'All Just One Big Lie'
Saturday, December 13, 2008
Deborah Coltin learned yesterday morning that the $8 million foundation she has led for a decade, which supported a wide range of Jewish programs on the north shore of Massachusetts, did not actually exist.
The foundation had invested its endowment with Bernard L. Madoff, a storied name on Wall Street. Every year, Madoff paid out several hundred thousand dollars to the foundation. But on Thursday, Madoff was charged with securities fraud after confessing to his sons that his business was a Ponzi scheme, according to a complaint filed by the Securities and Exchange Commission. The returns paid to investors came from money invested by other people. And there was almost nothing left.
It may be the largest fraud in the history of Wall Street, authorities said. Madoff is charged with stealing as much as $50 billion, in part to cover a pattern of massive losses, even as he cultivated a reputation as a financial mastermind and prominent philanthropist.
Coltin, executive director of the Robert I. Lappin Charitable Foundation, said she spent the day at her office as a woman in mourning, taking condolence calls and trying to understand what happened.
"I laid off five people today," she said.
"Our foundation was the lifeblood of this community," she said.
"It's just very, very sad."
Madoff's investors included a number of prominent hedge funds and the firm of Fred Wilpon, the owner of the New York Mets. Several may have sustained billions of dollars in losses.
But the damage appears to be deepest in the small world of Jewish philanthropy, where Madoff was a leading figure. The North Shore-Long Island Jewish Health System said it lost $5 million. The Julian J. Levitt Foundation, based in Texas and focused on Jewish causes, lost about $6 million. Yeshiva University, a New York institution where Madoff served on the board, said it was examining how much money it invested with his firm.
Madoff's own $19 million foundation, which gave to a range of New York and Jewish causes, also was wiped out.
Ira Lee Sorkin, an attorney for Madoff, said Madoff's firm "is cooperating fully with the government."
"We're disturbed about these unfortunate events that have led to this," Sorkin said. He declined to say whether Madoff, who has been released on bail, will fight the charges.