ Because everybody knows there’s no free lunch,” said Gerald William, 91, of Tamarac. “All of a sudden someone pulls the rug out from under you, and you didn’t do anything. To have somebody take it like that — that I’ll probably never get over.” The retired electrical contractor said he had been planning to leave the money to his children.
Since the scandal unfolded with Madoff’s arrest on Dec. 11, dozens of South Florida victims have been seeking help from lawyers. Some have flooded the bankruptcy court with letters and complained to federal regulators. ”They’re scared,” said Coral Springs lawyer Scott Silver. “It’s been devastating to them on so many levels because it went on for so long. “What separates this from so many other cases is that it’s generational. I have sat and talked to grandfathers, fathers and children — who all invested money with Madoff over the years.”
Investing in Madoff was a family affair for Steven Sondov, 65, of Pompano Beach. Sondov, whose father invested with Madoff, used to think of the disgraced financier as “Uncle Bernie.” He invested about $936,000; his sister and niece kept $864,000 in an account. A computer software developer, Sondov said he has given up the idea of retiring and doesn’t expect to travel much this year. “I’ll have to work until I die.” One possible safety net for victims is the Securities Investor Protection Corp., or SIPC, which pays up to $500,000 to people who invested with Madoff.
But questions abound on whether SIPC is adequately funded to meet all the accounts wiped out, say experts. Some investors may not qualify because they are not invested in funds covered by government guarantees. The list doesn’t include the amount of money invested by each client, but estimates are in the tens of billions.
The repercussions from the brokerage demise has already been felt among charities in South Florida — many depending on donors who lost money. During an awards ceremony of the Miami American Civil Liberities Union last week, a top officer told members the organization was losing hundreds of thousands in donations.
The Miles & Shirley Fiterman Charitable Foundation in Palm Beach — which pays for healthcare research and religious organizations — had entrusted $60 million to Madoff, tax records state. Norman Braman, 76, a longtime Miami car dealer, oversees at least two foundations in Madoff’s care. For now, Braman said he is personally writing checks to fund the organizations: ”All obligations that we have made by our foundations have been honored and paid,” said Braman, who also had personal accounts with Madoff. Also on the list: Norman’s daughter Debi Wechsler and her husband.
Experts offer several reasons South Florida was staggered by the demise of Madoff Securities: Madoff’s winter home in Palm Beach — including a Palm Beach Country Club membership — allowed him to network among wealthy and powerful members of the Jewish community. And strong ties exist between New York and South Florida, especially among retirees. When developer Leonard Miller wound down his homebuilding business, Pasadena Homes, after more than 40 years, he invested with Madoff. ”Pretty much all my retirement savings were with him,” said Miller, 79, from his Sunny Isles Beach condo. “Right now it is very, very tight. I hope I get something back, but I don’t know.” Miller, who constructed homes mostly in Broward County, would not say how much he invested. Like dozens of people interviewed by The Miami Herald, Aaron Handel says he was shaken — and his life irrevocably changed by Madoff’s scheme. ”It’s been pretty devastating,” said Handel, 74, of Tamarac, who did not have other investments. He and his wife Sheila are considering a host of options, including selling their home. Irwin Salbe of Pompano Beach says he lost 75 percent of his investment portfolio. He has already been forced to give up his Lexus and has trimmed back on every facet of his spending. Salbe said his parents started investing with Madoff in the 1960s, when the financier started his firm. Salbe’s parents’ account was turned over to him in 1983. He continued to invest, even getting other family members to turn over their money to Madoff. Salbe said he met with Madoff in 1991. ”He assured me everything was fine,” he said. June Boynor’s trust also invested with Madoff. ”I don’t want to talk about it. I want to forget about it,” said the Aventura woman. She won’t say how much she lost, but she had invested in the fund for “skinteen years. You heard me. Skinteen . . . I feel really terrible. I gave to people who needed help.” Others on the list read like a Who’s Who of the South Florida business establishment, including Gary Gerson, a prominent Miami Beach accountant who sits on the Mount Sinai Medical Center Foundation board of trustees, and the Potamkin car dealership family. And Fort Lauderdale philanthropist Michael Bienes. Bienes ran an investment firm with Palm Beach resident Frank J. Avellino which placed clients’ money with Madoff for three decades. In 1992, the SEC charged the Fort Lauderdale firm Avellino & Bienes with selling unregistered securities and ordered the two men to refund more than $441 million to 3,200 investors. The firm paid a $250,000 fine and closed, while the men each paid a $50,000 fine. Bienes’ Bay Colony estate in Fort Lauderdale has been listed for sale. The five-bedroom, six-bathroom home on the Intracoastal Waterway has an asking price of $5.9 million. Silver said people are forced to give up lifestyles they thought would last the rest of their lives. ”You’re talking about people who lost millions,” said the attorney, who represents a dozen burned investors. “It’s been devastating.” Though St. Thomas Aquinas High School in Fort Lauderdale was on the list of clients, the school never actually invested with Madoff, said Monsignor Vincent Kelly, the school’s supervising principal. ”Somewhere we must have opened an account. I honestly do not recall investing any money. There have been no statements. There has been nothing,” he said. Kelly was not so fortunate. ”I personally and my family opened an account there in the mid-90s,” Kelly said. Funds from his Kelco Foundation were also invested with Madoff. They learned of the Palm Beach broker through word of mouth, he said. ”Those accounts were active up to the end,” he said, declining to say how much was invested or what he lost. ”My family wouldn’t want me discussing those issues,” he said. Adele Fox of Tamarac, who lost $2 million, said she tries to remain calm over the ordeal. ”It’s been difficult,” said the widow, who has joined a Madoff survivors group. “I would love to see [Madoff] in jail. I’d like to see him dead. But then we may never know what happened to the money.”