Lots of people, it seems, entrusted their money to Bernie Madoff without ever knowing his name. Time Magazine is now running the first person account of Robert Chew, a Colorado investor who found out on Thursday that not only had he and his wife been wiped out to the tune of $1.5 million, his wife’s family had lost $30 million.
The call came at 6 p.m. on Thursday, December 11th. I had been waiting for it for five years. When it finally arrived it was my wife, Sarah, who answered. What the person said on the other end of the phone was both simple and devastating: we were financially wiped out.
Of course, I knew this instantly from the look on my wife’s face. Her words to the caller, the person handling our financial matters, grew insistent. “You’re joking? This is a joke, right?”
Of course, it wasn’t a joke. He was just another victim of Bernie Madoff.
Chew’s story brings to light some key features of the Madoff scam.
Affinity organisers. Madoff remained unfamiliar to many people whose money he controlled because he had so many others out there recruiting investors . Chew, for instance, was recruited into the scheme by “Stanley Chais, the Los Angeles network organiser for, as it turned out, a man named Bernard Madoff.” His wife’s family had money with Madoff for decades.
The suspicion that something was wrong. Lots of people, it seemed, believed Madoff was running some scam. Insider trading, front-running, something the “New York people” knew how to do that let them earn consistent returns for decades. They just never thought he was scamming them.
Resignation that life as they knew it is over. “At a minimum it’s life-changing news — the kind of thing that’s been known to cause shortness of breath, sudden cardiac arrest, revolvers pulled from bedside drawers. It harkens back to December of 1929 and the image of bodies falling from buildings,” Chew writes.