The Sob Stories of Madoff’s Wealthy Victims
Thursday, December 18, 2008 at 10:40 am
Speaking of Bernard Madoff — and who isn’t, these days? — the inevitable next chapter of this saga is the first-person tales of woe from his wealthy victims. The Daily Beast steps right up with a piece by Alexandra Penney, a New York artist, and former editor of Self magazine, which seems somehow fitting.
Did I say piece? Actually, the Daily Beast calls it a “wrenching saga” of how Penney lost her fortune.
Here’s Penney, describing the way she pondered her future, after learning she’d lost everything:
I began to think about my options: I’d have to sell the cottage in West Palm Beach immediately. I’d need to lay off Yolanda. I could cancel the newspaper subscriptions and read everything online. I only needed a cell phone. I’d have to stop taking taxis. And who could highlight my hair for almost no money? And how hard was it to give yourself a really good pedicure?
Then there is my jewelry. I’ve always collected nice watches and pearls. In the back of my mind I’d think, “Buy good stuff because if you’re ever a bag lady, you can sell it.” It might have been a rationalization then—but here I am now: The nightmare may be coming true.
Look, no one deserves to be ripped off, and everyone has sympathy for those in shock from losing their life savings. But Penney also talks in this piece about how she got involved with Madoff to begin with – and part of this story really should be about the networking among the wealthy and well-connected to get in on a piece of the Madoff returns. They didn’t succumb to a cold call from a broker. Madoff’s funds were an accessory available to only the selected few, as exclusive as a Birkin bag.
Again, from Penney:
I suddenly had a lot of money. I was in my late 40s, and I felt that I was just too old to have it in a plain old bank account. But I was a creative person, not a savvy investor, so I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in. I’ve always had good luck, and I thought it was another stroke of good fortune to be invested with the legendary Bernard Madoff.
Every month I got detailed statements, and my money looked to be growing around 9 to 11 percent. It didn’t seem greedy because I knew people other people who were making 15 or 20 percent. I thought, “This is just a very smart investor.”
If anything comes out of this economic crisis, it will be that people with financial degrees from fancy schools often aren’t really all that smart, are they?
Anyway, back to Penney. She’s got more problems ahead than losing her Florida seaside cottage. The part that stuck with me is her freshly ironed white shirts. She’ll no longer be able to pay Yolanda, her domestic, to take care of that task. From Penney:
I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.
How am I going to iron those shirts so I can still feel like a poor civilized person? Even the no iron ones need touching up.
Yolanda makes my life work. She comes in three mornings a week, whirlwinds around, and voila! The shirts are ironed, the sheets are changed, the floors are vacuumed. She’s worked with me for seven years and is a big part of my life. She needs money. She sends it to her family in Colombia. I have more than affection for Yolanda, I love her as part of my family.
On Friday, I tell her I have had a disastrous thing happen to me, but I don’t have the guts to tell her I cannot keep her with me any longer. I’ll wait till Wednesday.
I think I can help Penney here. Everyone I know gets those no-iron white shirts from Target. Then you don’t have to pay someone to iron them. You can even switch to t-shirts and those always go one sale there! Besides, Yolanda, it seems, has bigger problems on her plate than a lack of crisp, white shirts. I’m glad Penney at least acknowledges that.
But then she moves on. She’s not going to spend her golden years, it seems, dividing her time between her New York artist’s pad and the Florida cottage. She has “terrifying thoughts” about ending up in what she calls a state-run old people’s home, with “slow-eyed” attendants who drug you and strap you to your wheelchair.
I believe the proper term is “nursing home,” and millions of people who didn’t benefit from fraudulent returns end up being cared for in them. It’s sad, and it’s hard on their families, but often there’s no other choice. Some nursing homes are run well, and abuses occur at others, and in most cases there’s not enough money from the state, the federal government and the private sector to make them better.
But wasn’t this woman an editor at a national magazine? Did she ever think, back then, about applying her journalistic clout to afflicting the comfortable and comforting the afflicted? I don’t remember any nursing home exposes at Self magazine, although I’m sure I could have found tips on finding an eyeliner that didn’t run and losing those last five holiday pounds.
Maybe I’m being unfair. Penney noted that she was a divorced, single mother in the 1970s, and she worked lousy jobs to claw her way back into money and prestige. Good for her. Too bad those heady returns from the Madoff years, and her exclusive membership in the Madoff fraternity, seems to have clouded those memories, leaving her just like everyone else she knows. Another wealthy sucker.
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