On scam’s anniversary, more on Madoff

On the anniversary of the day that Bernard Madoff made his confession that he had ripped of billions of dollars, the media is filled with retrospection.

Here’s a brief roundup:

The WSJ talks about how several nonprofits – including Brandeis University and Yeshiva University — have changed how they operate:

Brandeis University, which had received $42.5 million for a new science center, admissions center and social-policy forum from Mr. Shapiro’s foundation, switched fund-raising from construction to financial aid. The school solicited donors nine months earlier than in prior years and produced four live lectures online with prominent faculty to remind donors "of the great education they got and the financial needs of current students," says a university spokesman.

Real-estate developer George Krupp, and his wife, Liz, sponsored a $1 million matching grant to spur $3 million for student aid. Fourteen gifts of more than $1 million came in to close the year’s expected funding gap. Other charities are tightening their financial controls and conflict-of-interest policies to ensure they don’t get scammed again.

Yeshiva University of New York hired law firm Sullivan & Cromwell LLP and consulting firm Cambridge Associates LLC to devise new board-governance policies. The university didn’t invest directly with Mr. Madoff, who served as chairman of its business school, but lost millions through a feeder fund run by J. Ezra Merkin, an investment committee member. In August, Yeshiva’s board adopted a policy that bars board members from doing business with the university. The school also hired its first chief investment officer to manage its $1.4 billion endowment. A university spokesman said the loss, not including fictitious gains, came to about $14.5 million.

The Associated Press has a story about how the charities Madoff hit hardest are faring, touching on several Jewish organizations:

The damage caused to charities, especially Jewish nonprofits and those that aided Israel, is still being assessed.

Scores of foundations and charitable trusts appear to have lost enough money because of Madoff, who was active in the Jewish community and knew the heads of many of the organizations that invested with him, to hinder or cripple operations. Others lost nothing but suffered anyway.

Jewish Communities of MetroWest New Jersey, a charity that didn’t have a dime invested with Madoff, still had to slash operations after more than a dozen of its major donors, who had been giving $600,000 a year, were wiped out in the fraud.

Its CEO, Max Kleinman, said it had to lay off 12 people, furlough staff and cut executive salaries.

Still, the work continued.

The Elie Wiesel Foundation for Humanity, founded by the writer and Holocaust survivor, said in a posting on its Web site that it still managed to have "a productive year," despite losing almost all of what it thought was a $15.2 million endowment.

"Thanks to generosity from around the country and world, with donations from $5 and up, we are pleased to let you know that we are able to honor all of our commitments and continue all of our projects," the message said.

American Society for Technion, which raises money for a technological institute in Israel, said that in 2009 it raised $77 million — slightly more than the book value of its vanished Madoff investments.

There were budget cuts and a small reduction in staff, spokesman Kevin Hattori said, but no programs were canceled.

But while several charity directors said they are optimistic about the future, a few are still wondering whether more bad news lies ahead.

The Village Voice is still wondering how Bernie pulled off this scam.

The Miami Herald has a piece about one of the South Florida neighborhoods that Bernie preyed upon:

On the surface, the Woodlands neighborhood of Tamarac looks the same today as it did a year ago.

The yards of the 890 homes in this single square mile of Northwest Broward are neatly tended. At the clubhouse, elderly men in shorts and polo shirts troop through the clubhouse or zip by in golf carts on their way to the two 18-hole courses. The daily bridge games go on.

But under the surface, this Tamarac neighborhood — home to 50 victims of investment advisor Bernard Madoff’s fraudulent investments — has taken a blow.

And some nonprofits are just starting to express their anger – in court – reports the Boston Globe:

In a lawsuit filed last week, Congregation Beth Pinchas in Brookline, best known for its charismatic spiritual leader dubbed the Bostoner Rebbe, said it invested $850,000 over 14 years with New York financier J. Ezra Merkin, a fellow Orthodox Jew who funneled billions of dollars in clients’ money to the convicted swindler.

Beth Pinchas accused Merkin, his fund Ascot Partners, and its auditor of “misrepresentations and other wrongdoing which facilitated a massive Ponzi scheme’’ and caused the congregation to lose a substantial portion of its savings, according to a complaint filed in Superior Court in Massachusetts.

The financial loss is a significant blow to the small but prominent Hasidic congregation, which is grieving the death of the rebbe, Levi Horowitz, who died in Israel last Saturday after a long illness. The congregation is one of a number of Orthodox organizations, including Yeshiva University in New York and the Maimonides School in Brookline, that have lost money by investing with Merkin, who seems to have functioned as Madoff’s outreach to the Orthodox community.

The WSJ also has a piece on how Bernie is doing in prison. He’s adjusting, but it is slow, it seems:

Inmate No. 61727-054 shares an unlocked cell at the medium-security prison at Butner Federal Correctional Complex with a younger man named Frank. He wears khaki prison garb and has been spotted walking on an outdoor track. He plays bocce, chess and checkers. He scrubs pots and pans in the prison kitchen.

 

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